uphill struggle - agn international · july 2015 issue 551 for the profession s women in africa...

www.InternationalAccountingBulletin.comJuly 2015 Issue 551

for the profession’s women in Africa

● Key Will Group to be revived? ● Interview with Sacha Romanovitch

● Role of accountants in illicit financial flows ● Asia-Pacific survey

Uphill struggle

551.indd 1 20/07/2015 16:02:57

Give your students a business perspective of the world of accounting. Give your students access to content they can trust. Give your students the edge. Subscribe to The Accountant

www.vrl-financial-news.com

A subscription to The Accountant is the ideal accompaniment to an accountancy course of study. Including exclusive features and interviews with major figures in the accountancy sector, The Accountant will help your students to understand the real-world implications of the theory they are learning, and help improve their employability in a competitive jobs market. A weekly newswire gives you regular updates of all the big stories, while IP access means students can view our content anywhere with access to the student portal.

Subscribe to The Accountant for: • IPaccesstoourcontent.Soyourstudentscanaccessour

content campus-wide with one login

• Contentyoucantrust.Wehave125yearsofexperiencedelivering accountancy news.

• Trulyglobalanalysis.Wecoverarangeofstoriesfromaroundthe world, so your students get a wide perspective of the sector.

SIGN UP FOR THE FREE NEWSWIREGet free weekly updates and free content. Sign up here:

http://www.vrl-financial-news.com/system-pages/headernav/free-news.aspx

DON’T mISS OUT. Subscribe to The Accountant today. Contact our subscriptions team on +44(0)20 7563 5688 or email us at [email protected] to find out more.

www.theaccountant-online.com/newsletter-subscription

[email protected]+44 (0) 203 096 2603

551.indd 2 20/07/2015 16:03:00

www.InternationalAccountingBulletin.com July 2015 y 1

EDITOR’S LETTERInternational Accounting Bulletin

Give your students a business perspective of the world of accounting. Give your students access to content they can trust. Give your students the edge. Subscribe to The Accountant

www.vrl-financial-news.com

A subscription to The Accountant is the ideal accompaniment to an accountancy course of study. Including exclusive features and interviews with major figures in the accountancy sector, The Accountant will help your students to understand the real-world implications of the theory they are learning, and help improve their employability in a competitive jobs market. A weekly newswire gives you regular updates of all the big stories, while IP access means students can view our content anywhere with access to the student portal.

Subscribe to The Accountant for: • IPaccesstoourcontent.Soyourstudentscanaccessour

content campus-wide with one login

• Contentyoucantrust.Wehave125yearsofexperiencedelivering accountancy news.

• Trulyglobalanalysis.Wecoverarangeofstoriesfromaroundthe world, so your students get a wide perspective of the sector.

SIGN UP FOR THE FREE NEWSWIREGet free weekly updates and free content. Sign up here:

http://www.vrl-financial-news.com/system-pages/headernav/free-news.aspx

DON’T mISS OUT. Subscribe to The Accountant today. Contact our subscriptions team on +44(0)20 7563 5688 or email us at [email protected] to find out more.

Women leaders take center stage

NEWS 02-03

CONTENTS

FEATURES 04-05

REGIONAL SURVEYS 06-25

06-19 AFRICA

Editorial Advisory BoardKevin McGrath, Crowe Horwath International CEOKevin Arnold, Nexia International CEOGeoff Barnes, Baker Tilly International president and CEOGraeme Gordon, Praxity executive directorStephen Jacobs, INPACT International presidentJon Lisby, Kreston International executive directorTimothy Wilson, MSI Global Alliance, CEOChristian Mouillon, EY global vice-chair, assuranceEd Nusbaum, Grant Thornton International CEOMichael Reiss von Filski, Geneva Group International CEOLiza Robbins, Morison International CEOMartin van Roekel, BDO International CEOJean Stephens, RSM International CEORobert Tautges, HLB International CEO

19-25 ASIA PACIFIC

“Don’t get caught on the superficial. Diversity is about how comfort-able you are with people who don’t think like you, and about how to bring those people into your circle, so that you’re actually doing better thinking than you would surrounding yourself with people who look like – and think like – you,” is what newly appointed CEO of Grant Thornton UK Sacha Romanovitch told me when I asked if it was important to notice she was the first female to be appointed as CEO of a major UK accountancy firm.

While this statement might look a bit superficial at first, the impli-cations it carries are tremendous, and it’s easier said than done. How-ever it seems that at Grant Thornton UK the revolution is not to have appointed a female CEO, but rather Romanovitch’s drive to make the firm more transparent, interconnected and citizen-centric. (Page 4-5)

However on the topic of gender inequality, further south of the UK, African women leaders are still fighting for emancipation. Most participants in our sister publication The Accountant’s round table agreed that female leaders in the West had it easier than them. Nevertheless at the Africa Congress of Accountants (ACOA15) it was interesting to note the number of female leaders in top posi-tions, maybe even more so then in the West – the six participants in the roundtable were each leaders in their own organisations, and also present at the congress, were for example, Hajia Ibrahim chair of the Nigerian Financial Reporting Council and Asmaa Resmouki audit partner of Deloitte Morocco and president of the Pan-African Federation of Accountants, to name a few.

Of course there’s a need for more women in the profession, in Africa and globally, and more importantly to provide an “and envi-ronment” where they can stay with the firm as well as raising a fam-ily rather than an “either/or environment”, as IFAC president Olivia Kirtley explains. (Page 6-10)

Gender inequality is only one of the challenges Africa is facing and despite popular belief, corruption is one of the smallest hurdles for the continent’s development. But while governments and civil society in Africa are pushing for more transparency, more democracy and ultimately more stability in the financial markets, which would bring investments and fuel development, much remains to be done. (Page 11-17)

Africa has made tremendous progress both political and economic since liberating itself from colonisation, but there’s no doubt that the 21st century’s success story has to be a risen Africa, otherwise it will only be a failure of our global system. How can we consider the world to be global and interconnected when over one billion people are excluded from the game, its rules setting and its gains?

Africa’s success will be African, and only Africa’s doing, but still the continent can build on Asia’s experience.

The Asia-Pacific region, which has been for a few years and con-tinues to be the fastest-growing of all regions in the world, is going through tremendous change. Emphasis is put on corporate gover-nance and governments from the region have reached a level of coop-eration never seen before.

The strengthening of the regulatory requirements, as well as their implementation, generates costs and compliance difficulties for firms. But ultimately they will contribute towards an environment for accounting firms to thrive. (Page 20-25)

Finally International Accounting Bulletin would like to send its best wishes to its editor, Ana Gyorkos, who’s going on maternity leave at the end of July and will be back with us at the end of the first quarter of 2016.

Vincent [email protected]

■ Singapore Airlines seeks first change of auditors in four decades.

■ SEC charges Deloitte US with violating auditor rules.

■ Key Will Group members launch bid to revive the association.

GRANT THORNTON UK

Newly appointed CEO of Grant Thornton UK Sacha Romanovitch tells Vincent Huck why she is handing the firm to the staff and how traditional models of leadership are bound to disappear.

A round-up of current issue and controver-sies from the continent aired at the Africa Congress of Accountants in Mauritius, attended by Carlos Martin Tornero and Vincent Huck.

The vast Asia-Pacific region’s business world is dominated by several key economic hubs. For firms to be successful they must safely navigate between these islands of growth. Vincent Huck reports

551.indd 1 20/07/2015 16:03:22

2 y July 2015 www.InternationalAccountingBulletin.com

NEWS International Accounting BulletinROUND UP

Facebook page World Accounting Intelligence

Join our online community

LinkedIn Group World Accounting Intelligence

Twitter WAI_News

IAB ONLINE – MAY

Top 5 articles

Grant Thornton loses member firm in Singapore

RSM International adopts single brand across global network

US SEC charges Deloitte US with violating auditor independence rules

DFK International doubles its presence in China through new addition

Italian network takes first step for further integration

Most retweeted article

CIMA’s Tagoe: FIFA’s auditor is not coming out smelling of roses

Read in 153 countriesUK 17%

US 11%

Russia 8%

Singapore 9%

Malaysia 4%

Rest of the world 52%India 4%

SINGAPORE

Singapore Airlines seeks first change of auditors in four decadesIn a letter to their shareholders, Singapore Airlines has proposed the appointment of KPMG as its new external auditor to replace EY, their auditors for the last 43 years.

EY was first appointed as Singapore Airlines external auditor in 1972 but will not seek re-appointment at the airline’s coming annual general meeting (AGM), the letter read. KPMG’s appointment will be confirmed at the company’s AGM scheduled for 30 July.

It is understood that KPMG’s audit partner Tham Sai Choy will be in charge of the audit. Choy is KPMG Singapore managing partner since 2010 and chairman of KPMG Asia-Pac.

SPAIN

Santander changes auditor, while EU audit reform is denounced in SpainSantander reported yesterday to the Spanish securities regulator, Comisión Nacional de Mercado de Valores (CNMV), that its auditor will be PwC from fiscal year 2016 until 2018.

Deloitte, the bank’s statutory auditor since 2002, will continue the work for fiscal year 2015. Santander informed the CNMV that the change follows good governance recommendations on audit rotation.

After 13 years auditing Santander’s financial statements, Deloitte has already exceeded the period when, according to best practice, the audit contract should

go out to tender to safeguard the independence and professional scepticism.

For example, the Competition and Markets Authority (CMA), a non-ministerial department of the UK government, published in October 2014 an order that requires mandatory retendering for FTSE 350 companies every 10 years.

Other banks could follow suit soon on Santander’s move. In fact Barclays recently ended its 100-year long contract with PwC to appoint KPMG as auditor.

The change of audit firms at Spain’s top bank, coincided with a release issued by the Corporation of Auditors of the General Council of Economists (known as REA+REGA), where the professional body reiterated its concerns over the implementation of the EU audit reform in Spain.

According to REA+REGA, the bill currently being discussed at the national parliament isolates the Spanish market from the rest of the EU, stipulating unnecessary requirements which would have the effect of increasing audit fees

US

US SEC charges Deloitte US with violating auditor independence rulesThe US Securities and Exchange Commission (SEC) has charged Deloitte US with violating auditor independence rules when its consulting affiliate maintained a business relationship with a trustee serving on the boards and audit committees of three funds it audited. Deloitte agreed to pay more than $1m to settle the charges.

In 2006 Deloitte Consulting acquired a proprietary brainstorming business methodology from the trustee Andrew Boynton and collaborated with Boynton to implement it and serve both internal and external firm clients throughout 2011.

“Deloitte violated the rules with respect to the appearance of independence by failing to follow its own policies and conduct an independence consultation prior to entering into a new business relationship with Boynton,” the SEC order reads. “Deloitte failed to discover that the required initial independence consultation was not performed until nearly five years after the independence-impairing relationship had been established between Deloitte Consulting LLP and Boynton, who was paid consulting fees for his external client work.”

Meanwhile, Deloitte represented in audit reports that it was independent of the three funds while Boynton simultaneously served on their boards and audit committees.

Boynton, a member of three funds boards and audit committees failed to identify his business relationship with Deloitte Consulting and as such was also charged by the US SEC.

Without admitting or denying the findings Deloitte agreed to pay disgorgement of audit fees in the amount of $497,438 plus prejudgment interest of $116,478 and a penalty of $500,000. Boynton agreed to pay disgorgement of $30,000 plus prejudgment interest of $5,329 and a penalty of $25,000.

NEWS ROUND-UP

MOVERS & SHAKERS

Deloitte has appointed David Cruickshank as its global chairman. Cruickshank, who has been Deloitte UK chairman from 2007 to 2015, succeed Steve Almond who has retired. Cruickshank qualified with ICAS and has been with Deloitte for 36 years. Prior to his role as UK chairman he led Deloitte’s tax team and specialised in international tax.

IAPA has appointed Stephen Hamlet as its new chief executive officer replacing Susan Humphry who retired after 11 years in the

post. Previously Hamlet was BKR International EMEA regional executive director. Hamlet said:

“My particular focus will be on consolidating membership in key business locations, maximising membership benefits through promotion of the IAPA brand, and the development of an expanding range of practical services to encourage new business generating opportunities for our members.” In International Accounting Bulletin’s latest world survey, IAPA ranked as the eight largest association reporting

$1.2bn in financial year 2014.

Paul Raleigh has been appointed as the global leader for growth and advisory services at Grant Thornton. Raleigh has been part of the network’s global leadership team since 2012 and has most recently served as global leader for strategic development and growth, and as regional leader for Europe. He also served as managing partner of Grant Thornton Ireland from 2003 until 2012. Raleigh will take over from Nigel Ruddock, who is retiring from Grant Thornton.

551.indd 2 20/07/2015 16:03:27

July 2015 y 3www.InternationalAccountingBulletin.com

NEWSInternational Accounting Bulletin ROUND UP

DFK International has added

a Chinese member firm to its

association in a move that could

potentially double the international

association’s revenues in Greater

China. Peking CPAs, which has

10 offices throughout China and

more than 1,200 staff, generates

annual revenue exceeding US $30m,

according to DFK International. With

the new addition DFK International

could take over Morison International

as the second largest firm in the

region (dependent on exchange

rates).

BDO has added BDO Honduras,

formerly Mendieta y Asociados, to

its network. Headquartered in

Tegucigalpa, the firm reported

fee income of HNL17.1m in FY14.

It has one partner, two directors

and 44 staff and has an additional

office in San Pedro Sula. The firm

was previously a member of AGN

International, according to BDO.

GMN International has added Serbian

firm DIJ-Audit to its association.

Based in Belgrade, DIJ-Audit counts

three auditors. The firm provides

audit and consulting services.

Moore Stephens Australia is to add

Nexia Melbourne to its network

in the coming months. Nexia

Melbourne, which will be trading

as Moore Stephens (Vic) Pty, has

16 directors, 100 staff and annual

revenue of A$20 million.

