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WEDNESDAY, JUNE 27, 1990
"THIS MAY RESULT IN THE AUDITORS NO LONGER HAVING CONFIDENCE IN EITHER THE INTEGRITY OR THE COMPETENCE OF THE DIRECTORS AND SENIOR MANAGEMENT, AND LEAD THEM TO THE VIEW THAT DIRECT REPORTING TO THE COMMISSIONER WOULD BE IN THE BEST INTERESTS OF DEPOSITORS, HE SAID.
++
MR NENDICK SAID THE HONG KONG SOCIETY OF ACCOUNTANTS ALSO AGREED THAT DIRECT REPORTING SHOULD BE AN EXCEPTIONAL OCCURRENCE.
ITS CURRENT GUIDELINE ON TRIPARTITE MEETINGS ALREADY SET OUT THE VERY LIMITED CIRCUMSTANCES IN WHICH AN AUDITOR SHOULD FEEL COMPELLED TO REPORT DIRECTLY TO THE COMMISSIONER.
"WE UNDERSTAND THAT THE NEW GUIDELINE, FOLLOWING ON THE COMMISS LONER'S STATEMENT, WILL BE ALONG SIMILAR LINES," HE SAID.
MR NENDICK SAID BOTH THE HONG KONG ASSOCIATION OF BANKS AND THE HONG KONG DEPOSIT-TAKING COMPANIES ASSOCIATION HAD MADE SUBMISSIONS TO THE LEGCO AD HOC GROUP EXPRESSING CONCERN PROVISION IN CLAUSE 5.
ABOUT THE
"WHILST SUPPORTING THE PRINCIPLE OF DIRECT COMMUNICATION BETWEEN AUDITORS OF AUTHORISED INSTITUTIONS AND THE COMMISSIONER OF BANKING, THE TWO ASSOCIATIONS FELT THAT AUDITORS SHOULD ONLY DO SO IN EXCEPTIONAL CIRCUMSTANCES SO AS NOT TO UNDERMINE THE FRANK AND CONFIDENTIAL RELATIONSHIP BETWEEN AUDITORS AND MANAGEMENT.
"THEY SUGGESTED THAT SUCH CIRCUMSTANCES SHOULD BE SPELT OUT
LEGISLATION.
IN
"ALTERNATIVELY, THE GOVERNMENT SHOULD, AS IN THE UNITED KINGDOM, HAVE THE 'RESERVE POWER' TO MAKE REGULATIONS SPECIFYING THE PARTICULAR CIRCUMSTANCES FOR SUCH DIALOGUES, IF NO SATISFACTORY PROFESSIONAL GUIDELINE WERE TO BE ISSUED, HE SAID.
יו
THE ASSOCIATIONS HAD ALSO STRESSED THE NEED FOR THE HONG KONG SOCIETY OF ACCOUNTANTS TO CONSULT INTERESTED PARTIES BEFORE FINALISING ITS GUIDELINE RELATING TO THE NEW SECTION 61.
MR NENDICK SAID THE HONG KONG SOCIETY OF ACCOUNTANTS HAD UNDERTAKEN TO CONSULT THE INTERESTED PARTIES, INCLUDING THE HONG KONG ASSOCIATION OF BANKS AND THE DEPOSIT-TAKING COMPANIES ASSOCIATION,
ON THE NEW GUIDELINE AS SOON AS POSSIBLE AFTER ENACTMENT OF THE BILL.
FOR
"IN THE EVENT, WE SER NO NEED TO SPECIFY THE CIRCUMSTANCES DIRECT ('OMMUNICATION IN LEGISLATION, OR TO PROVIDE FOR THE 'RESERVE POWER' AS SUGGESTED. I AM GLAD THAT THIS VIEW IS SHARED BY THE AD HOC GROUP AND THAT NO AMENDMENT IS THEREFORE REQUIRED, HE SAID.
HE ADDED THAT HE WOULD BE MOVING DURING THE COMMITTEE FEW TECHNICAL AMENDMENTS TO THE BILL.
STAGE A
THESE AMENDMENTS HAD BEEN EXAMINED BY THE AD HOC GROUP WHO LENT THEIR SUPPORT, HE SAID.
HAD
/EARLIER, MR
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