Professional Documents
Culture Documents
Accountant
October 2009
02-03 NEWS
Its all about the financial crisis for the UKs professional
accounting bodies again this year and no doubt that topic
will remain good for at least the next 12 months. The crisis
is affecting the institutes in different ways, but all are
positive the relevance of their qualifications remains true
Issue 6071
PEOPLE
STANDARD-SETTING
A VRL publication
AICPA veteran
News
The
Accountant
SUSTAINABILITY
Environmental performance
Paul Druckman
three areas of specialisation he has developed
during the past 10 years technology, sustainability and the accounting profession.
First, Trucost is essentially a technology
solution. Second, its provision of environmental data hits the sustainability mark. Finally,
Trucost converts non-financial environmental
information into financial information.
Trucost has the ability to make the
accounting profession understand what
all this is about because of the quantitative
nature of the data, Druckman explained.
Druckman said this financial data is a raw
material that businesses can use to build sustainability issues into financial models.
It has always been possible [to embed
sustainability into investment decision making], but it is still a big learning curve for an
accountant, Druckman added.
Accountants in normal practice must start
looking at these externalities rather than just
the financial return because they need to
understand that the world is changing and
there are other pressures on the behaviour of
a company that will affect its value, and not
just in an altruistic sense. Now here is something they can actually grab hold of and use
with a clearer understanding.
Druckman said one opportunity for Trucost is to move beyond being a separate data
source and become embedded in what other
organisations do.
Accounting software houses could have
Trucost environmental data associated with
their accounting systems, Druckman said.
Going back to the accounting side of it,
there is no reason why management accounts
should not now include an environmental
footprint. <
Carolyn Canham
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News
AUDIT
SATYAM
NEWS BRIEFS
PEOPLE
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Of the worlds 10 largest accounting networks, just four have member or correspondent firms listed on their global websites. None
of the Big Four do.
Davani is managing partner of Dayarayan
Auditing & Financial Services, an RSM International correspondent firm, which Davani
says has been the top ranking firm in terms of
fee income twice in the past five years.
Davani explains that prior to the Islamic
Revolution in 1979, all the large international
organisations were represented in Iran. But
following the revolution, many private enterprises were confiscated or came under direct
government supervision. Subsequently, three
audit organisations were formed within the
public sector to audit and performing statutory services for these newly state-owned
enterprises.
I think under-developed
countries must support
accounting and auditing to fight
with corruption and develop
transparency to stabilise
accountability and responsibility
Gholamhossein Davani
Audit Organization
employees 16%
change in line with wider privatisation processes the nation will find it hard to compete
globally.
Demand for certified public accountants
in Iran is progressive and the future outlook
for auditing and professional services depends
on opening the market to foreigners and international accounting firms, Davani says, adding there are many opportunities for the local
profession to partner with foreign investors to
help build the Iranian economy.
He estimates the Iranian audit market has
the potential to be worth more than $200 million.
The Audit Organization is also the official
standard setter, authorising the audit and
accounting standards that the profession must
follow. Davani says accounting standards are
about 95 percent in line with IFRS.
One critically important role for the audit
and accounting profession moving forward
is fostering accountability, transparency and
responsibility. Davani says accountability in
Iran is unfortunately weak as 90 percent of the
economy is in the hands of government.
I believe all governments try to run away
from accountability and transparency, especially when they are not accountable.
However, I think under-developed countries must support accounting and auditing to
fight with corruption and develop transparency to stabilise accountable and responsibility, he says. <
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News
REGULATION
More relevant
Bruce Pounder chairs the IMAs small business financial and regulatory affairs committee. He said the IMA is happy with the additional guidance provided in 2007 because
it made the internal and external audits of
internal controls over financial reporting
more scalable and risk-based. The guidance
helps management and auditors to establish
what is important to stakeholders and adjust
procedures accordingly.
Giugliano estimates client audit fees increase
NEWS BRIEFS
STANDARDS
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Region round-up
asia -pacific
The Hong Kong Institute of Certified
Public Accountants (HKICPA) will continue
to liaise with Hong Kongs Financial Reporting Council (FRC) and Ernst & Young (E&Y)
during investigations into the Big Four firms
auditing of Akai Holdings.
Last month, Hong Kong police searched
E&Ys local offices and seized original working papers in connection with the suspected
forgery of Akais audit documents.
The Big Four firm was in court last month
facing allegations it was negligent in its audits
of Akai from 1997 to 1999.
E&Y settled with the liquidator of the
Chinese consumer electronics company for
an undisclosed amount and suspended one
of its partners after finding some of the documents in the audits of Akai could no longer
be relied on.
The HKICPA said once sufficient evidence
emerged from the FRC and police investigations to show that institute members may
have been involved in the falsification of
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Region round-up
Europe
Supervision of the financial sector in
Europe is set to be revamped through the formation of a series of new regulatory organisations. The EC has adopted draft legislation that aims to reinforce financial stability
throughout the EU, identify systematic risks
at an early stage and foster cohesion and cooperation in emergency situations.
The legislation will create a new European
Systemic Risk Board (ESRB) to detect risks
to the financial system as a whole.
It would also set up a European System of
Financial Supervisors, composed of national
supervisors and new authorities to oversee
the banking, securities, insurance and occupational pensions sectors.
Three new European supervisory authorities will be created by transforming existing
committees. The Committee of European
Banking Supervisors will become the European Banking Authority, the Committee
of European Insurance and Occupational
Pensions Committee will become the European Insurance and Occupational Pensions
Authority and the Committee of European
Securities Regulators will become the European Securities and Markets Authority.