Chilean firm Tax Global has joined

the TGS Global network. Based

in Santiago, the firm provides

tax, business advisory, audit and

outsourcing services throughout

Chile.

Nexia International has added

a member firm in Kuwait and

expanded to Burundi and Rwanda

via its South Sudan member firm.

Alwaha Auditing is based in the

State of Kuwait with three partners

and 23 staff. It provides tax, audit,

corporate zakat, business advisory

and asset valuation services.

IDIAA, an existing member of

Nexia International based in South

Sudan, has expanded into Burundi

and Rwanda. With new offices in

Bujumbura, Burundi, and Kigali,

Rwanda, the firm specialises in

providing audit, tax, risk and

advisory services to businesses and

the humanitarian sector. The firm

employs a managing partner, four

managers and 22 members of staff.

TGS Global has added KK Group to its

global network, it’s its first member

in Georgia. KK Group provides audit,

accounting, tax and consulting

services across to local companies

and a number of foreign-owned

enterprises both regionally and

internationally.

MSI Global Alliance has added

German firm Herden Bottinger

Borkel Neureiter (HBBN) and US

accounting firm Holsinger to its

association. German HBBN has

offices in Osnabrück and Hamburg

employing 80 staff offering audit,

accounting, tax and consulting

services. In the US, Holsinger is

based in Pittsburgh, Pennsylvania

and has an additional office in

Honolulu, Hawaii. The firm employs

45 staff.

Geneva Group International (GGI) has

added German firm Franken-Treuhand

to its association

Franken-Treuhand provides auditing

& accounting and tax services. The

firm counts five partners and 25 staff.

Kreston has added Thai Info, a

former BDO International member

firm, to its network. Thai Info

counts three partners and 30 staff.

The firm offers audit and consulting

services.

FirmMovements

CHINA

Key Will Group members launch bid to revive the associationMember firms of Chinese headquartered Key Will Group are starting discussions to revive the international association which has gone mute in the course of last year, International Accounting Bulletin has learnt.

Key Will Group was originally estab-lished in 2011, and in financial year 2013 it reported $34.8m total fee income making it the 23rd largest international association in International Accounting Bulletin’s 2014 world ranking.

But in the course of 2014 the international association went off the radar as its leader-ship ceased all activity.

International Accounting Bulletin has

now learnt that Key Will Group chair-man, and one of its founders, Alex Chu has resigned effective 30 June 2015, for personal reasons.

Mancy Chan, formerly registrar of mem-bership of the association, has taken the interim chairmanship.

Member firms have launched a bid to revive the association and suggested a rebranding and incorporating the organi-zation in London or in the US, IAB under-stands.

However some members suggested that the future lies in Asia and the association would have more opportunities in keeping its headquarters in that part of the world.

It was also suggested to organize a mem-bers meeting to discuss a common agenda. Members proposed that the agenda should address issues such as: election of a new lead-ership, updating list of members, location of headquarter and structure of the global organization, new name and branding, goals and objectives of the association, member-ship fees, online presence, members confer-ence.

It is understood that in response to the members’ initiative William Chan of Key Will Business Advisory Services, a founding member of Key Will Group, has voiced his willingness to play a key part in rebuilding a new global accounting association. <

551.indd 3 20/07/2015 16:03:28


FEATURE International Accounting BulletinSHARED ENTERPRISE

If the UK market was a stage, it could be said that Sacha Romanovitch has man-aged a sensational entrance in her new role as CEO of Grant Thornton UK.

In the first weeks of her tenancy at the helm of the fifth-largest UK firm, she announced she would cap her salary and that the firm would adopt a shared enterprise model.

The move, Romanovitch explains, is root-ed in her belief that business has a part to play in solving the big problems the world faces and her ambition for Grant Thorn-ton UK to play and active role in shaping a vibrant economy and helping to tackle some of these broader issues.

“So there’s this bold ambition that we could be so much more, and then a belief that to achieve that is not going to be by operating the old model of leadership,” she says, taking the human body as a metaphor: the head, senior management, does the thinking and the rest of the body execute.

“I knew that we needed to move to a model where everybody is able to contrib-ute,” Romanovitch continues. “And unless we have everyone contributing we won’t make the difference that I know we can make.”

She describes shared enterprise as three simple things: sharing ideas, sharing respon-sibility and ultimately sharing the reward.

However some observers who didn’t wish to be named suggest that there might be more pragmatic incentives behind the move related to cost reduction. But Romanovitch is adamant that it wasn’t a driver in the deci-sion.

“I think the only thing I would add, which is probably an important reason for going into it, is in the last recession the belief that there was a job for life, that the company would look after you. The change in the economic environment has meant that has been broken,” she says, adding that there is therefore a need to create a different connec-tion between people and their organisations.

Romanovitch adds: “My belief is, and I think there are a lot of commentators out there that now believe this, the connection is the shared purpose of why we believe we’re in business together.”

Grant Thornton UK is not the first busi-ness to adopt a shared enterprise model; a few companies already operate under such models in the UK and also in other jurisdic-tions, the UK retailer John Lewis Partner-ship being the most famous example. But the mid-tier firm is the first to do so in the professional services sphere where tradition-ally firms are owned by partners.

In fact, in the UK there are a number of regulatory requirements for a firm to operate as a chartered accountancy firms linked to the number of chartered accountants which are partners. Therefore, while Grant Thorn-ton UK will move to a shared benefits model, Romanovitch explains, in the first stage partners will remain partners and employees remain employees.

“Certainly we’ve been inspired by the John Lewis model, but we’re not implementing a John Lewis model,” she says. “Part of the work we’re doing is seeing how can we learn from the best of what other people have done and create something that is uniquely the Grant Thornton model.”

What the Grant Thornton model will look like however remains to be seen. As Romanovitch explains she doesn’t know herself.

“Our belief is that the best ideas are going to be coming from engaging with all of our people, rather than just having a few people in the room designing something and going ta-da! here we are,” she says.

Over the next few months, Grant Thorn-ton UK employees will have the opportu-nity to engage in a series of face-to-face and online forums, to bring forward their ideas in a crowdsourced business plan.

Romanovitch admits that going into shared enterprise and exposing the idea that she didn’t know exactly how things would shape out, she received a few blank faces and the usual question was: “You mean you haven’t worked it all out beforehand?”

She would answer no; that the point was to get the employees involved in shaping something that is engaging and empowering for them, and ultimately what would tran-spire from those resisting the idea was the anxiety of failure, the question “what if it all

goes wrong?”.Romanovitch is not the least preoccupied

with this question. As she points out, she is a scientist by background having graduated in chemistry from Oxford University. “As a chemist you do experiments. An experiment doesn’t fail, you learn something from it and you build up that learning into your next experiment,” she says.

The first phase, Romanovitch reiterates, is the shift in mentality to have everybody involved and shaping the plan. “So partners still put capital into the business. We’re not going to be asking our people to put capital into the business. But the additional prof-its that we generate, we will actually share across everybody.”

The working premise, which might change depending on what comes out of the con-sultation process, is that salaries and bonus schemes will remain in place, but in addi-tion, at least 25% of the incremental profit

Power to the employees Newly appointed CEO of Grant Thornton UK Sacha Romanovitch tells Vincent Huck why she is handing the firm to the staff and how traditional models of leadership are bound to disappear

551.indd 4 20/07/2015 16:03:30


FEATUREInternational Accounting Bulletin SHARED ENTERPRISE

that is generated would go to Grant Thorn-ton UK’s staff, proportionally to each indi-vidual’s salary.

While many at Grant Thornton seem excited by the project, the uncertainty of where the ship will dock is felt in conver-sations. A sceptic in a private conversation with International Accounting Bulletin won-dered if the bonuses will remain at the same level or would drop significantly. Because, this person says, if employees get a share of the benefits, but at the same time their bonuses drop, it defeats the purpose.

However speaking with International Accounting Bulletin, Romanovitch seems resolute that the move to shared enterprise will not impact the firm’s current reward structure. Moreover, the sceptic says, even if he has reservations about the move he believes Romanovitch to be genuine and transparent in exposing her reasons for driv-ing this project.

Regardless of the reasons behind the move and its outcome, one can only admire such a statement by an incoming CEO. If she freezes her salary and gives the firm to the employees in her first month in the job, is there anything else we can expect? Is there anything else she can do?. “I think I’m done,” she replies laughingly before return-ing to a more CEO-like answer.

“Those are foundations that will let us to do even better work with our clients,” she says, before revealing Grant Thornton UK’s goal for the next five years. Ultimately the target she has set herself is to make Grant Thornton UK the “go-to firm for growth by 2020” and to double profitability by then.

“You know it’s a difficult world for busi-nesses, things are changing all the time,” she says. “A lot of businesses are trying to make sense of where to go for growth, and what the choices are. Business need from their advisors people who can help them stand on the balcony, not be stuck in the engine room. The things we’re doing internally are really enablers that let our people focus on how we really create value for our clients, and that’s the goal of it all.”

While she foresees audit as remaining an important part of Grant Thornton UK’s business, she says a number of businesses will come out of the statutory audit require-ments in the not-so-distant future and they will still require advice and some type of assurance.

“Audit is an important part of what we

do,” says Romanovitch. “Equally, there are a whole lot of other different ways in which we can create value for businesses, and if we’re part of that vibrant economy, then we have a responsibility to make sure we’re looking at all the different aspects where we can help, not just being too narrow.”

Looking at the UK market, she says recent efforts to curb the concentration in the audit market have not really worked, as in the FTSE 100 audit engagements are going from one Big Four firm to another.

In that sense Romanovitch is quite critical of the EU audit reform which is being imple-mented across EU member states, including the UK, which mandates 10-year rotation and prohibition of non-audit services to audit clients.

There are still some more structural changes in the marketplace that are needed for the reform to have the impact it intends to have, she argues.

“When you look at some of the largest companies in the UK, the reform forces peo-ple to rotate, but they still need to have advi-sors who have sufficient scale to be able to take on their work,” she says. “That’s where I say it needs structural change, because there still are only a limited number of busi-nesses that have the scale to take on certain parts of the work for the largest businesses in the UK.”

The reform which in her view will have more impact is actually the one around busi-nesses falling out of the scope of audit, as she believes this is where there will be innovation around how assurance is really valuable in today’s world.

“There are still questions on the value of statutory audit: are the audit and financial reporting serving the purpose they were set

up for?” Romanovitch asks. “I don’t know that it’s seen as valuable now.”

The main issue she says is that there is no alignment on what the problem is and there-fore there are no agreements on the solu-tions needed. “What is the audit there to do? What is valuable to investors in an audit? How is information produced in a way that makes it easy and accessible for investors to understand?” she says. “It feels like we haven’t got into that conversation, before we get into how we restructure the market to make sure there is rotation.”

Another issue for the profession globally, but specifically in the UK, which Romano-vitch really has at heart is the talent gap. To this effect she’s been involved from scratch in the development of the Access Accountancy initiative, which gets all the firms collaborat-ing to tackle the UK talent gap.

“The biggest issue we face isn’t so much gender or anything like that. The profession is still fishing in a very narrow pool of talent, from the Russell Universities, which are the elite universities in the UK, and if we want to make sure the profession is actually rep-resentative of society as a whole, we need to cast our net wider.”

It’s interesting to hear the first female CEO of a major UK accounting firm saying diver-sity is much more than gender inequality, so I ask if she thinks it’s helpful that the media picked up on that aspect of her appointment.

“It would be lovely if it wasn’t news being a woman,” she replies. “The opportunity with it being unusual means that you can start a different conversation around diver-sity. That diversity isn’t about the fact that I’m a woman or that you’re a man; it’s the fact that you’ve had a completely different life experience to what I’ve had, so you will see the world in a way that I will never see, and vice versa.”

And if we create an environment where we’re confident to share that, creating a bigger picture of the world together than we ever could on our own, that’s what real diversity is, she continues.

“Being asked about it gives an opportunity to put forward this idea – don’t get caught on the superficial. Diversity is about how comfortable you are with people who don’t think like you, and about how to bring those people into your circle, so that you’re actu-ally doing better thinking than you would surrounding yourself with people who look like – and think like – you.” <

“Don’t get caught on the superficial. Diversity is

about how comfortable you are with people who don’t think like you, and about how to bring those people

into your circle, so that you’re actually doing better

thinking than you would surrounding yourself with people who look like – and

think like – you”

551.indd 5 20/07/2015 16:03:31


REGION SURVEY

During the Africa Congress of Accountants, six African women from South Africa, Botswana, Nige-ria and Mali joined IFAC president

Olivia Kirtley and sister publication The Accountant to talk about the challenges of women’s emancipation in Africa and the dif-ficulties they face in leading successful busi-ness careers. The meeting took place a few hours after the congress’s concurrent session “woman and accountancy” where three of our round table participants were panelists.

International Accounting Bulletin: Is it harder for African women than women in the west to have a career?

Elizabeth Adegite: The challenges are the same: women are women, wherever they are in Africa or Europe.

The main issue here is that people have in the back of their mind that women are not meant to be in this profession, that this profession is meant for men. This is a male dominated profession and they want to keep it that way, but of course we know that things change.

So I believe that by and large there might be a few differences here and there, but really traditionally, we the women, are seen as out of the decision making process. The men can do the decisions; the women are only con-sulted and are involved in things other than decision making. They are not seen as people who should get to the top.

So all said and done, the African woman has to deal with two things: progress, to catch up with its counterparts in the west-ern world, which implies education, and then dealing with the traditional problems; prejudices, stereotypes, and again the lack of education to a certain extent.

May Nwoye: In Africa, there is this percep-tion that women are second-class citizens. And if a woman tries to do otherwise, tries to move from that traditional belief, she has a lot of problems. And this has been incor-porated into our organisations, into govern-ments, even in social settings. And that has been hindering women from moving up the corporate ladder.

