The plan and proposal by the Securities Commission (SC) to introduce new rules that will make it mandatory for companies to choose from a select group of accounting firms when they submit rescue plans and initial public offerings (IPOs) would be a positive move to instill confidence lost from the recent accounting irregularities.

However the concerns expressed by certain accountants should not be ignored in totality. The worries of the possibility that the move may create a cartel that could push aside smaller firms make sense from the business perspective. But to the minority shareholder, the concern is not too much on the monopoly for the lucrative business by certain accounting firms only.

The main concern would be how the public can be assured that this selected group of accounting firms are really professional, transparent and above all trustable? Could they be hauled into court’s yard if they’re found to be negligent in their tasks? Who would audit their work in return? The fact that no accounting firms have been charged in court despite numerous accounting irregularities and book-cooking cases goes to show that the accounting firms are almost immune to any investigation, not to mention charges.

What we had heard so far was the CEO, COO, CFO or directors resigned and in some handful of cases, charged (pending hearing which might take ages). The very top chief officers in the influential and conglomerates are almost un-touchable. But if these chiefs can be charged, why not the accounting firms which had acknowledged and verified the accounting figures of the companies?

If there’s no third agency powered to audit this selected group of elite accountants, the whole proposal will be back to the square one as nothing can stop these selected accounting firms from closing one eye either.

Other Articles That May Interest You …

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• Malaysia’s ENRON – Bravo to SC but What About Others?
• Stock Market Criminals – NATO, No-Action-Talk-Only
• Listed Co Not Trustable – Book-Cooking from Day-1
• Widespread Accounting Crisis – Government Equally Responsible

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August 16th, 2007 by financetwitter

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