After accounting scandals at Enron Corp, WorldCom Inc and other US companies, the government plans to force companies to rotate auditors every five years. It may also exempt as many as 80,000 smaller companies from audit requirements, part of a bid to reduce small business costs.
For big accounting firms like PricewaterhouseCoopers LLP, the changes threaten to upset industry rankings and client relationships. Smaller firms, such as the 100-strong TeoFoongWongLCLoong, will be forced to compete for a smaller pool of clients or move into the larger firms' turf.
According to Foong Daw Ching, one of TeoFoongWongLCLoong's founding partners, they have to downsize by a third as the industry is not that sophisticated here, unlike in Australia or Britain where businesses might require services other than audits.
The Monetary Authority of Singapore has given the country's three banks until 2006 to start using new firms and says it may extend the policy of rotating auditors to all listed companies. DBS Group Holdings Ltd, Singapore's biggest bank, was first to move, saying it will switch to Ernst & Young next year, after 34 years using PricewaterhouseCoopers.
(Source : http://biz.thestar.com.my)