It’s a very discriminatory environment and it’s not even only an issue of men as it is. Because most of the time, it’s a fact that some women themselves try to block the progress of other women, I find this difficult to accept.

For instance the mothers in law, they wouldn’t want the wife of their children to work or have a career. So women most of the time end up having to choose between marriage and the corporate world.

Because traditionally there is this belief that the highest degree a woman can get is marriage, the highest certificate she can receive is a marriage certificate. That’s what Africans believe. So when a woman does anything outside of this, she is perceived as being deviant or wayward.

This is, the bulk of the matter, for Afri-can woman. It’s not common, because in the western world a woman can live a life without getting married. In Africa, you can choose that but they won’t let you be, there is pressure from the entire society.

Tshegofatso Modise: I totally agree with their sentiments and, by the way, I’m that woman. I’m not married, I’ve chosen a career over the family life but I do have a child.

So I’m that woman that she is talking about. I work in a mining environment. I’m a chartered accountant and an internal audi-

tor so I head the division of internal audi-tor in a mining environment. And I’ve had to double the efforts to just make it in the executive. And it’s very uncommon to see that happen in a mining boardroom.

So everything that she said, she was spot on. And I have to share the story that hap-pened in Ghana two years ago. I had just been appointed president of the institute two weeks before going and I had to present a paper when I got there. I had traveled with my then CEO who was a man, and the men thought I was the PA, that I’m here to carry his bag, meanwhile he is carrying my bag.

And I remember in the morning we were exchanging words and it went like this: “ah you are the president. Are there no men in Botswana?” That was the first question. The second question was: “Are there no old peo-ple in your institute?”

I was thinking ‘where is this going’. They said you are young and you are a woman. How can you be a president? I said: a mat-ter of record, I’m the second woman presi-dent in the institute, only the first indigenous woman but the second in the institute’s his-tory.

And it was unheard of, the Kenyans were shocked, so were my brothers from Nigeria. So then they turned it around and said “okay we also have women but not this young”.

It’s a challenge. In my profession, because also I’m a small woman, I’ve always got to compensate, because people think I’m a baby and therefore I don’t have anything to put on the table when it comes to matters of audit.

So being a woman in the African culture you have to overcome various barriers to really make it. You have to double the effort to really make it and to seat in the board-room.

That’s been my experience to date.

Hear the roar of the African women’s silence

African leader and pro-feminist Thomas Sankara said in the eighties that he could hear the roar of women’s silence. Nearly

30 years later, African women leaders tell Carlos Martin Tornero and Vincent Huck

the challenges they face to lead successful careers

551.indd 6 20/07/2015 16:03:34


REGION SURVEYInternational Accounting Bulletin AFRICAN WOMEN IN BUSINESS

Elizabeth Adegite: Institute of Chartered

Accountants of Nigeria, past president

May Nwoye: IBB University Nigeria,

professor of Business Administration

Tshegofatso M

odise: Botswana Institute of

Chartered Accountants, past president

Faith Ngwenya: South African Institute

of Professional Accountants, technical

executive Cynthia Mbili: SizweNtsalubaGobodo,

technical director

Olivia Kirtley: International Federation

of Accountants, president

Taher Drave Ly: MCG Audit, partner

ACOA15 panel: woman & accountancy

Mauritius, 12/5/15

Participants

Faith Ngwenya: I think it actually talks to what society has defined to be the board-room character and in that definition the woman did not feature. And that is why you find that it’s still a challenge for a lot of men to accept it.

The fact that you still find this type of reac-tion she just described, it just confirms that there is this perception that has been cre-ated by society, particularly in Africa, that a woman’s place is not necessarily in the boardroom: it’s still in the kitchen. If it’s not really in the kitchen, it’s being an administra-tor, or a nurse or teacher. There is still that expectation.

But if one is looking now within the accountancy profession, I think to a certain extent, you will find that at universities, there are more female students than males, and it’s actually been like that for the last 10 years.

However, we are not seeing that translating to those qualifying to become professionals. Because even when they are completing their studies, they have the dilemma of choice: do I really go out and make a quick buck or do I continue to qualify as a chartered account-ant where I will not necessarily be earning that much. Unfortunately that is why we still see, that even though they are getting edu-cated, they do not end up fully completing their professional requirements. So I think somehow it’s also in the mentality that “I need to get a job as soon as possible”.

Adegite: It is also about what is your desire, what is the goal that you have, oftentimes a young lady is not able to articulate what she wants.

And this is where role models come in and can guide them. To tell them: don’t be in a hurry, it is brighter when you fin-ish this all thing, and you get out at the top. And you can look at your husband in the face and bring something to the table and the children are going to respect you.

Nwoye: By the time a young girl graduates there is a project from the mother, from the society that she should get married. So she is not concentrating going into a profession, doing a professional exam.

That is no more a priority for her, because they are trying to make her look as if she is running out of time. So until she gets mar-ried, she wouldn’t concentrate.

Students want to go into accounting but

after they have graduated becoming a prac-tising professional accountants becomes something altogether. The elders believe that accounting work is synonymous with com-ing home late, traveling for duty, etc. They don’t believe that you can do a decent work being an accountant. So the young woman has all these limitations and pressures around her and it is mentorship that can change a lot of things.

Cynthia Mbili: From my experience, being a mother of three, it’s always very difficult in this profession in terms of competing with men. The whole profession works better if you are a male because you don’t have the challenges of raising children and a lot of those things.

Where I work I had one lady who is just starting a family, she comes to me and says I’m her boss,

she says, “now I’ve got this young baby, I feel like

I’m neglecting my daughter I want to take time off from pursuing my career”. She’s already a professional chartered accountant,

but now the demand of raising the child… it’s like you need to give up something. Either you give up your family or you give up your career, so you need to always choose.

So for me the main issue was to say why don’t you try and live with this, you’ve worked so hard to become a chartered accountant, why now choose to step down. To actually come back, it’s going to be very difficult; at what point will you come back. Because the first child comes, the second one comes, at what point do you say now I’m going to go back to the profession.

When I was younger, I had a time when I really just came out of the profession and just wanted to find an environment that is more flexible, that will allow me to actually have time to look after the children and also not lose out in the profession. But it is very difficult to remain in the firms, and also raise children.

Adegite: My daughter told me “mommy I don’t want to be like you. You are too career-focused.” That’s what she told me, she said “you are a career woman; you were not there most of the time even though you tried”. So we have to be realistic: there are some sac-rifices.

Mbili: In our firm, we are just starting to have a women’s forum, to really say: how do you change the environment to actu-ally help us as women professionals to remain in the profession and still take care of our families?

It’s our responsibility to actually influence the policies within the firms. Because who would become women leaders if the women are leaving the profession because they can’t deal with the challenges and the demands, it is not only about the

challenges it is also the demands of the pro-fession itself.

Olivia Kirtley: You know we’ve been in sort of an “either-or environment”. Either you stay with the firm or you go take care of your

551.indd 7 20/07/2015 16:03:39


REGION SURVEY International Accounting BulletinAFRICAN WOMEN IN BUSINESS

Olivia Kirtley (IFAC), Cynthia Mbili (SizweNtsalubaGobodo) and Faith Ngwenya (SAIPA)

family. And we need to find an “and environ-ment”, where you can stay with the firm and have a family.

And there are different seasons of life too, where there are higher demands for the firm, and there are higher demands within the family. We need to be able to accommodate that as we go through. I think that some are beginning to do it successfully; we need to share the success.

Adegite: I met a young man, a PwC partner, on my way here, we flew in together and I got to talk and he said PwC are changing the whole environment, there is a conscious-ness that you should make the place gender friendly. To make it conducive for women, recognising that they have a responsibility to take care of their family but it shouldn’t be a sacrifice for their career. So things are begin-ning to change.

Ngwenya: It’s actually up to the women who have already climbed up the ladder to make sure that policies are actually being changed. Sometimes you actually find that when a young lady says “I need to choose between my baby and my career”, the answer they receive is “okay you’d better choose your baby because I don’t have time for that, I’ve got my deadlines”.

So we really need that mindset shift to understand the need to grow these women within the profession while they also are tak-ing care of everything else. And it’s us that are already in those top posi-tions that need to start inculcating that and changing the organisations.

Nwoye: You know I also see some level of dishonesty and cultural stereotype in this set-ting. What I call dishonesty is that they are

not being truthful to themselves, those that are holding firm to tradition and culture.

This is discrimination, males will say women can’t be in business but they can be teachers and nurses and so on. But the same women, nurses in the hospitals, they go for night duty. Who looks after the children? Which one is better, to stay late at my corpo-rate headquarters, or to stay away from the house all night?

Going back to what Elizabeth said, corpo-rate women are still conscious they have to take care of their children but my daughter and my son they told me they don’t want to do a PhD because they saw me writing all the time and they don’t want to do that.

So if your children resent you, your hus-band feels that… you know… he doesn’t want trouble. The society gossips about you: “she is flying here, going there”.

So you can’t have it at all. It is only the women themselves, to get together to move the present paradigm that is not in favor of women, and the women themselves should strive to mentor one another. Because those at the top, they don’t do enough to pull up the people at the lower structure.

Modise: In fact to add on to that, there’s a lady I’ve been mentoring who finished her articles [traineeship] with PwC and then joined Deloitte and then she got married. The couple is from Ghana, but as soon as the marriage happened, the husband is a lawyer and he said “now you need to leave your job, you are traveling too much, you are working long hours”.

Ladies, as I’m talking to you now she is out, she’s had two babies and she is very depressed. So not only have I become a pro-fessional mentor, but also I’ve become a per-sonal mentor.

She is wondering how to stay married and take care of her kids but still fulfill her desire to be a professional woman. So the best advice is let’s go back to the audit firms, because she wants to go back to the practice, and instead of doing audits, because those make you travel, rather go to the other divi-sions: like consultancy, tax, and accounting. At least those keep you in the office, so that’s sort of a compromise.

But by character she is really an auditor and wasn’t convinced, but I said for starters that will help. You’ll be home at 5pm and you still feel like you are mentally stimu-lated and you are developing yourself as a professional. Right now, she is like totally depressed.

Taher Drave Ly: In our country it’s the same as what has been described here. All over Africa, there are social obligations. As a woman when you get married there are obli-gations: family and society pressure you.

In Mali, we also have religion playing a part against women. We get married early often when reaching age of majority, 18, so you don’t even have time to study. Even if you manage to study these obligations pre-vent you to follow a career and work proper-ly. Because often you are absent from work: when the kids are sick you are sick, when the husband is sick you are sick and you are not in the office. And this explains a difference of earnings between women and men, especially at the firms where the fees are based on hours worked.

The second aspect is that it is frowned upon when a married woman goes travelling.

So all these pressures are on the women’s shoulders. But the solution is in the women’s emancipation. Men have to understand that home duties are not only for women. They

551.indd 8 20/07/2015 16:03:41

have to help in those duties for women to have more time and blossom at work.

And then there is the question of our own behavior, we think that our place is at home and not in the office. Even if we work we have a very narrow choice. We usually work in the fields of education, health, agricul-ture. But not in the technical sectors, as it is believed this is the men’s field, and it is not understood that women can do it as well. So even women themselves have to change their mindset, and we need to tell ourselves that women can do it all.

Personally, I had a lot of difficulty in my social environment to evolve. I got married very young, then I resisted the pressure and went all the way through my qualification and goals but I succeeded only because I didn’t listen to what people were saying.

So there is three levels: raise awareness so that, us women, we know we have to move on; government and politicians who have to evolve and help the emancipation of women like the other continents have done it; And professional bodies, which have a role to play, we have to mentor the girls to motivate them because they don’t realise that it is a good job in the end.

All this can help Africa move forward because we made a lot of progress and it’s useless to stop here. We have to move for-ward constantly, so that women are active players in building the world that belongs to all of us. At the moment we are excluded.

IAB: Now the question is, Olivia, do you think it is easier for you in the western world?

Kirtley: Yes. Well that’s very much a gen-eralisation, but I do think we’ve reached a maturity model in the US, where, as I said,

40 years ago we had a similar situation, even though it was probably easier to overcome some of the attitudes than maybe it is in some individual countries.

But people tend to generalise Africa. The US is one country, so it’s much more cultur-ally homogeneous, as opposed to the individ-

ual countries of Africa. But it’s taken us 40 years to move from the acceptance of women in the profession to an acceptance of women in the top leadership roles.

And now it’s a matter of balancing out the leadership, because leaders beget other leaders, to the extent that there is still an imbalance at the top. So we need to reach that balance in order to keep that sustain-able, where women can continue to rise to leadership roles.

In the US we have reached that point, we’re very conscious of it and everyone has seen the benefits of it, so there is striving for it.

I think that many African countries are further back on the continuum of the jour-ney, they aren’t as far along yet. But you can see momentum of moving in that direction, much of the organisations like the one Eliza-beth is in. So it takes organisations like that

to raise the consciousness and keep momen-tum going.

And it’s not only why it should be done but how it can be done. Because I think there is a lot of acceptance of why, but there is a lack of knowledge of how.

Adegite: That is very important and some-thing we should work on. Strategy: how to do that. Women should make their aspira-tions clear and bold enough to state their goals. And not just assume that advance-ment will come based on achievement, as this may not happen soon, if it will happen at all, unless they communicate their ambi-tion, demonstrate their values, and ask influential people around them to become supporters and advocates. We need support systems.

When you became president of IFAC, Olivia, we came back from the World Con-gress in Rome, and we had a meeting of past presidents at my institute.

The president of my institute presented his report and I said “you didn’t mention that we have a female president at IFAC now”. One of them shut me up “what is in that,” he asked. I said: we celebrate our milestones!

So you have to be assertive, you have to be able to put your foot down. It is very impor-tant otherwise they will trivialise it. Successes that we make as women will be trivialised, and they will make it as if there was nothing. But we know we are moving.

Kirtley: But it’s very important to know that it’s possible.

