Structural flaws in the accounting system must be addressed, an accounting professor said yesterday at a seminar in Taipei. He also urged accountants to exercise professional self-discipline to reduce frauds and strengthen corporate governance.
Although accountants are hired by companies to verify financial statements, these professionals should manifest their independence and competence to hold their clients accountable to the companies' current and future shareholders, said Ko Chen-en (
Ko said the defective accounting system can become an accomplice to corporate financial irregularities when company leaders intend to cover up wrongdoing. Ko is also director-general of the Corporate Governance Association Taiwan (中華公司治理協會).
"Because the party that pays money [to accountants] and the party that [the accountants] should be responsible to are different, these professionals face difficulty in maintaining their supervision quality when they're sometimes under pressure from higher-ups," he said.
Speaking at a crowded seminar held by Standard & Poor's Ratings Services, Ko said a better way would be for companies' auditing committees, composed of independent board members, to directly communicate with accountants.
Ko spoke to review the aftermath of Procomp Informatics Ltd's (
Nearly 10,000 of Procomp's more than 38,000 investors had been affected by the default, Vice Minister of Finance Gordon Chen (
Several Procomp investors demanded the government compensate them for their losses yesterday at a press conference organized by Democratic Progressive Party legislators Charles Chiang (江昭儀) and Chen Mao-nan (陳茂男).
Liang Hsi-tsung (
"We bought Procomp's corporate bond because we believed that the Securities and Futures Bureau conducted a detailed examination before allowing Procomp to raise more capital," Liang said.
Therefore, Liang and other affected investors said they would also demand compensation from the Securities and Futures Bureau and from the Taiwan Stock Exchange Corp for alleged negligence.
Yeh was detained on June 27, and four accountants were punished last week by the Financial Supervisory Commission for their negligence in certifying Procomp's financial documents.
"All these problems boil down to morality," Ko said.
To nip such fraud in the bud, Ko said, corporate governance should be stressed and become a reference indicator for the government to manage financial institutions and listed companies.
"The Procomp fraud is only a beginning, not an independent case," said Tony Tsai (
"I believe this case has sent shockwaves through and served as a warning for the investment trust sector," Tsai said. He said the sector requires further risk controls or it will risk rejection by investors.
(With additional reporting by Debby Wu)
STEEP DECLINE: Yesterday’s drop was the third-steepest in its history, the steepest being Monday’s drop in the wake of the tariff announcement on Wednesday last week Taiwanese stocks continued their heavy sell-off yesterday, as concerns over US tariffs and unwinding of leveraged bets weighed on the market. The benchmark TAIEX plunged 1,068.19 points, or 5.79 percent, to 17,391.76, notching the biggest drop among Asian peers as it hit a 15-month low. The decline came even after the government on late Tuesday authorized the NT$500 billion (US$15.2 billion) National Stabilization Fund (國安基金) to step in to buoy the market amid investors’ worries over tariffs imposed by US President Donald Trump. Yesterday’s decline was the third-steepest in its history, trailing only the declines of 2,065.87 points on Monday and
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
TARIFF CONCERNS: The chipmaker cited global uncertainty from US tariffs and a weakening economic outlook, but said its Singapore expansion remains on track Vanguard International Semiconductor Corp (世界先進), a foundry service provider specializing in producing power management and display driver chips, yesterday withdrew its full-year revenue projection of moderate growth for this year, as escalating US tariff tensions raised uncertainty and concern about a potential economic recession. The Hsinchu-based chipmaker in February said revenues this year would grow mildly from last year based on improving supply chain inventory levels and market demand. At the time, it also anticipated gradual quarter revenue growth. However, the US’ sweeping tariff policy has upended the industry’s supply chains and weakened economic prospects for the world economy, it said. “Now
RSS