Auditing firms merging to become stronger

Tuesday, April 22, 2008
To date, at least eight auditing firms have merged into each other to form four bigger firms, according to the Ministry of Finance.
Bui Van Mai, Director of the Auditing and Accounting Policy Department under the Ministry of Finance, said that there is a growing tendency of small auditing firms to merge in order to become stronger.

Mai said that under the newly promulgated Decision No 89, auditing firms must have at least seven practicing auditors, who have at least two years of experience, to be eligible to provide auditing services on the stock market. The firms must have the chartered capital or stockholder equity of VND2bil at least for domesticly owned firms, and $300,000 at least for foreign invested firms. Besides, the firms must have the annual minimum number of clients of 30 in the last two years.

To date, 141 auditing companies have been licensed, of which only 26 companies have been accepted to provide auditing services on the stock market (auditing public companies, securities companies and investment fund management companies).

More and more auditing firms have been established recently, but only few staff members have been recognized as certified auditors.

In 2005, only 200 auditors were certified, while the figure was 250 in 2006, and dropped to 30 in 2007.

Mai said that auditing firms are seriously lacking qualified staffs due to the tardiness in granting certificates to auditors. Besides, a lot of auditors have shifted to work for banks and securities companies, which has also worsened the situation.

Mai said that auditing firms have no other choice than merging into each other to become bigger which allows them to meet the newly promulgated regulations. He added that more and more merger cases will be seen in the time to come. (DTCK)