Legislative Council meeting Member’s Bill 2nd Reading – Professional Accountants (Amendment) Bill 2018

MR CHAN CHUN-YING (in Cantonese):

President, first, I would like to state that I am a member of the Bills Committee on Professional Accountants (Amendment) Bill 2018 (“the Bills Committee”) and I have participated in all of the four meetings, including the public hearing.

At the Bills Committee, I have expressed my support of the original purpose of the Professional Accountants (Amendment) Bill 2018 (“the Bill”). The original purpose of the Bill is to prevent criminals from falsely identifying themselves as professional accountants or auditors and inducing members of the public to patronize their services so as to commit fraudulent acts. I believe many people have seen the Announcement of Public Interest produced by the Financial Services and the Treasury Bureau which alerts the public that criminals may falsely identify themselves as staff members of banks, certified public accountants and financial consultants, etc. in order to commit fraudulent acts.

The fraudsters mainly take advantage of the public’s trust in the above mentioned occupations, and this kind of fraud has actually become very rampant. The Government must continue to warn the people to prevent the continuous growth of the crime. Thus, I agree with the original intention and purpose of the Bill. I have made this point during discussions on the Bill at meetings of the Panel on Financial Affairs and the Bills Committee.

At the same time, we definitely do not wish to see honest people being inadvertently caught after the commencement of the Bill. For instance, will small companies which mainly provide bookkeeping and simple accounting services and other persons who really provide accounting services be affected when promoting their services to others? Thus, at the meeting of the Bills Committee, I fully supported holding a public hearing to directly receive the views of various stakeholders, so as to ensure that the draft provisions would not, after they come into effect, affect the room of survival of the companies and persons concerned.

President, during the public hearing, there were heated discussions on whether it was reasonable to prohibit the use of the description “professional accounting”, consequently leading to a series of academic discussions. How should the term “professional” be defined? In this context, it would be difficult to determine whether “professional” is an adjective or a noun. Besides, different people may have different interpretations of the term. Will the commencement of the Bill give rise to any unforeseen outcomes? The views of Mr James TO,being a member of the Bills Committee, have a certain degree of representativeness. He is worried that the Bill will have the effect of monopolizing the use of the description “professional accounting”, and judging from the number of cases mentioned by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), he thinks that there is not enough evidence to indicate that the current situation has reached an unacceptable level.

Subsequently, Mr Kenneth LEUNG, mover of the Bill, wrote to the Bills Committee to explain why he would not amend the Bill. He said that the general public, particularly overseas investors as pointed out by Mr Charles Peter MOK, Chairman of the Bills Committee, would find it hard to understand the qualifications of individuals or companies providing accounting services and the regulations to which they were subject.

President, regarding this point of dispute, I have sought the views of other Members, my friends in the accounting field and other professionals. There are both supporting and opposing views regarding the prohibition of the use of the description “professional accounting”, particularly in view of the lack of similar precedents in many other professions. Those supporting the Bill think that in order to prevent criminals from falsely identifying themselves, amending the laws will actually help to provide a better basis for law enforcement. Although companies or individuals providing bookkeeping and accounting services will be subject to certain restrictions in using the description “professional accounting” in the future, they can still use other descriptions such as “seasoned accounting”, “accounting expert” and “professional bookkeeping”, etc. which will achieve the same purpose in describing the expertise of their work and the services they provide.

On the other hand, those opposing the Bill pointed out that during the discussions of the Bills Committee, it was proposed that members of HKICPA should be required to display their practising certificates at a prominent position of their offices to help the public or targets of fraudsters to easily identify the authenticity of the claimed qualifications. If the public have doubts about the identity of an individual, enquiries can be made with HKICPA. In fact, Mr Charles Peter MOK mentioned earlier that the public could make enquiries through the website of HKICPA. However, I think simpler and quicker ways of identification should be provided to the public. If the problem of false identification can be expeditiously resolved, it would not be necessary to solve the many problems arising from the legislative amendments.

Although the above mentioned proposal was uncontentious, HKICPA subsequently said that it had to conduct detailed study. It has been a long while since the Bills Committee completed its work, I do not know the progress of the review by HKICPA, but I hope that it will complete its study as soon as possible and propose some necessary policies. Regardless of the voting results on the Bill today, HKICPA should provide another way of assisting the public to ascertain the identities of its members.

President, during the deliberation of the Bill, we asked HKICPA to affirm that it would not arbitrarily use the power conferred by the Bill to report to the Police against accounting practitioners who used improper descriptions without any intention to mislead others. This suggestion has been endorsed by HKICPA. Regarding the specific wordings of the Bill, I urged the mover of the Bill, Mr Kenneth LEUNG, to consider and review the existing Bill and clarified that the use of an improper description would only constitute a crime if there was an intention to mislead others. The existing Bill has adopted descriptions of positive logic, while I have proposed to use descriptions of negative logic so as to remove doubts of the public and avoid affecting certified public accountants with overseas registration. This approach will be consistent with the original intention of the Bill for the accounting sector.

Upon review, Mr Kenneth LEUNG considers that the wording of the Bill is clear enough. After the passage of the Bill, should any dispute in law enforcement arise, I think it will be necessary to immediately fine-tune the legislation so that it can more clearly reflect the original legislative intention.

President, personally, I am most worried that even after the passage of the Bill, instances of “crying up wine but selling vinegar” may not be eradicated. Criminals who pose as certified public accountants to mislead the public will simply not mind committing an additional crime under the Bill. In respect of preventing criminals from continuing to falsely identify themselves with occupations trusted by the public, such as certified public accountants, auditors, or even staff members of banks and financial consultants, etc., the Bill can only solve a small part of the problems. It is essential for the relevant government departments to step up law enforcement and strengthen measures of publicity and public education, etc. in order to combat and eradicate this kind of fraudulent acts to protect the public.

President, I so submit.