Adegite: We need to be able to tell them whether they like it or not that this is impor-tant.


FEATUREInternational Accounting Bulletin AFRICAN WOMEN IN BUSINESS

May Nwoye (IBB University) and Taher Drave Ly (MCG Audit)

“Often you are absent: when the kids are sick, you are sick, when the husband is sick you are sick and you are not in the

office which explains a difference in earnings betwen women and

men, especially at the firms where the fees are based on hours

worked,” Drave Ly

551.indd 9 20/07/2015 16:03:44

Nwoye: Some men are so traditional, they don’t believe, because when you get into their homes, these men treat their wives as slaves.

The type of liberty you have in your house, they don’t want it. It’s the same type of men that if they see you on the road talking with their wives, they say don’t listen to that woman, he puts the wife down.

IAB: What did you make of the comment of the president of the Association of National Accountants of Nigeria during the session who said that women are emotional leaders or something along those lines?

Nwoye: I replied to him. They are confused between empathy and emotion. Is there a human being that doesn’t have emotions? Men want to be hard characters. But when you are a leader, you can manage materi-als, you can manage money, but you should leave the human beings, you understand. A true leader.

Modise: A true leader also has emotional intelligence. There is emotion. You need to use that to influence others.

Nwoye: Influencing others, motivation of others, inspiring others, you need emotional intelligence. There is emotional intelligence. You know, before the advent of civilization, what men do, is that when they try to put you down, if you have a superior argument, they get physical, intimidating women. That’s what they are doing at home instead of sur-rendering to a superior argument. He doesn’t have any other defense, he just goes physical.

Modise: But I also liked the way you brought the idea that god knew what he was doing when he created the women. That there is

that complementary aspect. Let’s face it, women do make better leaders because of the emotional intelligence aspect.

Nwoye: That’s what I was talking about, leadership style. Women have their own style, men have their own style, and they complement each other.

Adegite: What is your interest in interviewing us women?

IAB: Because this topic is an historic injus-tice.

Adegite: Well summarized. You know, we didn’t bring in the issue of sexual harassment, because we didn’t want the men to get…

Modise: To lose the focus…

Adegite: To get uncomfortable, so we kept quiet.

IAB: But it is an issue we should tackle.

Nwoye: Yeah, we didn’t bring it up but any-time they are traveling men want to take extra handbags… you know what I mean… to travel with, and we don’t talk about it and we just look the other way. [IAB understood that this was a reference to prostitution]

Sometime they will want to treat you the way they treat these women. That’s where the problem comes, because you have given $1 to someone to follow you, and then tomorrow you want to talk to me as if I’m going to fol-low you.

Modise: You know I experienced this in my career. It was the year after we went to Ghana, at a PAFA meeting and I couldn’t believe it. These guys were talking to me as if I’m one of those girls. And I had to put the story straight: I’m a president. I’m your equal where I come from. Treat me the same. Look me as a professional, not as a little girl you can take a look at.

Nwoye: Listen, I was appointed a member of a special committee at the University of Lagos. I was the only woman with 5 men. When we got there, they were given one building, and they gave me another building.

I didn’t know what was happening until three years later, I have since left. I went to a conference in Uganda and a woman recog-nised me and embraced me saying the univer-sity had learned about my action. I had writ-ten a minority report in response to a case of sexual harassment where the vice chancellor sacked the woman.

Ngwenya: You always are the perpetrator rather than the victim.

Nwoye: When there was a petition for that woman, the men conspired where they were eating in their own accommodation. So when I came to the main meeting the following day, they were saying “throw that [report] away”. I said: “No, read it”. I didn’t know they had already reached an agreement in secret. Then I wrote the minority report and they brought the woman back.

Modise: Thanks for your comment on the injustice.

Adegite: You summarized it so beautifully.It’s an historic injustice.<


REGION SURVEY International Accounting BulletinAFRICAN WOMEN IN BUSINESS

“It is our responsibility to influence the politics within

the firms,” Mbili

Cynthia Mbili Tshegofatso Modise (BICA) Olivia Kirtley (IFAC)

551.indd 10 20/07/2015 16:03:49

COUNTRY SURVEYInternational Accounting Bulletin


REGULATION IN AFRICA

Accountancy is not young in Africa, at the time of the colonies young Afri-cans would qualify in Europe or the US, and when the wind of independ-

ence blew through the continent, an African accountancy profession emerged. However each country followed its own pace of devel-opment and today the profession is more structured in some countries then others. As such, some countries have strong profes-sional bodies, while others are in the process of creating one and a few countries have still no professional bodies.

Similarly there’s a disparity in how the profession is regulated across Africa. Only four African regulators have been admitted to the International Forum of Independent Audit Regulators (IFIAR): South Africa, Egypt, Mauritius and Botswana.

This doesn’t mean to say that the other 50 sovereign African states do not have regula-tors. But in those countries the regulator is not considered as independent, as the regula-tory powers sit with the professional body or the country’s government.

For example, the Public Accountants and Auditor Board of Zimbabwe, which regulates the profession, is a statutory body, while the regulatory powers in Uganda sit within the Institute of Certified Public Accountants of Uganda.

In the hour before the ACOA15 concur-rent session on accountancy regulation in Africa took place, three of the panel mem-bers and heads of the regulatory bodies of Uganda, Derick Nkajja, Botswana, Duncan Majinda, and Zimbabwe, Admire Ndurun-duru, joined the head of the South African audit regulator, IRBA, Bernard Agulhas and sister publication The Accountant for a round table discussion on the regulatory challenges on the continent.

In the course of the discussion it became apparent that one of the major challenges for African regulators is to gain independence from the profession, especially the lobby of the Big Four, and from government.

In that sense Majinda explained that from the very beginning when his organisation was created, Botswana’s government made

sure that no practising auditor was sitting on the board. “We introduced a two-year cool-ing off period whereby you can’t sit on the board if you’ve been an auditor in the past two years,” he said.

Similarly, this year for the first time IRBA has appointed a board without any prac-tising registered auditors. “I must say, we have pushed, I personally have pushed, for no auditors on our board because I’ve seen what a difference one auditor on the board can make,” he said, adding that it only takes one auditor on the board for him to be immediately lobbied by the Big Four firms.

“The global networks are organised, believe it or not, not only in countries but internationally,” Agulhas said. “So you only need one auditor on your board to be lob-bied by the global networks, and everything that we discuss gets out to the rest of the profession.”

He said many had questioned this move arguing that auditors had the knowledge to understand the profession best.

However Agulhas said he disagrees with this view, as for him the role of the board is to deal with operational and strategic mat-ters, while the secretariat handles the techni-cal issues.

However he said the board needed audit experience, and in his view having retired auditors on the board did not breach the independence of the regulator. According to him it was only necessary to keep auditors working in public practices off the board “because they can go back to the firm and say this is how IRBA is going to change the inspections process – be ready for it,” he said.

Ndurunduru agreed that it was unaccepta-ble to have professionals making a living off the very same regulation they helped draft. “There is a process called ‘regulatory cap-ture’,” he added. “Where one person coming in from the Big Four is in a position to lobby, but they don’t come in aggressively and they just say: ‘We cannot be doing this; do we need this now? Let’s do a consultation.”

The other three regulators around the table agreed with Ndurunduru saying they

had experienced the same thing in their respective countries. However Nkajja raised the question of funding as another issue for regulators. “How do you get financed if you are to remain independent?” he asked. “You must know where the financing is coming from as the independence of your finance is crucial for the regulators overall independ-ence.”

Ndurunduru suggested that as the auditee is the one benefiting from the audit, a model whereby the auditee is financing the regula-tor and therefore audit quality would be a good solution. Agulhas pointed that it is the case in the US where listed companies are levied to finance the audit regulator.

“But in the US the number of listed com-panies is good enough for that,” Nkajia contended. “But if you combine Uganda and Tanzania’s stock exchanges you don’t reach near halfway of Johannesburg’s stock exchange.”

It might not work in every country to fund the regulator through the listed companies; it might not work everywhere, he concluded.

However Ndurunduru suggested that the model can be refined to an African reality. “You can say for every audit that an audi-tor in Zimbabwe or Uganda signs, there’s a levy on the audit fees,” he said. “It’s not the listed companies’ money; they are just collecting it.” Also he argued there was no issue with independence with this model as although the funds come from the audit firm they are collected by a third party, the listed companies.

Majinda lamented that Botswana explored such a model but the audit firm resisted it and the project went dead. “The problem is when you make a consultation, the audi-tors are key; they’ll go above your head and speak directly with the minister,” he said.

The Big Four are too organised for the nascent African regulators the four men noted sadly.

“But today’s discussion is a starting point, I think it’s the first time that regulators from different countries in Africa sat around a table just sharing issues,” Ndurunduru con-cluded. “Let’s organise ourselves.” <

African regulators face Big Four lobbyingAt the Africa Congress of Accountants (ACOA15) four heads of African regulatory bodies from four countries tell Carlos Martin Tornero and Vincent Huck about the difficulties they face in fostering strong regulatory frameworks independently from audit firms and government’s lobbying

551.indd 11 20/07/2015 16:03:50


If you want to know about the crocodile ask the hippo because they both live in the river, an African idiom goes. As it was said time and time again at the

Africa Congress of Accountants (ACOA15) in every illicit financial transaction there is an accountant that knows, and is either com-plicit or complacent.

With this in mind, one interpretation of this saying could be: if you want to know about corruption, ask the professional accountants.

The issue of corruption in Africa was tackled at ACOA15 by an expert panel of audit firm professionals. And with over 800 accountancy professionals in attendance, one could have expected the discussions to be complicit or complacent. It wasn’t.

Instead ACOA15 penultimate plenary ses-sion entitled Ethics and trust: the war on cor-ruption and illicit financial flows (IFFs) from Africa, was certainly one of the highlights of ACOA15’s agenda.

The panel was chaired by Pan-African Federation of Accountants (PAFA) CEO Vickson Ncube. And the panelists were: Senegalese Aziz Dieye senior partner of his own firm and a founding member of PAFA, PwC Southern Africa deputy CEO Ignatius Sehoole and Afsar Ebrahim deputy group managing partner of BDO in Mauritius, Kenya, Tanzania, Uganda, Madagascar and Seychelles.

“We are here for a fight; I have always said that no one fights something he loves,” Ncube said in the introductory remarks. “For you to fight you must hate; if at the end of today’s session we shall have developed hatred, I shall be a happy man.”

To tackle the issue at hand, Ncube contin-ued, there are no better people than the three panelists, who have in common working for audit firms.

“The ones who know what happens in every transaction will be the auditors, whether they say it or not,” he said before

asking the three panelists for their insights into the matter.

Dieye remarked that corruption is not specific to the audit or accounting profes-sion, but rather endemic to humanity. He noted that the profession’s place is ambigu-ous, because clients have confidence in their accountancy professionals as they have a duty to their clients and therefore often keep their mouth shut.

“But we shouldn’t be short of moral duty,” he said. “In my view the line of defence is in each and every one of us to ask everybody to stop being accomplices of what is wrong.”

What is wrong, Dieye continued, is to see $60bn shoved out of Africa and to see the continent that should be the richest being where you find the highest number of people living in poverty.

Moral crusade For Ebrahim, Africa is first and foremost the victim of a wrong perception. He admit-ted that there is corruption in Africa but the continent is being unfairly penalised with the perception that it is a hotbed of corruption.

“We have all experienced the worst finan-cial crisis in our history; what happened in Europe and the US is due to behaviour and greed and yet everything they did was legal,” he said.

“It has been a total failure of the whole system: regulators, governments, policy-makers, auditors, directors, you name it. And yet nobody is pushing the Europeans to go on a moral crusade.”

Ebrahim said that for him the first line of attack is for the policy-makers to make clear statements of intent.

It is common when arriving at the border control of an African airport to be told that your vaccination card is not valid and you are then faced with the choice of paying $100 or the needle, he said.

When a foreigner is faced with this situ-ation upon arriving in a country, Ebrahim

Role of accountants in illicit financial flowsREGION SURVEY

Contrary to popular belief, Africa loses more resources from the interpretation of corporate regulations than from corruption. At the Africa Congress of Accountants an expert panel questioned whether accountants are part of the problem or the solution. Vincent Huck reports

BDO Mauritius group managing partner Afsar

Ebrahim on the 2008 financial crisis:

“It has been a total failure of the whole system: regulators, governments, auditors...And

yet nobody is pushing the Europeans to go on a moral

crusade.”

551.indd 12 20/07/2015 16:03:55


NEWSILLICIT FINANCIAL FLOWS IN AFRICA REGION SURVEYInternational Accounting Bulletin

argued, his perception is that from then on everything is for sale.

“And unless the head of state come out with clear intent on what they are prepared to accept and what they are not prepared to accept, not much will change,” Ebrahim said before taking the example of Rwanda where the president, Paul Kagame, has made very clear statements on corruption and as a result corruption is very low in the country.

“But you don’t have this across the con-tinent and it creates the strong perception that Africa is for sale, which is wrong,” he concluded. “And I think we all have a duty to challenge that.”

Sehoole started by saying that Ncube had instructed him not to mention statistics. “But we heard the number of people living on $1.25 a day having doubled in the last 20 years,” he said.

“That is not statistics to me. When I walk of the streets of Diepsloot in Jo’burg I see those numbers. When I walk in Mogadishu I see those numbers; when I walk in Maputo I see those numbers. Those are not just fig-ures; those are my brothers and sisters on the continent that suffer on a daily basis.”

Sehoole also lamented that during the three-day congress the focus of the debate had been on the shortage of accountants in Africa’s public sector, but very few had men-tioned the shortage of accountant in the pri-vate sector.

“Now ladies and gentlemen, the $50bn a year of IFFs, more than 65% of it is from the private sector,” he said.

“How angry are we for this Africa? How passionate are we about this continent? Do you think all these corruptors that are sitting in the Western world will come and give [the money] back to you? Go get it! You must fight for your motherland.”

