The Chartered Institute of Management Accountants (CIMA) feels Hong Kong firms should rotate their external auditors on a regular basis so as to minimise possible interference with their independence. In response to a Hong Kong Exchanges and Clearing (HKEx) consultation paper on corporate governance, issued in January, CIMA president Teddy Iu said: 'We strongly recommend that the rotation of external auditors over a reasonable period of time - say five years - should be adopted. This should enhance the independence of the external auditor.' Auditors' independence from their clients has come under a cloud in the wake of Arthur Andersen's role as auditor to collapsed United States energy trader Enron. The accounting giant's US arm allegedly destroyed thousands of Enron-related records after learning of a federal investigation. Apart from ensuring auditors' independence, CIMA also suggested strengthening the role of accounting professionals in the management of listed firms. It proposed making it obligatory for listed firms to have a qualified accountant as a member of its audit committee, and to appoint a qualified accountant as its chief financial officer. It also supported HKEx's proposed quarterly financial reporting requirement. Mr Iu dismissed concerns that the reporting requirement could be a burden for smaller listed firms, pointing out that the proposal would take a firm only two weeks a year at most to prepare the additional financial information. In respect of board-room governance, CIMA backed the HKEx proposal for not less than a third of a board to be independent directors. Present listing rules require a company to have at least two independent directors. But Cima went a step further, suggesting the independent directors be elected by independent shareholders - something the HKEx says might not be conducive to a 'harmonised' board.