Ernst & Young has turned down about 25 per cent of potential clients in recent years to prevent the accounting firm being drawn into possible scandals, according to newly elected chairman for Greater China David Sun Tak-kei. The firm also resigned as auditor to scores of existing clients last year, including at least 10 listed companies, mainly due to non-agreement on fees. In many cases, Mr Sun said the resignations were prompted after Ernst & Young had found areas in accounts that needed more work, which would have led to higher fees that the companies disputed. 'We all want to have more business but we have to assess the risks involved,' Mr Sun said in his first media briefing since being elected by fellow partners to succeed Anthony Wu Ting-yuk, who retires at the end of this year. Mr Sun's term as chairman will begin in January next year. 'After the accounting scandals at Enron in the US, all accounting firms have been more concerned about risk management. Ernst & Young has been very selective in choosing our clients as part of our risk-management measures. In the Greater China region, we have turned down one in four potential clients in the last few years.' He said the firm would accept the job as auditor only with companies which had sound management, good internal controls and high growth potential. 'This does not mean we are going to serve only large companies and ignore small firms. We will continue to provide services for small players which have good growth potential. Yahoo! and Google started as small companies but they have become big players,' he added. Even with such a selective approach, Mr Sun said the business potential in China was so huge that Ernst & Young expected to increase its headcount in the region from 4,000 to about 20,000 in the future. 'In the US, the ratio of accountants to the population is one to 1,000 while in China, the ratio is just one to 10,000. With the growth of China's economy, we expect to see it catch up to a similar ratio as in the US,' he said. In China, the firm provides services for initial public offerings as well as tax and advisory services for mergers and acquisitions. The company has just moved to offices in IFC Two, occupying five floors and replacing offices in Hutchison House in Central and Gateway in Tsim Sha Tsui.