It is about time Africans start showing they are African, he continued. “We must act and stop being cowards, because if we declare war there will be causalities and yes it is true, it might be you, it might be me, but the choice is yours whether you hand over your continent or you reclaim it.”

Corruption: the lesser evilSehoole words were received with cheers by the audience and prompted Ncube to joke that he was now ready to close the session.

However he questioned whether the focus on corruption was right, and referred to the report of the High Level Panel on illicit

financial flows from Africa, commissioned by the African Union entitled Track it! Stop it! Get it!

The report defines IFFs as money illegally earned, transferred or used. And it highlights that these funds typically originate from three sources: commercial activities, criminal activities and corruption.

According to the report and contrary to popular beliefs, large commercial corpora-tions are by far the biggest culprits of illicit outflows. Estimates assess commercial activ-ities as accounting for 65% of IFFs, criminal activities for 30% and corruption for around 5%.

“So IFFs come mainly from the corpo-rates: legitimately earned money, illicitly shoved out of the continent,” Ncube said. “Is it possible that we have spent so much time fighting falling leaves and ignoring the tree that is dropping them?”

Dieye responded that as early as 1989 he had written a paper asking the Senegalese government to put in place a financial free zone to repatriate the wealth of African lead-ers held in bank accounts outside the conti-nent before those leaders pass away and the

money becomes dead. “That is how it is called, dead money or

bien de main morte, and if no one claims it , it will become public money for the country where it lies,” he said.

His idea was to create a short window for repatriation against payment of 1% to 30% so that the money is not lost and can serve the development of the African country it had left in the first place when the leader in question passes away.

“The response from the government was that it is not politically acceptable,” he said.

Amnesty might be a good idea, Ncube retorted, but it doesn’t tackle the root of the issue, which is why this money is leaving the continent in the first place.

Ncube took a strong stance against for-eign partners, taking the example of Zim-babwean gold. He recalled a conversation with a Zimbabwean minister in charge of mines who told him foreign partners would argue that because of international sanctions against Zimbabwe there is a reputational risk to buying Zimbabwean gold.

Therefore the foreign partners offered to buy the gold at 30% of its value. “That

PwC Southern Africa deputy CEO Ignatius

Sehoole:

“What we forget is who we steal the

money from, those faces full of hunger. Maybe if we visualise

them, as we steal, our consciences will

come back.”

551.indd 13 20/07/2015 16:03:58


The plenary session was followed by a Q&A. Below are some of the main points raised during the exchange between the audience and the panel

Unidentified delegate from PwC Mauritius: I’m making no apology for people having corrupt behaviours, but don’t you believe that people will understand ethics when they are fed well, when they are housed adequately and have proper health? Below that poverty line it’s instincts that will kick in.

Former PAFA president and newly appointed Controller and Auditor Gen-eral of Tanzania Mussa Juma Assad: I have three quick points. Africa is essentially a cash economy, and if you run a cash economy it’s difficult to track anything. So in terms of going forward, we need to encourage our governments to operate more in terms of electronics transactions rather than cash.

Second, we need to gain new skills and competencies and especially I’m talking about forensic and investigative techniques. That has to become in my view the bread and butter techniques for all auditors so that they can track and sense when there is something wrong.

Third, a lot of these illicit fund flows end up in Europe and in the US. The issue there is information. How do we know about these flows? If it doesn’t hurt the US and Europe we don’t get to know about it.

So my suggestion is we need to mobilise ourselves in terms of a continent so that we have a voice in the global financial system. So we can know what sort of money sits in what sort of accounts. And if we are at least able to

know, then we can establish mechanisms to repatriate funds. Without infor-mation there’s nothing we can do about it.

Association of National Accountants of Nigeria president Anthony Nzom: There’s one thing we have refused to touch, and that is what a white man called Maslow’s theory of need. Poverty is a function of what we are talking about. The banks we are talking about, they don’t just start transferring money unless somebody tells them to. The leaders, the presidents and the prime ministers, have you looked at their backgrounds, somebody from nowhere becomes the leader of a country. He had nothing, and you think he will not be corrupt?

Botswana Institute of Chartered Accountants past president Tshegofat-so Modise: My passion to Africa in support of my brother there, Ignatius, is to ensure that Africa has a common position against corruption. And by doing that with one voice, we in the room, it starts with us. In our little spaces, in our little employments, we are the gatekeepers.

We account for the finances of the organisations that we are in. Over and above that we hold positions of leadership in our respective little spaces, and therefore we should be exemplary to others. And we should be exem-plary to other professions. To show that this profession stands for some-thing that is very noble and honourable. And poverty should never ever be used as an excuse, otherwise this dream of Africa rising is just a joke.

Sehoole: I grew up in a rural area in South Africa where there was no run-ning water, no electricity. And as kids we were taught that unless you are

Debate from the floor: Open Q&A with ACOA15 delegates

“We have to have our mafia, our bankers, our bandits and our

multinationals to play on the grounds the rest of the world plays on.”

PAFA founding member Aziz Dieye:

COUNTRY SURVEY International Accounting BulletinILLICIT FINANCIAL FLOWS IN AFRICA

means that because there has been a quiet negotiation which depleted the resources, 70% of Zimbabwe’s gold value left the coun-try, legitimately but illicitly,” Ncube said.

Equally Ncube took the example of a corrupt politician who had transferred $1bn from his country to a bank account in Europe. “How can someone do that unno-

ticed; is it an issue of governance?” he asked. Ebrahim responded that the main weak-

ness in Africa regarding legal but illicit trans-fers of money is the banking sector and there-fore the first building block should be rules and regulations; governance is secondary.

“Because money doesn’t transfer in suit-cases anymore, they go through the system

most of the time and you can always trace a transfer,” he said.

“In Africa the system is weak, so it allows the money to go and bringing it back becomes a lot harder. Unless your rules and regulations are increased to a level where there are questions raised every time there are these transfers, money will leave the country.”

For Ebrahim the repatriation of illicit funds is a long-drawn-out battle, but Africa can win the short-term fight by making sure the money remains at home. “Fighting to bring it back are reactive measures; what you need is proactive measures to make sure it doesn’t leave in the first place,” he argued.

Money talks, wealth whispers Dieye lamented that Africa doesn’t have an agenda to do something properly for the continent. He posed the question of the elite saying that today most of the African elite’s children study abroad and therefore think inside the box. “We need people who think outside the box if we want to develop Africa in another man-ner. Africa cannot be developed with other people’s agenda,” he said. “We have to have our mafia, our bankers, our bandits and our multinationals to play on

551.indd 14 20/07/2015 16:04:00

the grounds the rest of the world plays on.”He alluded to the idea that maybe Africa

should have its own safe heavens where wealth can be hidden, rather than see the money leave to bank accounts in European safe heavens.

“Money talks, but wealth whispers, and we don’t have a place to whisper, so we send it abroad,” he said.

“Why don’t we try to think outside the box and try to do something that’s useful for Africa; we should be global players and we are not.”

However Sehoole suggested that African accountants up their ethical game and take the war to the criminals. Accountants come up with all kinds of schemes to make sure they bypass the rules because there is a prom-ise of a suitcase at the end, a suitcase they have not legitimately earned.

“What we forget is who we steal the money from, those faces full of hunger. Maybe if we visualise them as we steal, our consciences will come back,” he said.

“Because right now we are slaves of greed. Nobody needs a billion dollars; you are going to die without ever touching it!”

Why do we need a policeman to do the right thing? he asked. “We are here, it’s our continent. Let’s love it enough to do the right thing without fear or favour.”<


Debate from the floor: Open Q&A with ACOA15 delegatesgiven you never take. We had coffee in the morning and no lunch; on the way back to school we would pass the neighbours’ trees full of beautiful peaches. And we would sit and marvel and talk about it.

Until the granny next door called you to pick up all the peaches and distrib-ute them among the children in the village, you didn’t touch them. That is the African moral that I grew up with and that I know – in the midst of poverty, what happened to us?

Ebrahim: I fully agree, I think this excuse of poverty for corruption just doesn’t stand up. There are a lot of good people; there are high moral val-ues, and there is a high level of spirituality across the continent. I tend to believe there are more good people in Africa than corrupt people. And I think if we got our act together we should be able to win because according to divine law the good people always win.

Unidentified delegate: A lot of time when people judge Africa they look at Africa as one country, but in fact there are 54 of them. Do you think that we’re using the strengths of these 54 countries to tackle the weakness of these 54 countries? Do you think that the profession can encourage the old idea of a United States of Africa?

Unidentified delegate from the Institute of Chartered Accountants of Nigeria: Yes, corruption is a problem but the fight against corruption is not for accountants alone. Let’s walk with other groups. There are engineers,

doctors, lawyers and politicians. Let’s walk with other groups to jointly fight corruption.

Unidentified delegate from Ghana: We need to use this forum as the start-ing point of advocacy. If we finish ACOA, and we don’t put out information to start the process of education then it would have defeated our purpose of being here.

Dieye: My deep conviction is that Africa can do nothing if it doesn’t get united. It’s only with the continent as a whole that we can fight against this. We have to select our leadership in better ways and convince them that the future is in Africa. It’s not in the country of the bank in which they have put their money.

Ebrahim: I think Africa should take its destiny in its own hands, make a clear statement of intent on what they want to tolerate and what they will not tolerate in terms of policy-making. The statement has to come out loud and clear, because it has worked in some countries, and I think if this can spread from Cape to Cairo, we should be able to get results.

Sehoole: Chairman, what I’m asking is who are we? Are we Africans? Are we ready to reclaim our dignity? Are we ready to reclaim our countries, our economies, and our continent? And if we are, we will take personal action as individuals and mobilise as far as we can around us to declare war on illicit transfers and corruption.

PAFA CEO Vickson Ncube holds a copy of the report of the High Level Panel on illicit financial flows, commissioned by

the African Union

“The ones who know what happens in every transaction will be the auditors, whether

they say it or not.”

COUNTRY SURVEYInternational Accounting Bulletin ILLICIT FINANCIAL FLOWS IN AFRICA

551.indd 15 20/07/2015 16:04:02

IAB: There’s been a lot of emphasis on the public sector during the Congress, but if you look at accountants in practice, what is their role?

Institute of Chartered Accountants Malawi president Chiwemi Chihana: If you look at it, it’s the public sector that starts the whole ball rolling. The Congress emphasis on strengthening the processes, the system and the structures in the public sector is because it’s the public sector that is responsible for implementing the policies that we’re talking about. Wealth distribution is in the hands of the public sector. So the issue here is to what extent accountants can direct how the public sector is run.

IAB: We were talking earlier about the crop of accountants that you bring in. But you can educate very ethical and honest accountants, then they go and work for firms which, for example, could be promoting aggressive transfer pricing to their clients. How does that fit in with the debate of ethics and Africa rising?

Botswana Institute of Chartered Accountants past president Tshegofatso Modise: My training ground was one of the Big Four, and in terms of the platform they provide to create that [ethical and honest] accountant I think it’s quite good.

It’s a conducive environment because it’s structured, and there’s a path that you follow while you are doing articles.

The problem starts when the overall responsibility shifts from being an auditor to becoming an accountant, and all of a sud-den he is responsible for the money, if I may put it that way. And that’s when they get tested, whether that ethical DNA is strong or is weak.

And depending on what they choose at a particular point in time, they either become part of the problem, or part of the solution.

So the private sector, and particularly the Big Four, I think they have provided a good training ground over the years, but again it’s not everybody that survives the test. Chihana: I would add it doesn’t matter whether you handle cash or not.

But we as auditors come across transac-tions that spark or smell of something, and there have been cases where the auditor is being corrupted. And because of this train-ing that Tshegofatso is talking about, there have been other cases where the auditor has resisted that carrot, and people have been brought to justice.

So the point is, it’s not a question of han-dling the cash…

Modise: it’s about decision-making.

The South African Institute of Chartered Accountants CEO Terence Nombembe: One of the things we need to do is to have a common definition of what a professional

accountant and a responsible lead-er is. And have that concerted c a m p a i g n t o drive the aware-ne s s o f what defines a respon-sible professional accountant that is a trusted person in business, in government, and

in practice. So that when people see things that are in conflict with that kind of profile, they know how to respond to it.

IAB: You mentioned integration. It seems to happen really with firms. For example, I’ve been told BDO chose Mauritius as the headquarters to service the entire continent. Others pick Nairobi to service the whole of East Africa.

Nombembe: For me the choice of location for any firm is more an issue of economics and demographics. So I wouldn’t pay too much attention to that.

But what’s important is how once you’ve made a choice, you begin to truly demon-strate an honest African integration agenda. Because it’s easy for some firms to operate from Johannesburg; it’s easy for others to operate from Nairobi, Mauritius, etc. But it’s the model used to make sure that you’re integrating the whole professionalisation of

African society in what you’re offering to Africa that is important.

Firms are a very relevant topic because most of the big firms are upholding a very clear position about being African in their identity. But African in their identity is dif-ferent for KPMG, EY, PwC etc, so which one has got the right formula?

I think as PAFA this is where we need to come in and say: your model of African iden-tity, to what extent is it helping the agenda of PAFA.

And we have not, as PAFA, engaged those practitioners in terms of their models of Africanism, and that is the next challenge we need to take as PAFA.

IAB: What do you mean by different African identities; can you give an example of two firms having a different approach?

Nombembe: I was just highlighting the fact that all the major and medium firms have got a strategy of having a presence in Africa. But if you look at their models, they are different in terms of what they do to achieve that goal.

For me the substance of that strategy is the impact that each of the firms is having to uplift the identity of a true accountant in the countries in which they choose to have a presence, and the honesty with which they demonstrate their integration into the Afri-can continent.

I don’t want to point the finger as to which one has got the right model or not, but PAFA has an opportunity to work with the firms to define what is the best model to assist in achieving the agenda of PAFA – which is to grow true accountants in Africa, which is to get the issue of standards to be the backbone of professionalism and transparency and accountability in the continent.

