(Yicai Global) Dec. 9 -- There has been a wave of companies listed on the Chinese mainland stock exchanges which have said that they are appointing a different accounting firm before the end of the year. This could have to do with managing risk better and to give the companies more auditing options, industry insiders said.

From Oct. 1 to Dec. 7, more than 100 listed companies said they planned to change their accountants, according to incomplete statistics. And many are choosing smaller and newer firms.

Although most of them cited the expiration of contracts, a more objective audit, business development needs and a shortage of human resources, industry insiders believe that the real reasons are due to operating risks, corporate governance, poor performance and delisting risks.

Also, many are dropping audit firms that have recently been penalized for preparing sub-standard financial reports and other offences.

Jiangsu Wanlin Modern Logistics, for instance, said last month that it will replace Pan-China Certified Public Accountants with Asia-Pacific (Group) Certified Public Accountants as the company’s financial auditor for 2022.

In the past three years, Pan-China Certified Public Accountants has received five administrative penalties, 29 supervision and management warnings, three self-regulatory measures and two disciplinary sanctions for its professional conduct, involving 50 practitioners.

But abrupt and frequent changes will attract scrutiny from regulators.

Guirenniao changed its accounting firm twice in July and October, prompting the Shanghai Stock Exchange to write an enquiry letter asking the Chinese shoemaker to explain the reasons for so many changes in such a short period of time. Guirenniao said last month that it has canceled the planned shareholding’s meeting to approve the suggested change in auditor.

Editor: Kim Taylor