Facing potentially tougher legal obligations, the nation's accountants may raise their rates for certifying publicly-listed companies' financial reports.
"It will be reasonable for accountants to raise their audit fees in accordance with rising costs," said an official, who refused to be identified, at the Public Certified Accountants Association (
The possible rate increases come on the heels of a government move to strengthen corporate governance with revisions to the Certified Public Accountants Law (會計師法).
The Cabinet passed the regulations on July 14 and implementation is pending approval by the legislature.
Under the revisions, accountants will face tougher disciplinary action, including legal and civil penalties, if they fail to fulfill their professional duties in certifying or auditing financial reports.
Negligence
Four local accountants were punished in July by the Financial Supervisory Commission for negligence in certifying the now bankrupt Procomp Informatics Ltd's (
In accordance with Article 39 of the Securities and Exchange Law, Lee Cheng-ming (
The financial regulator's posture appears to put a heavier burden on accountants, who will have to take a more prudent attitude in reviewing listed companies' financial condition, including asset quality, cash flow and business performance.
Local accountants have since faced a dilemma of whether to raise their charges to meet higher standards in light of stiff price competition.
No consensus on rates
The official, however, denied a local media report that the association has reached a consensus to raise charges by between 10 percent and 30 percent.
"The increase, if there is one in the future, will be calculated on a case-by-case basis and imposed by individual accounting firms for extra work in certifying client companies' financial documents," he said.
The report said that four of the nation's major accounting companies, including DTT, KPMG, PriceWaterHouseCoopers (資誠) and Ernst & Young (致遠), have all decided to increase fees.
The firms denied the report yesterday.
Due to contracts signed in the previous year, DTT said that it currently absorbs the expenses for extra work hours. It may have to charge clients for increased costs next March when contracts are renewed, however.
"We won't raise fees for nothing," said a company employee, who refused to be identified, adding that "with stricter standards, the auditing process will be very complicated and costly."
DTT said that any future increase will match additional costs to the company for extra staff and working hours required to certify a client's financial documents.
PriceWaterHouseCoopers and Ernst & Young yesterday said they have no plans to raise service fees at this time.
KPMG was not available for comment.
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