PAFA is not engaged; this is a topical sub-ject for PAFA to start engaging these firms. Because they are all going in different direc-tions and in the process Africa is losing it. <

Nombembe, Chihana, Modise and Institute of Chartered Accountants Malawi CEO Eve-lyn Mwapasa were talking as part of a round table organised by sister publication The Accountant on corruption and illicit finan-cial outflows in Africa

COUNTRY SURVEY International Accounting Bulletin


FIRMS AFRICAN INTEGRATION

Drive to create the true practitioner

Following the plenary session on corruption and IFFs four heads of three Southern African professional bodies tell Vincent Huck how they see the role of accounting firms in the African context.

SAICA CEO Terence Nombembe

551.indd 16 20/07/2015 16:04:04

According to the African Economic Outlook 2015, Africa’s GDP growth is expected to strengthen to 4.5% in 2015 and 5% in 2016 after a slow-

down in 2013 (3.5%) and 2014 (3.9%). The dip in growth was due to slowing economies in some African countries due to severe domestic problems such as political instabil-ity and the Ebola virus outbreak.

However, as the world economy is improv-ing and if the African Economic Outlook 2015 predictions are right, Africa will soon be closing in on the impressive growth lev-els seen before the 2008/09 global economic crisis.

EY West Africa senior manager Opeyemi Joseph Owolabi says the optimism of the outlook is felt in the day-to-day dealings of his firm. “Generally speaking, compared to other parts of the world, like Europe where the recession is still strong, Africa is experi-encing very good growth in the last 10 to 20 years,” he says. “Investors are looking to put their money into Africa, as it appears that the opportunities are tremendous.”

Nevertheless Owolabi says there are still some issues causing concern. He cites the examples of the political instability in some of the central African states, the slowing economy in key economies such as South Africa and a more pronounced form of terrorism in places like Nigeria and Chad which have to deal with Boko Haram, and Kenya and the horn of Africa which faces the threat of Al Shabaab.

“These are sources of concern and also corruption. There is still poor corporate governance in most of these countries,” Owolabi says. “Apart from Jo’burg stock exchange there are probably very few stock exchanges that have come out with strong rules and regulations in addressing corrup-tion and addressing corporate governance issues.”

His thoughts match the African Economic Outlook 2015 findings, which concluded that the business environment has improved but there’s still a long way to go. “The busi-ness environment has improved markedly in countries that needed it the most. Sub-Saharan Africa remains the region with the most difficult business environment, but it is also the region making the most progress,

accounting for one in every three regulatory reforms worldwide,” the report reads. “The ten countries that most improved their busi-ness environment from June 2013 to June 2014 include five African countries that were in the bottom quintile globally for ease of doing business: Benin, Côte d’Ivoire, the Democratic Republic of the Congo, Sen-egal and Togo. The fact that these countries remain in the bottom quintile, however, indi-cates that further efforts are needed.”

With regards to public sector manage-ment, the report found that not much improvement had been made. “There has been some progress in specific areas, espe-cially equity in the use of public resources, statistical capacities and public administra-tion,” the report reads. “The outbreak of the Ebola virus in Guinea, Liberia and Sierra Leone highlighted the fragility of health systems, although it also demonstrated the importance of a committed leadership at the community level.”

In a nutshell, Owolabi summarises, there are causes of worries for investors, but the economic outlook looks bright. “And the issues I’ve mentioned are being dealt with by the respective government.”

In this environment he believes account-ing firms such as EY will have tremendous opportunities for growth. “For the big firms the opportunities lie beyond audit,” Owola-bi says. “The Big Four have been known as audit firms, but I think that all of them, even the top 10 firms, are focusing on areas to add value to their clients; audit is a bit restrictive. But in helping with performance improvement and transaction advisory ser-vices, and tax, you help the cli-ents gain value and grow.”

As such he says EY and other firms are investing to strength-en their audit procedures and methodology, but are also building competences in other areas to ensure that they can grow their practice.

Asked what’s the role of accountancy firms in the con-text of African development, Owolabi replies that they have different roles to play. “First they are seen as thought

leaders so they kick-start the dialogue or draw attention to particular issues, for example corruption,” he says. “A number of firms do surveys that are very useful for politicians and journalists, so they have to invest in thought leadership, and come up with information on the situation.”

But rather than just being passive they should play an active role by engaging with politicians and leaders, he says. “As part of their advisory services they should make a stand and tackle the issue of clients whose actions are dubious. Some firms do work in this space, but they need to be more proac-tive. They need to take a stand and it is dif-ficult because it might impact on the client base.”

He is confident that as firms define their values, they will come up with strategies to push for more economic development meas-ures in the market.

Equally as the continent experiences an increase in foreign direct investments, Owolabi says that governments are moving to more democracy and transparency fol-lowing the demand of investors.

“We do have scandals and malpractices which make regulators go back to the draw-ing board,” he admits. “But as a continent we are moving towards more accountability and more transparency. International Pub-lic Sector Accounting Standards have been adopted across the continent, and from pri-vate sector to public sector, governments are looking at ways to strengthen governance and transparency.”

He concludes: “The best years are here for us.” <



AFRICA

Land of plenty

■ AFRICA’S GROWTH BY REGION, 2013-2016

Real GDP Growth in %

2013 2014 (e) 2015 (p) 2016 (p)

Africa 3.5 3.9 4.5 5.0

East Africa 4.7 7.1 5.6 6.7

West Africa 5.7 6.0 5.0 6.1

Central Africa 4.1 5.6 5.5 5.8

North Africa 1.6 1.7 4.5 4.4

Southern Africa 3.6 2.7 3.1 3.5

Notes: (e) estimates, (p)projectionsSource: African Economic Outlook

Despite causes for worry the economic outlook is bright as African economies continue to grow and the push for transparency is going strong. Vincent Huck reports

551.indd 17 20/07/2015 16:04:04

REGION SURVEY International Accounting Bulletin


AFRICA RANKINGS

■ AFRICA

NETWORKS – FEE DATA

Rank NameFee income

($m)Growth

rate (%)

Fee split (%)

Year—endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance

Corporate Recovery/ Insolvency

Litigation Support Other

1 PwC* 792.9 7% 50 16 33 — — — 1 Jun—14

2 Deloitte* (e) 687.0 -3% — — — — — — — May—14

3 KPMG* 622.7 4% — — — — — — — Sep—14

4 EY* (1) 447.3 7% 52 18 24 6 — — — Jun—14

5 Grant Thornton* 110.7 6% 53 9 20 — — — 18 Sep—14

6 BDO* 97.8 5% 62 12 — — — — 26 Sep—14

7 Mazars* (2) 85.7 8% 93 7 — — — — — Aug—14

8 PKF International* 68.5 1% 75 12 12 — — — 1 Jun—14

9 RSM International (3) 37.6 23% 61 15 18 — — — 6 Dec—14

10 Kreston International* 35.4 -1% 82 6 2 1 1 — 8 Oct—14

11 Baker Tilly International* 34.6 4% 78 10 4 1 — 1 6 Dec—14

12 Nexia International* 33.7 1% 61 18 12 1 — 1 6 Jun—14

13 Moore Stephens International* 29.2 11% 60 11 11 3 1 1 1 Dec—14

14 SANTA FE ASSOCIATES* 24.5 17% 86 0 14 — — — — Dec—14

15 Crowe Horwath International* 23.7 21% 62 14 10 1 — 3 10 Dec—14

16 HLB Africa* 17.2 -16% 61 16 11 3 1 1 7 Dec—14

17 UHY International* 7.6 -3% 61 18 10 1 1 1 9 Dec—14

18 ECOVIS International* 2.0 366% 66 10 19 — — — 5 Dec—14

19 Reanda International* 0.2 10% 57 8 28 — 7 — — Dec—14

Total revenue/growth 3,158.3 4%

Notes: (e) International Accounting Bulletin estimate. (1) Due to the devaluation of the Rand against the USD, EY have used the Global Constant USD rate for FY14, and as such restated FY13’s numbers to reflect the same. (2) Mazars have restated their FY13 fee income using a different exchange rate, have they used figures reported last year their growth rate would be 9%. (3) RSM International revenue includes $9.7m from correspondent and non—exclusive member firms. *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non—exclusive member firms is not included.

Source: International Accounting Bulletin

■ AFRICA

ASSOCIATIONS – FEE DATA

Rank Fee income

($m)Growth

rate (%)

Fee split (%)

Year-endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance



1 Praxity* 91.0 8% 92 7 1 — — — — N/A

2 Morison International* 56.9 -6% 87 8 — — — 5 — Dec-14

3 MSI Global Alliance* 12.4 -20% 68 13 6 3 — 1 9 Dec-14

4 MGI* 9.6 -11% — — — — — — — Jun-14

5 PrimeGlobal* 9.4 -29% 62 17 9 5 1 — 6 May-14

6 GMN International* 6.3 -6% 51 25 10 — — — 14 Sep-14

7 IAPA* 6.0 -24% 39 21 8 — — — 32 Dec-14

8 Integra International* 5.1 31% 65 25 10 — — — — Dec-14

9 INPACT* 4.1 42% 75 8 3 1 — 2 11 Dec-13

10 EuraAudit International* 3.8 -19% 68 12 12 — — — 8 Dec-14

11 CPA Associates International* (1) 2.2 -4% 44 16 33 — 1 1 5 Dec-14

12 Abacus Worldwide* 0.2 — 59 7 25 5 — — 4 Dec-14

Total revenue/growth 207.2 -3%

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) CPAAI’s 2013 has been restated due to more member firms participating in this survey.

Source: International Accounting Bulletin.

551.indd 18 20/07/2015 16:04:05

REGION SURVEYInternational Accounting Bulletin


AFRICA RANKINGS

■ AFRICA

ASSOCIATIONS - STAFF DATA

Rank Name

Total staff Growth rate (%)

Partners Professional staff Administrative staff Offices

2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

1 Praxity* 2,418 2,237 8% 124 112 1,917 1,729 377 396 48 41

2 Morison International* 1,200 1,141 5% 66 73 966 903 168 165 20 21

3 PrimeGlobal* 555 602 -8% 65 56 364 402 126 144 33 34

4 MGI* 372 392 -5% 37 38 335 341 16 16

5 MSI Global Alliance* 367 373 -2% 37 36 251 257 79 80 14 13

6 Integra International* 259 173 50% 20 9 160 126 79 38 8 5

7 GMN International* 239 235 2% 26 24 146 166 67 45 18 18

8 IAPA* 226 240 -6% 21 23 78 65 127 130 10 8

9 EuraAudit International* 198 192 3% 39 40 120 115 39 37 16 16

10 INPACT* 188 162 16% 25 18 139 122 24 22 14 16

11 CPA Associates International* (1) 93 90 3% 13 13 62 59 18 18 9 9

12 Abacus Worldwide* 15 — — 2 — 4 — 9 — 3 —

Totals 6,130 5,837 5% 475 442 4,542 4,285 1,113 1,075 209 197

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) CPAAI’s figures for 2013 has been restated due to more member firms participating in this survey.


■ AFRICA

NETWORKS – STAFF DATA

Rank Name



2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

1 PwC* (1) 9,074 8,715 4% 424 408 6,872.0 6608 1,778.0 1,699 — 66

2 KPMG* 8,493 8,045 6% 423 429 6,681 6,212 1,389 1,404 33 33

3 Deloitte* (e) 6,365 6,562 -3% — — — — — — — —

4 EY* 5,789 5,423 7% 282 280 4,531 4,250 976 893 48 45

5 BDO* 2,340 2,121 10% 143 132 1,833 1,635 364 354 42 34

6 Grant Thornton* 2,299 2,209 4% 191 196 1646 1466 462 547 35 37

7 Mazars* 2,256 2,071 9% 114 103 1,797 1,607 345 362 43 N/A

8 PKF International* 1,786 1,720 4% 150 116 1,278 1,211 358 393 38 36

9 SANTA FE ASSOCIATES* 1,400 1,040 35% 260 200 935 680 205 160 19 19

10 RSM International 1,123 882 27% 96 72 815 671 212 139 39 29

11 Nexia International* 1,076 899 20% 87 82 763 609 226 208 42 34

12 Baker Tilly International* 995 1,016 -2% 71 83 665 677 259 256 25 30

13 Moore Stephens International* 946 800 18% 84 68 686 595 176 137 32 25

14 Kreston International* 939 947 -1% 72 74 747 723 120 150 32 34

15 HLB Africa* 713 633 13% 63 52 486 449 164 132 30 24

16 Crowe Horwath International 667 586 14% 70 64 455 404 142 118 24 22

17 UHY International* 258 248 4% 39 37 153 147 66 64 20 20

18 ECOVIS International* 50 16 213% 8 5 33 6 9 5 3 1

19 Reanda International* 13 12 8% 2 2 9 8 2 2 1 1

Totals 46,582 43,945 6% 2,579 2,403 30,385 27,958 7,253 7,023 506 490

Notes: (1) Data from IAB World Survey *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. Source: International Accounting Bulletin.

551.indd 19 20/07/2015 16:04:06

More than a region, Asia-Pacific could be described as a world on its own. The diversity of geogra-phy, history, culture, languages and

religions, combined with economic markets’s disparity in maturity and complexity make it almost impossible to attempt a general analysis of market trends in the region.

However no matter it size and diversity, Asia-Pacific is dominated by specific markets whose economic health has a snowball effect on the rest of the region. It is particularly the case of one of the world’s giants, China.

As Crowe Horwath International regional executive director for Asia-Pacific Yuen Lok explains: “When China sneezes everybody catches a cold.”

Like Crowe Horwath, for most firms in the region, China is the most important mar-ket. While China’s economy hasn’t enjoyed the level of growth in the last year as in previous years, the Middle Kingdom’s

growth is still way ahead of most western economies with a GDP growing at around 7% per annum.

