Ethics of public accountants in Hong Kong

Pao Yue-kong Library Electronic Theses Database

Ethics of public accountants in Hong Kong


Author: Kam, Wing-hoi Gloria
Title: Ethics of public accountants in Hong Kong
Degree: M.B.A.
Year: 1994
Subject: Accountants -- Professional ethics -- China -- Hong Kong
Hong Kong Polytechnic -- Dissertations
Department: Dept. of Management
Pages: vii, 76 leaves ; 30 cm
Language: English
InnoPac Record:
Abstract: Recently, a lot of complaints concerning the increasing incidents of substandard audits have come from the Hong Kong Stock Exchange, Banking Commission, Inland Revenue Department, Companies Registry, Official Receiver's office and the Insurance Authority. The accounting profession has therefore, to face with the question of how to best monitor the ethical standards of its members. However, conflicts could exist between the profession's desire to self-regulate and its accountability to the public at large. The Treadway Commission has identified three major groups in addition to the top management for public companies as critical in fostering a climate of ethical behaviour that would reduce fraudulent financial statement reporting:(1) independent public accountants, (2) regulatory and rule-setting agencies, and (3) the educational system (Jeffrey R. Cohen and Laurie W. Pant, 1991). This study, apart from obtaining the opinions of public accountants, students and audit clients on ethical conduct of public accountants, also attempts to investigate their perceptions about the relative effectiveness of these three mechanisms in promoting ethical standards in the accounting profession. Of the 129 persons responded, 39 are public accountants (a 39% response rate), 51 are students of the Hong Kong Polytechnic (a 85% response rate) and 39 are audit clients (a 98% response rate). Half of the respondents believe that ethical standards of public accountants have declined. The results also indicate that the use of peer review is perceived as the most effective mechanism, while government regulation is ranked least effective. Several implications may also be noted from the results. The survey highlighted that there is a wide expectation gap regarding the rolc of auditors between public accountants and those who make use of accounting service. Therefore, in order to close the gap, the Hong Kong Society of Accountants should put more efforts in promoting the image of the public accountants and educate the public regarding the role of the public accountants. Although peer review is perceived by the respondents as the most effective mechanism, in the long run it is better to educate the public accountants and would-be accountants rather than using the detective means to promote the awarencess of the public accountants. This idea is confirmed by the fact that more than 76% of the respondents interpret ethics as a moral and philosophical framework for guiding beliefs and they perceived highly on education as an effective mechanism in establish ethical standards.

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