SCwatch


IS SOMEONE WHO IS EMPLOYED BY A ‘BIG 8’ ACCOUNTING FIRM ‘SERIOUSLY CONFLICTED’ …….. IF HIS FATHER IS LEADER OF AN OPPOSITION POLITICAL PARTY?

I was quite bemused by the story told by Penang Chief Minister, Lim Guan Eng to an audience an an event organised by a professional accounting body.

He recalled having, after graduating, so much difficulty getting employment with a Big 8 accounting firm. (That was in the olden days …….. now the remaining big firms are known as the ‘Final Four’!).

And when he did procure a job with a Big 8 accounting firm, he was ‘sacked’ shortly thereafter!

And the reason?

The accounting firm found out that his father was Lim Kit Siang, then the secretary-general of the Democratic Action Party (DAP), the main opposition party in Malaysia then. Guan Eng is the current secretary-general.

“What a load of shite!” may be most people’s reaction …… but that’s how the system was and still is!

I recall the time of the Bumiputra Malaysia Finance scandal in the mid 1980s whereby this Hongkong subsidiary of Bank Bumiputra Malaysia Berhad had loaned billions of ringgit under questionable circumstances.

When a Panel of Enquiry was set up to look into the scandal, its members were people of renowned stature i.e. Ahmad Nordin (Auditor General then), Ramli Ibrahim (partner of KPMG) and Chooi Mun Sou (lawyer).

But when the report was finalised, only two of the three panel members were prepared to sign it.

And who was the third who refused to sign?

Ramli Ibrahim of KPMG.

There was no official reason given but I do recall speculation that the firm had several big time clients e.g. Petronas ……. and therefore did not want to ruffle feathers, so to speak.

Wow, if that was how these Big 8 accounting firms behave, it is no wonder that we are seeing the results of such ‘undesirable’ behaviour of companies under their watch!

The tide is out ……. and it doesn’t appear to be able to ‘come in’ again to cover the rot!

It is also no wonder that the setting up of the Audit Oversight Board became a necessity ….. to audit the work done by the auditors!

It has come to a stage that the economic system cannot afford another collapse of an accounting firm like Arthur Andersen (due to Enron debacle) as the remaining large, medium and small accounting firms are unable to absorb the work-load should another large accounting firm collapse.  

Now do you know why the remaining big firms are called the ‘Final Four’?

Unfortunately, this symptom is not confined to accounting firms alone …… it is actually endemic in that legal firms, valuation firms, financial advisers etc have had their standards compromised due to this “wanting to please the powers to be” syndome.

Maybe the prescription of a “Change of Administration” in the political landscape appears most appealing!

Click HERE for Lim Guan Eng’s story about being sacked by a Big 8 accounting firm. It also appeared in Malaysiakini (if you are a subscriber).

Would anyone like to disclose which accounting firm sacked Guan Eng?


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