AUDITORS have raised red flags over nearly half a dozen S-chips in just the past week alone, as they step up checks on companies. And with the financial crisis still raging, analysts expect even more such cases to come to light.

In the past few days, the auditors of China EnerSave, Sino-Environment Technology Group, Celestial NutriFoods and Ocean International have all raised doubts in audit reports over the capacity of these businesses to continue operations.

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Another China company listed here, China Sun Bio-chem Technology Group Company, even had its shares suspended from trading after its auditors questioned the existence of certain debtors in the firm's books.

It joined the likes of FerroChina, China Printing & Dyeing, Beauty China, Oriental Century and FibreChem Technologies in having their shares suspended.

Auditors are doing more checks on companies' books as they rush to complete their audit reports for companies with a Dec 31 year-end.

'The credit crunch and economic downturn have prompted the various parties to be extra vigilant,' said the vice-president of the Institute of Certified Public Accountants of Singapore, Dr Ernest Kan.

That is not to say that they have not been doing their work, added Dr Kan.

But the financial crisis and the recent reminders by the Accounting and Corporate Regulatory Authority and Singapore Exchange have resulted in auditors focusing more attention on risky areas.

For example, auditors are now asking companies to do a cash flow and profit forecast for the year so that the auditors can assess their future prospects and see if the firms have enough funding coming in.

This is usually not necessary in good times as cash flow is taken for granted, said Dr Kan.

Read the full story in today's edition of The Straits Times.