VietNamNet Bridge – In 2010 alone, eight auditing firms merged into four. This comes as a surprise as mergers of auditing firms are not easy because of specificity of their operations and the numerous legal requirements. What was behind the M&As?
Merging because of … auditors
According to the Vietnam Association of Certified Public Accountants VACPA, TDK Auditing and Software Services Company (TDK) has merged with Thang Long AC, which has led to the establishment of Thang Long – TDK Company. The two firms had the headquarters in Hanoi and HCM City, but after the mergence, TDK has become a branch of Thang Long – TDK.
The second case was the mergence of the First Auditing and Consulting Company (FAC) and DPA Consultancy (DPA), which has led to the establishment of FAC Auditing Company. Other cases included the merge of Sao Viet (SV) and Quang Minh (QMC), VAAC and SUP to become Viet Anh Auditing Company. After the deal, Viet Anh became eligible to list its shares on the bourse and it has got the permission from the State Securities Commission to join the stock market.
Analysts believe that increasing the capital is not the main reason the mergence of auditing firms . For many years, their biggest headache I has been the lack of certified accountants.
This explains of the reshuffling of auditors at the largest companies in 2010. Four auditors of ASNAF left the company for CPA Hanoi. auditing has now become a “hot” career, as the demand for certified auditors is high,
What can the M&As bring?
Ask to comment on the recent mergence of auditing firms, Bui Van Mai, Secretary General of VACPA said that the firms needed increase their competitiveness and expand their business, both to improve the service quality. Moreover, some auditing companies need to improve their capability to get the license to provide services to listed companies. Under the current regulations, an auditing firm needs to have at least seven certified accountants.
Nevertheless, some analysts have pointed out that mergence of auditing firms is just the “change in the form”. The firms decided to merge just because this gives them the right to provide profitable services. In this case, the mergence does not bring any changes in the operation of the companies.
For example, the mergence of the two firms which had the headquarters in Hanoi and HCM City just helped increase the operation scale, thus allowing them to provide auditing services to big economic groups and foreign invested projects. In fact, the two companies are still operating independently, and each of them still looks for clients and pays the staff separately.
The Director of a company said it was easy to carry out this kind of merging, but it was also easy for them to split, if their interests conflict.
The current laws stipulate that an auditing firm must have at least three certified accountants, which has forced many auditing firms. However, the new? Bill on Independent Auditing requires that an auditing firm must have at least five certified accounts. Therefore, analysts have warned that auditing firms will continue to merge. Under the plan, the bill will be ratified in 2011 and take effect as of January 1, 2012.
According to VACPA, 15 new auditing firms were established in 2010, raising the total number of auditing firms to 155, of which only 45 companies are allowed to audit listed companies and securities trading institutions as of 2011.
Source: Dau tu