KARACHI, June 19: A Pakistani auditing firm loses its first major client as Singer proposes to replace auditors, following the fall of Arthur Andersen — one of the world’s big five accounting firms.
Singer Pakistan Limited told its shareholders this week that the company had been informed by the majority shareholders — Singer (Pakistan) B.V.— that they proposes to name Taseer Hadi Khalid & Co. chartered accountants as auditors of the company in place of Sidat Hyder Qamar & Co., chartered accountants for the next accounting year. The appointment of auditors is an item on the agenda for the annual general meeting scheduled to be held on June 25.
Sidat Hyder is affiliated with Arthur Andersen, whereas Taseer Hadi Khalid is an affiliate of KPMG — second of the remaining big four global accountancy firms.
Adnan Shaikh, Singer Pakistan’s company secretary told Dawn on Wednesday that the proposal of 70 per cent majority stakeholder in Singer, was in line with the parent company’s decision to switchover auditors, worldwide, from Arthur Andersen to KPMG.
A US federal jury on Saturday found Chicago-based accounting firm Andersen guilty of obstructing justice (shredding documents) in an investigation of its client, Enron Corporation. The verdict means that Andersen can no longer audit publicly traded companies. But even before this week’s verdict, Andersen was known to have lost 700 of its biggest clients out of a total of 2,300.
Singer Pakistan — the company that manufactures/assembles sewing machines and appliances and also deals in goods purchased for resale — made a profit of Rs9 million on sales valued at Rs136 million for the latest quarter ended March 31. The possible loss of auditing jobs of Andersen related multinationals is not likely to be a major blow for Sidat Hyder — which itself ranks among one of the big few local accountancy firms in the country. The company maintains offices in three cities and has around a thousand employees on its rolls.
The other three global big: PriceWaterhouseCoopers; Deloitte & Touche and Ernst & Young have also local affiliates in one or the other of the major firms of accountants in the country, the total number of which can be counted on the fingertips of one hand.
The number of Andersen global clients in Pakistan is not readily ascertainable; but as the Chicago-based once revered accountancy firm fulfils its promise made to the Securities and Exchange Commission (SEC) of US — to cease audit of publicly traded company by August 31, its local clients would understandably fall in the lap of one or the other of the top few.