The longest running case in the history of the Hong Kong Institute of Certified Public Accountants has been resolved.
Anthony Wu Ting Yuk, a high profile CPA in Hong Kong, has been removed from Hong Kong's register of certified public accountants for a period of just two years, and ordered to pay the HKICPA a penalty of HK$250,000 (US$32,255).
Wu, Chairman of Ernst & Young from 2000 to 2005, was also ordered to pay the costs of the disciplinary and investigation proceedings of HK$2 million, along with EY and Catherine Yen, who was involved in the audit of the now defunct New China Hong Kong Group (NCHK), which collapsed in 1999, owing creditors some HK$1.5 billion.
Yen has also been reprimanded and ordered to pay penalties (HK$100,000), but has not been removed from Hong Kong's register of CPAs.
It took almost a year for the HKICPA's disciplinary committee to administer any sanctions following a decision made in December 2013 about the 10-year-old case.
Wu was managing partner of EY's China business in 1996, before becoming deputy chairman of the firm in 1998 and chairman in 2000, a position he held until the end of 2005.
Prior to its collapse Wu was financial adviser to NCHK and EY was auditor to NCHK. He was found guilty of professional misconduct, as a result of his failure to observe, maintain or otherwise apply the independence requirements of the institute.
Under the institute's guidelines, Wu is not permitted to participate in the management of or otherwise be involved with the company and its subsidiaries while also a senior partner of EY who acted as auditors of the company in respect of the financial years ended 31 December 1995 to 31 December 1997.
Wu is a high profile CPA in Hong Kong. He was awarded the Gold Bauhinia Star (Hong Kong’s highest honor) and served as Chairman of the Hospital Board and the Chamber of Commerce.
He also served on several high profile government and corporate boards, and the China People’s Political Consultative Committee.
In an an interview with the South China Morning Post, Wu claimed that the guidelines, measures and practices today are quite different from those some 20 years ago and to use today's standard to judge those in the early 1990s is unreasonable and inappropriate.
In an opinion article posted on CFO Innovation Asia last month, Dr. Paul Gillis, a CPA and Professor of Practice at Peking University’s Guanghua School of Management, wrote that Hong Kong practices self-regulation in accountancy.
"After Enron, the rest of the world pretty much concluded self-regulation does not work," Gillis wrote. "I offer as evidence the case of former EY senior partner Anthony Wu. He was found to have violated auditor independence rules...The violations are serious and Wu should receive the maximum penalty."
Gillis concluded that Hong Kong needs to set up an independent audit regulator with sufficient funding to clean up the profession.