Yes - Section 412 of the new Companies Ordinance empowers auditors to require information and explanation for the performance of their duties from a wider range of persons, including persons holding or accountable for any accounting records of the company or a Hong Kong incorporated subsidiary of the company. It also empowers auditors to require the company to obtain such information and explanation from persons holding or accountable for the accounting records of a non-Hong Kong incorporated subsidiary.
Section 410 provides that in the absence of malice, an auditor of a company is not liable for defamation in respect of any statement made by the auditor in the course of performing duties as auditor of the company. "Performing duties as auditor of a company" includes making a statement of circumstances or a cessation statement upon the resignation or removal of the auditor or when the auditor is not reappointed. Under section 425(1), the auditor's duty to make a statement of circumstances connected with the cessation of office is extended to the situations where the auditor is removed from office and where a retiring auditor is not reappointed.
The persons who will be required to provide information or explanation to auditors pursuant to section 412 of the new Companies Ordinance are:
- an officer of the company;
- a Hong Kong subsidiary of the company;
- an officer or auditor of such a subsidiary;
- a person holding or accountable for any of the accounting records of the company or such a subsidiary; or
- any of the above persons or subsidiary at the time to which the information or explanation relates.
The auditor of a holding company may also require the company to obtain information or explanation from its non-Hong Kong subsidiary, the officers and auditor of such a subsidiary and persons holding or accountable for any of the accounting records of such a subsidiary.
A person who fails to provide the required information or explanation commits an offence and is liable to a fine not exceeding $25,000 and, in the case of a continuing offence, a daily fine not exceeding $700. It is a defence to establish that it was not reasonably practicable for the person to provide the information or explanation.
If a company fails to take reasonable steps to obtain the required information or explanation in respect of its non-Hong Kong subsidiary, the company and every responsible person of the company commits an offence and each is liable to a fine not exceeding $25,000 and, in the case of a continuing offence, a daily fine not exceeding $700. It is a defence for the holding company's failure to obtain the information or explanation in respect of its non-Hong Kong subsidiary if it would be an offence under the law of the relevant jurisdiction for the subsidiary to provide the information or explanation.