As revealed in International Account-ing Bulletin’s China Survey, in the last year international regulatory stand-offs between Chinese and US regulators, national reforms, and economic slowdown were the ingredi-ents of a challenging and dynamic Chinese market where firms had to tread with care.

Morison International Asia Pacific chair Paul Wan confirms that despite slow growth the volume of business is still high in China. At HLB International, head of business channel development Coco Liu shares a sim-ilar picture saying that the Chinese govern-ment’s encouragement for further developing indigenous firms is a source of opportunities for the network’s Chinese member.

While all interviewed firm leaders agree that China is the most important market in the region, they do not share the same

consensus as to which economy is the second most important for their firm. And at HLB International, Liu tempers the importance of China for the region. “I think China is a buzzword; everybody is talking about it, but our existing biggest deals are actually non-Chinese at the moment,” she says.

At Crowe Horwath International, Lok says that the second most important mar-ket for the network is Australia. However, he describes the past year as boring for the international network in Asia-Pacific. On one hand Crowe Horwath is still sharing its Chinese member with RSM, and on the other hand the Crowe Horwath Australian firm has undergone a major restructuring.

“The firm in Australia was a publicly list-ed company ,” he explains. “In 2014 there was a change of ownership as the Findex Group, a wealth management group, bought the shares and privatised the firm.”

The delisting and restructuring of the firm

Islands of growth No matter how large and wide Asia Pacific is as a region, in today’s business world, the region is dominated by several economic hubs, for firms success means safely navigating between these islands of growth, Vincent Huck reports



ASIA PACIFIC

551.indd 20 20/07/2015 16:04:25

took six months to complete, Lok reveals, a period in which the firm was vulnerable and many competitors tried to poach it, accord-ing to him. “The firm was finding its way in the last year as it was adjusting to the new owners,” Lok says. “So it was a bit of a bor-ing year because both our biggest members, China and Australia, were in a bit of a pre-carious position.”

IndiaFor Wan at Morison International, the sec-ond country after China to show positive sign of growth is India as the result of the new government’s increased efforts to open the door to foreign investors. Not only is there more investments going into India, he says, but Indian companies are also looking to move oversees, generating new opportuni-ties for firms.

Geoff Wilson, chief operating officer, Asia-Pacific at KPMG shares a similar analysis even though he notes that technically India is not considered as Asia-Pacific for KPMG.

“Because of the change of government in India, you’re seeing trade flows, significant investments coming from South Korea and Japan into India,” he says. “As well as very strong trade flows between India and South-east Asia.”

However these views differ from Lok’s, who says that for him India is the most challenging country in the region. “India is a whole continent, there are so many lan-guages, cultures and idiosyncrasies there,” he says. “So it’s always a challenge to try and build a united large representation in India.”

Even though his network added a firm in India he says he is still not happy with the representation and size of Crowe Horwath there.

A new Asian giant?A sub region which all interviewed firm lead-ers agree will be worth keeping an eye on is Southeast Asia and particularly the Associa-tion of Southeast Asian Nations (ASEAN) community. The ASEAN community was

first formed in 1967 by Indonesia, Malay-sia, the Philippines, Singapore and Thailand. Forty years later after having integrated Bru-nei, Cambodia, Laos, Myanmar, and Viet-nam, the ASEAN leaders agreed on a blue-print for further integration to establish the ASEAN Economic Community by 2015.

With a population of more than 625m as of 2014, the ASEAN community has been reporting a combined GDP growth of over 5% year-on-year since 2010.

“With the formation of the ASEAN Eco-nomic Community later this year, we’ve been working to align our business to be a clear choice for our clients in ASEAN,” says KPMG’s Wilson, before adding that one still has to see to what extent the community will get formalised.

“We’re seeing a level of cooperation and coordination between the governments of Southeast Asia that we haven’t seen before,” he says. “Right now we are seeing global and foreign investments coming into South-east Asia at, or slightly above, the level of

REGION SURVEYInternational Accounting Bulletin


ASIA PACIFIC

■ ASIA-PACIFIC

NETWORKS – FEE DATA

Rank NameFee income

($m)Growth

rate (%)

Fee split (%)

Year-endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance



1 PwC* (1) 5,454.0 2% — — — — — — — Jun-14

2 Delitte* (1) 4,800.0 -2% — — — — — — — May-13

3 EY* (1) 4,000.0 -3% — — — — — — — Jun-13

4 KPMG* 3,860.0 -1% 50 19 — — — — — Sep-14

5 BDO* 1,056.1 -4% 63 15 — — — — 22 Sep-14

6 Crowe Horwath International* 764.5 2% 60 10 15 2 — — 13 Dec-14

7 Baker Tilly International* 751.7 14% 52 17 12 3 5 — 11 Jun-14

8 RSM International* 600.8 9% 70 8 18 — — — 4 Dec-14

9 Grant Thornton International* 583.4 3% 50 21 20 — — — 9 Sep-14

10 Moore Stephens International* 477.8 -2% 68 10 4 2 1 — 15 Dec-14

11 Kreston International* 415.6 14% 42 18 13 1 6 — 20 Oct-14

12 Nexia International* 308.3 29% 62 21 8 — 1 1 7 Jun-14

13 HLB International* 299.0 16% 61 9 6 1 3 — 20 Dec-14

14 PKF International* (2) 145.6 N/A 62 12 9 3 7 1 6 Jun-14

15 Reanda International 134.7 19% 61 10 8 0 3 0 18 Dec-14

16 UHY International* 93.0 -8% 67 14 9 1 1 1 8 Dec-14

17 Mazars* 76.9 -11% 89 11 — — — — 0 Aug-14

18 Santa Fe Associates* 54.6 90% 43 22 35 — — — — Dec-14

19 ECOVIS International* 45.6 5% 59 27 11 1 — — 2 Dec-14

20 Russell Bedford International* 45.0 -13% 72 14 3 — — — 11 Jun-14

Total revenue/growth 23,966.5 1%

Notes: (1) Data from IAB World Survey . (2) PKF International did not provide FY13 information. *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included

Source: International Accounting Bulletin

551.indd 21 20/07/2015 16:04:35

foreign investments going into China. That’s definitely a place to watch, seeing those countries grow, and I suspect it will continue for some time.

At HLB International, Liu says the net-work’s member firms are among the top five to top eight firms in the respective ASEAN countries, positioning themselves as alterna-tives to the Big Four.

“We have set up a Japan desk in Vietnam, because Japan is one of the biggest investors in the ASEAN countries,” she says. “We see China and Japan competing with each other to be the biggest investors in the region, so we’re also looking at opening a Japan desk in Indonesia and setting up a China desk in different key countries as well.”

Lok at Crowe Horwath International says that member firms in the ASEAN countries are all reporting around 15% growth, and he points at cross-border opportunities as a source for growth. Like Liu of HLB Interna-tional he says he sees a lot of work coming from China to the region. “With China tak-ing the lead in the region a lot of the firms are getting their revenues stream coming from cross-border businesses,” he explains.

Among the ASEAN countries, Wan at Morison International highlights Vietnam as a country to watch. “The country that has been trying very hard is Vietnam,” he says. “Vietnam has been trying to be a substi-tute to China, because in China the costs of manufacturing have gone up; we are seeing

some sort of flow of the heavy manufacturing bases to Vietnam.”

The problem, Wan points, is that Viet-nam’s economy has not been open for many years and it is still very bureaucratic. “As a result things don’t move fast, but it has very good potential,” he says.

Another country which has faced many years of isolation and is now opening up is Myanmar. As revealed last year by Interna-tional Accounting Bulletin in a report into

the country, following Myanmar’s 2010 general election, the first in 20 years, the country has seen an influx of foreign busi-nesses, quickly followed by the accounting profession.

However the challenges are still tremen-dous. “There’s a lot of interest to get in, but it faces a few problems. Basically they are not ready after being under the military regime for so many years,” Wan says. “When you open up the country the basics of FDI protec-tion are not there yet and they still face some sanction, although most western countries have removed them.”

Singapore versus Hong KongAlso an ASEAN member, Singapore, despite its micro size, is one of the big players in the region. As revealed earlier this year in Inter-national Accounting Bulletin’s Singapore survey, in the past four decades the country has become a true success story, if not in its democracy at least in its economy. From a low-income country in 1963, when it gained independence from the UK, Singapore has become a high-income economy with a gross national income of $47,210 per capita in 2012.



ASIA PACIFIC

■ ASIA-PACIFIC

ASSOCIATIONS – FEE DATA

Rank Fee income

($m)Growth

rate (%)

Fee split (%)

Year-endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance



1 Praxity* (1) 365.5 4% 78 7 5 1 1 — 8 N/A

2 AGN International* (2) 147.0 7% 42 25 9 3 21 — — Mar-14

3 DFK International* 132.7 0% 55 25 14 2 1 1 2 Sep-13

4 Morison International* 127.8 -3% 68 11 12 5 — 2 3 Dec-14

5 PrimeGlobal* 99.7 -30% 62 22 8 2 1 1 4 May-15

6 CPAAI* 69.1 3% — — — — — — — Dec-14

7 MSI GLobal Alliance* 69.0 -1% 58 30 1 1 1 1 9 Dec-14

8 KS International* 65.9 -12% 62 15 13 3 — 8 Dec-13

9 Integra International* 61.2 -2% 60 25 15 — — — — Dec-14

10 IAPA* 58.8 -4% 55 21 9 — 1 — 14 N/A

11 MGI* 58.6 -16% — — — — — — — Jun-14

12 INPACT* 48.0 15% 54 26 10 1 1 1 7 Dec-14

13 GMN International* 34.8 -13% 41 38 13 2 2 4 Sep-14

14 ANTEA* 12.1 24% 72 16 7 — 4 1 — Dec-14

15 Abacus Worldwide* 2.8 87% 29 20 8 16 8 5 14 Dec-14

16 EuraAudit International* 2.4 34% 80 9 1 2 0 0 9 Dec-14

Total revenue/growth 1,355.5 -3%

Notes: (1) Praxity restated its information for FY13 due to some countries not being included in the survey last year. (2) AGN International has changed its year-end and basis for measuring member’s revenue and headcount; as such the fee income figure for 2013 has been revised*Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included.


“When China sneezes everybody catches a

cold,”Crowe Horwath International’s Yuen Lok

551.indd 22 20/07/2015 16:04:36



ASIA PACIFIC REGION SURVEY

ASSOCIATIONS - STAFF DATA

Rank Name



2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

1 Praxity* (3) 7,419 7,365 1% 358 327 6,242 6,293 819 745 82 78

2 AGN International* (4) 3,650 — — 249 — 3,401 — — — 73 70

3 Morison International* 2,793 2,516 11% 225 183 2,151 1,967 417 366 53 62

4 PrimeGlobal* 2,704 3,364 -20% 267 325 1,601 2,220 836 819 107 107

5 DFK International* 2,339 2,914 -20% 194 187 1,766 2,270 379 457 76 68

6 MSI GLobal Alliance* 1,558 1,438 8% 113 98 1,126 1,031 319 309 26 25

7 KS International* 1,549 1,652 -6% 144 142 1,203 1,185 202 325 69 70

8 INPACT* 1,349 1,528 -12% 140 141 1,084 1,267 125 120 58 60

9 MGI* 1,309 1,146 14% 139 136 1,170 1,010 - - 51 56

10 Integra International* 1,076 990 9% 78 65 853 806 145 119 43 46

11 IAPA* 1,057 1,168 -10% 107 128 493 556 457 484 35 34

12 GMN International* 734 813 -10% 66 73 552 632 116 108 31 39

13 ANTEA* 329 324 2% 28 25 242 233 59 60 17 16

14 EuraAudit International* 242 305 -21% 23 16 183 262 36 27 24 20

15 Abacus Worldwide* 94 91 3% 12 10 50 32 32 49 5 4

16 CPAAI*(5) — — — — — — — — — — —

Totals 28,202 25,614 10% 2,143 1,856 22,117 19,764 3,942 3,988 750 755

Notes: (1) Data from IAB World Survey (2) PKF International didn’t provide FY13 information. (3) Praxity restated its information for FY13 due to some countries not being included in the survey last year. (4) AGN International has changed its year-end and basis for measuring member’s revenue and headcount. Accordingly 2013 headcount is not available. (5) At the time of publication CPAAI’s staff data was not avalaible. *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included.


■ ASIA PACIFIC

NETWORKS – STAFF DATA

Rank Name



2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

1 PwC (1) 50,337 46,624 8% — — — — — — — —

2 deloitte (1) 42,819 41,125 4% — — — — — — — —

3 EY* (1) 39,317 29,893 32% — — — — — — — —

4 KPMG* 32,867 32,042 3% 2,127 2,080 25,740 25,227 5,000 4,735 N/A N/A

5 BDO* 14,753 13,976 6% 851 842 12,262 11,806 1,640 1,328 104 129

6 RSM International* 11,472 10,090 14% 526 476 9,414 8,109 1,532 1,505 131 115

7 Crowe Horwath International* 11,115 10,849 2% 792 667 8,912 8,818 1,411 1,364 238 237

8 Grant Thornton* 9,122 8,339 9% 611 554 7,437 6,589 1,074 1,196 80 75

9 Moore Stephens International* 8,993 9,328 -4% 437 460 6,908 6,978 1,648 1,890 115 120

10 Baker Tilly International* 7,570 7,384 3% 369 390 6,353 6,165 848 829 85 87

11 Kreston International* 7,083 6,645 7% 407 367 5,738 5,354 938 924 134 133

12 HLB International* 6,673 5,980 12% 436 416 5,022 4,871 1,215 693 106 84

13 Nexia International* 4,909 4,558 8% 341 347 3,617 3,455 951 756 91 89

14 PKF International* (2) 3,311 — — 308 — 2,067 — 411 — 31 —

15 UHY International* 2,389 2,349 2% 185 187 1,934 1,914 270 248 63 59

16 Reanda International* 2,344 1,700 38% 115 88 2,001 1,408 228 204 59 47

17 Mazars* 1,937 2,272 -15% 67 71 1,648 1,962 222 239 24 21

18 Russell Bedford International* 1,269 1,303 -3% 112 118 981 996 176 189 42 42

19 ECOVIS International* 847 753 12% 91 79 644 559 112 115 35 33

20 Santa Fe Associates* 143 104 38% 23 20 100 74 20 10 5 5

Totals 259,270 235,314 10% 7,798 7,162 100,778 94,285 17,696 16,225 1,343 1,276

551.indd 23 20/07/2015 16:04:37

Singapore’s GDP has grown on average by 7.7% annually since independence. And in the first 25 years annual growth topped 9.2%, according to the World Bank.

