|Auditing is not a dull profession - there are as many
varieties of audit as there are new ways of doing business.
In particular, the audit of the public sector is fast
expanding too, with audits being conducted on statutory
bodies; non-government organisations; trading funds; estate
management; and even one-off fund-raising events. As long
as accountability is demanded, auditors are expected to
give an independent, impartial and professional opinion.
Auditors are also constantly expected to adapt and develop
their professional skills in response to new predicaments
and situations. For example, auditors have to be able
to tailor audit reports to different organisations, e.g.
banks, property companies, insurance firms and schools,
etc. Furthermore, different circumstances will call for
special reports, e.g. in times of mergers and acquisitions;
share listings; and liquidations and receiverships. In
these cases, auditors have to ensure that special reports
meet current legal specifications.
As the size of many business deals in increasing, more
and more disputes are now being settled in court or through
arbitration. This has led to accountants becoming essential
expert witnesses, providing the skills to analyse and
present financial data in the most objective and persuasive
When the world is faced with Year 2000 problems, the Government
and regulators want a Y2K compliance audit. Fraud investigators
looking for clues now seek help from a forensic auditor.
When the community sets its goals to improve the environment,
it asks for an environment audit, particularly on large
government buildings. There is no end to these demands
and accountants must be flexible and use their skills
in different ways.
During these times of turmoil, most organisations are
no doubt looking hard at managing risks, and looking at
asset values as the ultimate line of defence. Bankers
and creditors will be keeping a hawk's eye on lenders'
financial statements. Government regulators will also
be vigilant to prevent budding problems from developing
into major disasters.
Furthermore, given the constant threat of layoffs and
wage freezes, the growing influence of trade unionism
can be felt as employees become more interested in their
company's financial statements, particularly in regard
to collective bargaining.
However, while as this means that financial statements
are becoming more useful, value-for-money audits in the
private sector still seem less developed than those conducted
in the public sector.
During the present hard times, organisations should leave
no corner unturned to economise and make sure that limited
resources are spent wisely in the most efficient and effective
way. It is here that accountants can enhance competitiveness.
With this in mind, there are several ways in which the
Public Accounts Committee, well supported by the Audit
Commission, has helped the Government make better use
of public resources.
On the revenue side, we have constantly reminded the Government
about the loss of commercial opportunities, e.g. the use
of government property to generate rental income; weekend
car-parking; surplus staff quarters; and shop and canteen
We have also strongly urged certain government departments
to release valuable sites for early redevelopment, e.g.
central market which is still held by the Urban Service
Department, and the under-developed site of the General
Post Office in Central. We have also prompted the Government
to enforce its legal rights (e.g. in cases of industrial
safety, and the surcharge for late tax payments) so as
to impose real deterrents and to protect against possible
On the expenditure side, examples are abundant. One of
the more high-profile recurrent problems includes the
issue of three reports urging the Government to recover
the HK$1.1 billion advances to the UNHCR for the Vietnamese
boat people. Another problem is the frequent ineffective
use of expensive consultants which gives the impression
that government officials are trying to avoid responsibility.
We have also seen unfair tenders awarded with terms so
restricted that only a very few suppliers were able to
meet the stipulated requirements, e.g. the tender for
the computer registration system of the Lands Department
and grade A government vehicles.
Further, we are dealing with the slack control and monitoring
of outdoor staff, of which there is a substantial surplus
capacity, e.g. external staff of both the Water Services
Department and the Regional Urban Services Department.
Our efforts in the Public Accounts Committee seek more
than public apologies from senior Government officials.
They aim to get to the heart of the issue - to save millions
of dollars in public funds. Now it is perhaps good time
too for our larger private sector organisations to make
their internal and external auditors work to find and
save millions of other wasted dollars.
Eric Li is the Accountancy Functional Constituency Representative
on the LegCo. His web site can be found at http://www.ericli.org