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