CONCERN AS HONG KONG-LISTED FIRMS MAY MISS MARCH 31 REPORTING DEADLINE

The tidal wave of Covid-19 infections sweeping Hong Kong and a possible citywide lockdown in the coming weeks mean listed companies could miss the important March 31 deadline for reporting their financial results, accountants have warned.

Accounting industry bodies have held meetings with financial regulators to air their concerns that a hit to their staffing levels might make it impossible to complete the auditing process in time.

Failing to meet the deadline could result in the suspension of a company’s shares, though a relief measure introduced two years ago may provide some flexibility.

Some firms have seen about 10 per cent of their auditors struck down by the coronavirus or quarantined in the past two weeks, according to executives of several accounting firms, who did not wish to be identified.

“The increasing number of staff who got infected has resulted in a disruption as the infected staff need to take sick leave and cannot go to the offices of the clients to do the auditing work.

This is supposed to be the busiest time for auditors,” said Clement Chan, chairman of the Hong Kong Association of Registered Public Interested Entity Auditors, the industry body that represents the auditors of all listed companies in the city.

Chan said the association had already held meetings with Hong Kong Exchanges and Clearing (HKEX), which runs the stock exchange, and the Securities and Futures Commission to express its concerns.

“The current situation is more serious than the past two years. The problem then was that Hong Kong staff could not freely travel to the mainland to do the auditing work [for mainland companies listed here], but we still had people to carry out their duties,” he said.

“This year, there is a lack of staff to do the work because of the high number of infections and the fact that many people have emigrated to other countries.”

Chan said HKEX had rejected the idea of a blanket delay of the deadline but approval for companies to issue unaudited accounts would be granted on a case-by-case basis.