power of love - Hong Kong Institute of Certified Public Accountants

From left: James Riley, Carlson Tong, Hans Hoogervorst, Clement Chan
and Jennifer Hughes (moderator from the Financial Times)
“Standardizing financial reporting standards
at the global level can help investors to
compare financial information across institutions
and across jurisdictions.”
The speeches were followed by a thoughtprovoking
panel discussion on the subject
of financial reporting in which Hoogervorst
and Chan joined Carlson Tong, chairman of
the Securities and Futures Commission and
an Institute past vice-president, and James
Riley, group finance director of Jardine
Matheson Holdings and an Institute fellow.
Financial reporting must benefit all stakeholders,
Tong told the panel. He said financial
statements had become more difficult
to decipher. “I’ve been an accountant for 37
years and now I have no idea which page to
turn to. We have to ask ourselves, what are
accounts for?”
Tong noted that global accounting stan-
dards were far more uniform than any other
comparable international regime, such
as the supervision of the world’s financial
institutions.
Riley echoed the IASB viewpoint, saying
he would prefer the U.S. to join IFRS,
but added that he was concerned that convergence
had meant the IASB had become
too accommodating of the American model.
“I’m worried that reaching a settlement with
the U.S. would mean ticking 10,000 boxes,”
he said. “The drift has been too much towards
a compliance requirement approach.”
Hoogervorst acknowledged that increasing
regulatory burdens were making auditors
more risk-averse, meaning that financial
statements were clogged with unnecessary
disclosures, hampering effective interpretations
of corporate results. “We are actively
engaging with auditors on how we can help
A PLUS
them use their judgment more,” he said.
The panel also discussed increasingly
complex auditors’ opinions. “As an auditor, I
would like to give a very simple audit opinion
based on the work that was done,” Chan
said. “However, [it is not possible] given the
different requirements that regulators impose,
whether in different parts of the world
or in different cases.”
Chan added that he would like to see
more communication between auditors and
their regulators.
The panel emphasized that the future of
financial reporting would involve accounts
that were more intelligible to the various
stakeholders, given the wider investment
community. “Financial statements are important
to anyone who entrusts their money
to someone else,” said Hoogervorst. “Our audience
is society at large.”
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