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Ernst and Young forced to provide accounts

Ernst and Young has been ordered by the Hong Kong Securities and Futures Commission (SFC) to provide accounts from when it operated as Standard Water Limited’s auditor and accountant.

The SFC ordered the accounts after it bought proceedings against the firm, now known as EY after it rebranded two years ago. This was due to a failure in handing over the records in an inquiry into Standard Water’s proposed listing.

EY said then that it didn’t have the documents and that laws in the People’s Republic of China (PRC) prevented it from being able to produce them. However, this has now been overturned by the court, which said that EY intentionally restricted the information being provided to the SFC.

Ashley Alder, SFC Chief Executive, said:

“This case is primarily about the obligations of an accounting firm in Hong Kong to comply with requirements under Hong Kong law. The case is not about PRC law.”

EY will further be forced to pay any costs on the behalf of SFC.

The Commission recently gave a HK$1.6m (£123,000) fine to Deustche Bank for internal failings and regulatory breaches. It was found that the German bank had failed in implementing sufficient internal controls, so that positions it holds in any listed firms could be adequately monitored and made known to the Stock Exchange of Hong Kong.

This illustrates the importance of an accountant in the Wirral, Chester, and up and down the country, keeping accurate and up-to-date records of any financial activities or their clients. Otherwise, their clients may find that it comes back to haunt them.

Posted by Mark
June 5, 2014

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