The World Bank says today Singapore provides the world’s most business-friendly regulatory environment for local entrepre-neurs and is ranked among the world’s most competitive economies. And the country has topped the World Bank ranking of ease of doing business since 2007.

Southeast Asian hubSingapore has openly stated that it wants to become the Southeast Asian hub of account-ancy and has a clear plan to achieve this by 2020.

In the past three years this plan has encountered a lot of success, so much so that Singapore and Hong Kong are now competing to be the location of choice for businesses’ bases in the region.

Both jurisdictions share similarities in terms of size, qualified staff, level of Eng-lish, work ethic, however, according to Liu each still has its own strengths.

“It’s based on the investors’ perceptions,” she explains. “Hong Kong is more used as a gateway for businesses looking at Greater China and North Asia, while Singapore is better accepted as the gateway for South-east Asia because of its geographic location and the cultural background.”

As such, she says, HLB International member firms in Hong Kong and Singapore have slightly different strategies.

“In Hong Kong our focus is more on the capital market side because we are current-ly the sixth-largest firm there and we are auditing more than 100 listed companies on the Hong Kong stock exchange; Singapore doesn’t have this at the moment.” Liu says.

Hong Kong is also where KPMG has cho-sen to open its first Asian data analytics-focused insight centre.

The concept of the insights centre is to create a co-working space where KPMG staff and employees of clients and potential clients can have face-to-face meetings and collaborate to derive meaning from data.

At the end of 2014, KPMG announced it would open four such centres, in London, New York, Frankfurt and Hong Kong. The centre in Frankfurt was the first to be launched, and Hong Kong will follow suit, as soon as August this year, Wilson expects.

Strengthened regulatory requirementsInterviewed firm leaders agree that the region is undergoing great changes in terms of regulation, be it in China where the gov-ernment is looking at boosting indigenous firms’ capacity, or in India where the incom-ing government is pushing through corporate governance reforms.

For some this increased compliance requirements and hence increase in cost might be a challenge, especially at the lower end of the market.

“The region is still catching up with, say, the West in terms of professional reviews,” Wan says. “Most countries have set up their regulatory reviews on CPAs and most firms are feeling the heat in Asia in terms of the

strict regulatory review of firms. So we are seeing a lot of Asian firms dropping out of


■ ASIA-PACIFIC

FIRM MOVEMENTS

NETWORK/ASSOCIATION FIRM ADDITIONS, MERGERS & ACQUISITIONS

Abacus Worldwide Added: Hi Fidelity Solutions (Bangalore, India); KAP Teghu Heru & Rekan (Jakarta, Indonesia)

Lost: KAP Gatot Permadi Azwir & Abimail (Jakarta, Indonesia)

AGN INTERNATIONAL Added: GMJ & Co (Mumbai, India)

Lost: Arora & Bansal (New Delhi, India)

Baker Tilly International Merger: Baker Tilly Japan with Daido Audit Corporation (Osaka, Japan)

Lost: Intercontinental Trust - Seychelles Kasumigaseki Audit Corporation, (Tokyo - Japan)

Added: Nihombashi Corporation (Tokyo, Japan)

BDO Mergers: KPMG Sunshine Coast joined BDO Australia (Maroochydore); Remunerations services division of Reditus Group Pty Ltd acquired by BDO Australia (Brisbane); PKF Ross Melville merged with BDO Auckland (Auckland, East Tamaki, Takapuna), ReSolve Accountants merged with BDO Rotorua (Rotorua, new Zeland) and Kennedy Allbon Tane merged with BDO Bay of Islands (Whangarei, New Zealand)

Added: BDO Ebrahim & Co (Kabul), Afghanistan), BDO Bangladesh (formerly Nurul Faruk Hasan & Co) (Dhaka), BDO Fiji (formerly G Lal & Co) (Suva, Lautoka), BDO French Polynesia (formerly FITEC) (Papeete), BDO (Vientiane,Laos), BDO Myanmar (formerly JF Group) (Yangon)

Crowe Horwath International

Merger: Horwath Choongjung merged with Hanul Accounting Corporation (Seoul, Korea) and renamed as Hunul Choongjung

Added: SF Consulting (Jakarta, Indonesia), LeapRidge Advisors (Mylapore, India)

DFK International Added: Koehler Group (Hong Kong)

ECOVIS International Added: ECOVIS Accounting Accuracy Co.(Bangkok, Thailand), ECOVIS A.A.C Audit Corporation Co. (Bangkok, Thailand)

GMN International Lost: Bray Chan (Adelaide, Australia), Klako Group (Kowloon, Hong Kong), Heng Lee Seng (Singapore), Merrotts (Brisbane, Australia)

Grant Thornton International Limited

Added: Nihombashi Corporation (Baker Tilly, Japan), KPMG (Australia), Nexia ACPA (Vietnam), MM Logistics (Thailand), Berger Paints (Thailand), Henan Kaiqiao CPA (China), e-Bridge (Taiwan, Afghanistan, Cambodia, Laos, Myanmar, Pakistan and Vietnam)

Lost: (Vietnam)

HLB International Added: Roy Varghese and Associates (Trivandrum, India)

IAPA Added: S.R. Dinodia (Delhi - India)

INPACT Added: Commercial Associates (Sydney, Australia)

Lost: Ong & Co. (Philippines) AIC Tax & Co (Osaka- Japan)

Integra International Added: Desai Saksena (Mumbai, India); B. Purushottam & Co (Chennai, India)

REGION SURVEY International Accounting BulletinASIA PACIFIC

“Even though China is the top two economy, the world is not China

yet, The world is global so you need gloabl skills, language skills, technical

skills, global appeal, global citizens,”Crowe Horwath International’s Yuen Lok

551.indd 24 20/07/2015 16:04:37

the market and we foresee that this will cre-ate more consolidation in the future.”

Wilson believes that this trend is a global one and while he agrees it is difficult for the smaller practices to make the necessary investments, he doesn’t see them dropping out the market.

“The market is very broad so there are opportunities for smaller firms as well,” Wil-son says. “But being part of the Big Four we are in the fortunate position of having the ability to invest.”

Double-digit growthPast investments have paid off for KPMG, Wilson continues. According to him the network has seen double digit-growth in its tax businesses and in management consult-

ing, two areas of particular focus in the past years.

“Going forward, we look for organic and inorganic growth to fuel our growth,” he says.

For him if the region was to be summa-rised in a nutshell it would be as follow: “The main drivers are regulatory change, phenom-enal transition that’s happening in Southeast Asia, and the continuing economic reform and ongoing high growth rate in China.”

Asia’s sustained advance might have slow-down in the last year, but observers and stakeholders are under no illusion that the region remains the fastest-growing in the world thanks to specific economies, islands of growth, between which accounting firms have to navigate. <

■ ASIA-PACIFIC

FIRM MOVEMENTS

NETWORK/ASSOCIATION FIRM ADDITIONS, MERGERS & ACQUISITIONS

Kreston International Added: MK Dandeker (Chennai, India), Eurasian Financial Service (Almaty, Kazakhstan), Ansar Accountants (Bishkek, Kyrgystan), Ningxia Tianhwa Certified Public Accountants Firm (Ningxia, China), Shenzhen Yida Certified Public Accountants (Shenzhen, china), Ark & Co (Tokyo, Japan)

Lost: 2 ACA Vietnam, PAS Thailand, Finaudit Kazakhstan

Mazars Merger: PT EXPERTA CONSULTING (Jakarta, Indonesia)

Added: Mazars in Kyrgyzstan (Bishkek, Kyrgyzstan)

Lost: KAP TJIENDRADJAJA & HANDOKO TOMO (Jakarta, Indonesia)

MGI Lost: MGI Melbourne, Australia and SF Consulting, Indonesia

Moore Stephens International

Added: Advent MS Tax consultants Sdn Bhd (Kuala Lumpur, Malaysia), Moore Stephens Associates (Kuala Lumpur, Malaysia), Moore Stephens Kuching (Malaysia)

Lost: Moore Stephens (Sydney West, Australia)

Morison International Merger: Hayes Knight Sydney acquired Bamfield & Co, Hayes Knight Brisbane acquired RJ Webb & Co

Added: Junaidy Shoaiib Asad (Pakistan) established an office in Islamabad

MSI GLobal Alliance Added: Pipara & Co (Ahmedabad, India), Heng Lee Seng (Singapore)

Lost: Altitude Advisory (Adelaide, Australia)

Nexia Added: Nexia Vietnam (formely Ecovis Vietnam)

Lost: Forsythes (Australia)

PKF International Added: PKF Thailand (Bangkok), PKF KRC (Shanghai, China), PKF Lawler (Australia), PKF Hacketts Brisbane (Australia)

Lost: Guinn PKF (Papau New Guinea), PKF Ross Melville (Auckland, New Zealand)

Praxity Added: PT Moores Rowland Indonesia (Jakarta) and K. M. Alam (Dhaka, Bangladesh)

Lost: Moores Rowland Malaysia (Georgetown)

Reanda International Added: Reanda M Y Wu & Co branch (Taiwan: Taichung), Reanda MC International CPA Partners branches (Japan: Hirosima, Nigata, Sendai), Finaudit Firm (Kazakhstan: Almaty, Aqtobe), Anil Ashok & Associates (India: New Delhi, Mumbai, Ahmedabad, Haridwar and Udaipur, correspondent firm)

Lost: Reanda CPA branches (China: Jilin and Qinhaungdao),

RSM International Added: MAT Audit and Professional Services - Management and Accountancy Training Ltd, Myanmar, correspondent

Lost: Nurul Faruk Hasan & Co, Bangladesh, correspondent

COUNTRY SURVEYInternational Accounting Bulletin ASIA PACIFIC REGION SURVEY


Acting Editor: Vincent HuckTel: +44 (0)20 7406 6709Email: [email protected]

Contributors : Carlos Martin Tornero, Editor sister publication The Accountant

Publisher: Ameet Phadnis Tel: +44 (0)207 406 6561 Email: [email protected]

Managing Director Timetric Briefing Services:Ana GyorkosTel: +44 (0)20 7406 6707Email: [email protected]

Subscription Enquiries: Sharon HowleyTel: +44 (0)20 7406 6615Email: [email protected]

Director of Events: Ray GiddingsTel: +44 (0) 203 096 2585Email: [email protected]

Sales Executive: Alex AubreyTel: +44 (0) 203 096 2603Email: [email protected]

Customer Services:Tel: +44 (0)20 3096 2636 or +44 (0)20 3096 2622 Email: [email protected]

For more information on Timetric, visit our website at vrl.timetric.comFor more information on accessing International Accounting Bulletin content online, including a five-year archive, please telephone +44 (0)20 406 6579 or email [email protected]

London Office5th Floor, Farringdon Place, 20 Farringdon Road, London, EC1M 3AP

Asia Office20 Maxwell Road#04-02J, Maxwell HouseSingapore 069113Tel: +65 6383 4688Fax: +65 6383 5433Email: [email protected]

Financial News Publishing Ltd, 2015Registered in the UK No 6931627ISSN 0265-0223 Unauthorised photocopying is illegal. The contents of this publication, either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publishers.

551.indd 25 20/07/2015 16:04:38

titititi•titititititititititititititititititititititititititititititi

•titi •tititi••ti••ti•titi•ti•ti••ti••tititititi••titi•titititititi•titi•tititititi•titi•ti•titititi•tititititititititi•ti•titi

•titi •tititititi•ti•ti•tititititititi•titititititi•tititititititi•ti•titi•titi•ti•ti••titititi•titititititititi••titititititititititititititititititititititititi•titi•tititititi••ti

•titi •ti•tititi•tititititi•tititi••ti•tititititi•ti•ti•titititititititi•titititititi•titi•titi•tititifititi•titititi•ti•ti•tifititi•ti•titititi

•titi •titi•titi•titititititititititititi•titi•tititititititititititititititi••tititi••ti•tititi•tititititititititititi•tititititititi•tititititi•ti••ti•tititi•

Fti•ti•ti•titititi•ti••tititititi•titititititi•tititititititititititititititi•titititititititititititititititi•tititititititititi•tititititi•ti•titititititi

titititititititititi•tititititititi•tititi•tititi•titititititi•ti•tititi•titititi•ti••tifititititititititititititititi•

tititi•ti••ti••tititi••titititi•tititititititititi•tititititititititi•tititititititi•tititititititititifftititititititi•tititititititititititi•titititititi••titititititititititititititititititititi•tititititi•titititi•titititititititi•tititi•titititi•titi•tititititifititititititititititititititititititititititititititititi•tititi•tititi••tititititi•titititititititititititititititititi•tititititititifi••ti•titi•titititi

Tel: +44(0)20 3096 2636 ; Email: [email protected]

IAB 541v2.indd 26 19/09/2014 10:19:50

Tel: +44 (0)20 3096 2636; Email: [email protected]

Tel: +44 (0)20 7406 6553 Email: [email protected]

pobcamend.indd 1 21/11/2014 15:19

uphill struggle - agn international · july 2015 issue 551 for the profession s women in africa...

Documents