In addition to assuming the existing functions of the committees, the new authorities
will be responsible for developing proposals
for technical standards; resolving cases of
disagreement between national supervisors,
where legislation requires them to co-operate
or agree; and contributing to ensuring consistent application of technical community
rules.
The UK Audit Practice Board (APB) has
issued updated guidance on the auditing of
complex financial instruments. The updated
practice note (PN) 23 modernises an earlier
version created in 2002.
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FEATURE: TAIWAN
The Big Four audit about 84 percent of Taiwans public listed companies, according to
the National Federation of CPA Associations of the Republic of China (NFCPAA).
Medium-sized accounting firms audit the
remainder as local regulations specify audit
firms must employ a minimum of three CPAs
to audit a public company.
Neighbourly relations
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Cross-border ties
The Big Four and some mid-tier accounting firms in Taiwan and China already offer
cross-border services to clients with business
activities in both territories. Development
of ties by Taiwan and Chinas accounting
professions is one of the topics discussed by
NFCPAA and its CPA association members
during regular meetings with the Chinese
Institute of Chartered Public Accountants
(CICPA) and the provincial CPA organisations across China.
At present it is not possible for Taiwanese and mainland accounting firms to join or
merge, but some accounting firms in Taiwan
and China have co-operation arrangements
for client referral, information sharing and
other matters, Shih explains. Some Taiwanese accounting firms doing this are linked
to a mid-tier international practice.
The Taiwanese government has no restriction on Taiwanese accounting firms relations
with mainland Chinese accounting firms but
FEATURE: TAIWAN
Qualification requirements
n TAIWAN
reorganise the accounting professions current structure, replacing the NFCPAA and
three CPA associations with a single unified
body representing Taiwans accounting profession. However, this remains stalled due to
opposition from Beijing.
It is impossible to merge as we have to
have relations with Chinas accounting profession and China wants to deal with three
local accountant associations in Taiwan and
not one island-wide body, explained Roger
Shih, an international affairs and audit committee member at Taipei Provincial CPA
Association.
Staying in favour with the Chinese profession is important as the Taiwanese organisations undertake joint activities with the Chinese Institute of CPAs (CICPA) and want
this to continue, Shih said.
The NFCPAA meets with the CICPA
annually and also meets regularly with
CICPA provincial associations.
Most of the issues we discuss are how
we should co-operate in business to serve
Taiwanese companies in China; also, the tax
situation, labour laws, customs regulations
and other matters, and their impact on business, Shih said. <
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10
he recession has dominated the activities of the UKs five major professional
services bodies for the second year in
a row.
But while the tough economic times have
dealt some challenges to the profession, they
have also provided the institutes with increased
opportunities to develop public policy agendas
and make their voices heard on issues relating
to business and the economy at large.
All five institutes have international presences and the Association of Chartered Certified Accountants (ACCA), the Chartered
Institute of Management Accountants (CIMA)
and increasingly the Institute of Chartered
Accountants in England and Wales (ICAEW)
are more global than national bodies.
Consequently, their international activities
have featured prominently in The Accountants UK country surveys for many years. This
year, however, The Accountant will feature a
global survey in December (issue 7073) so this
months report will focus on activities and
issues affecting the UK.
The institutes report that one benefit of the economic crisis has been increased public awareness of the importance of professionalism and
the value of professional qualifications.
The Chartered Institute of Public Finance
and Accountancy (CIPFA) was the only institute whose UK membership figures dropped
compared with last years survey down a
fraction of a percent to 13,281.
CIMA reported UK membership growth of
4 percent to 57,162 and the ACCA and the
Institute of Chartered Accountants in Scotland (ICAS) grew their UK membership by
3 percent to 61,303 and 15,304 respectively.
The ICAEWs UK membership grew by half a
percentage point to 112,738.
ICAEW chief executive Michael Izza notes
that in addition to the institutes membership
ending 2009 at an all-time high, resignations
and members not paying fees were at an all
time low.
In an environment where I am sure a lot of
people were looking very hard at whether or
not they wanted to pay their fees, they voted
with their wallets to continue, Izza says.
Mixed results
There were more mixed results from the institutes in terms of student growth in the UK.
The ICAEW experienced very strong growth,
up 12 percent to 14,560.
Izza says there is more demand than ever
from students and the critical constraint is
places available.
In 2008, we had about 9,000 graduates
who approached us who we were unable to
help find spaces and it wont be any different
this year, he explains.
Another positive for the ICAEW this year
was Ernst & Young UK began training with
it again. For several years the Big Four firm
has been putting its trainees through the ICAS
qualification.
[Ernst & Young] are at the moment using
both the ICAEW and ICAS and we will have
to see how that goes moving forward. But we
were very pleased that they took the decision
and it is clearly a positive move for us in a
challenging year, Izza says.
Ernst & Young now has more than 50 UK
employees training with the ICAEW. The
network also trains with the ICAEW in some
overseas locations. The other UK Big Four
firms all train with the ICAEW.
ACCA UK student numbers grew 3 percent
to 71,689 since last years survey, while the
other three organisations experienced drops.
CIMAs UK student numbers were down less
than 1 percent to 53,836, CIPFA was down 3
percent to 2,836 and ICAS was down 7 percent to 3,702.
The Accountants UK surveys have shown
a slight decline in CIPFA student numbers
each year since 2006 but chief executive Steve
Freer says this does not represent a decline in
demand for the qualification.
He explains that while fluctuations do
n UK
UK membership, 2005-2009
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11
n UK
UK student membership, 2005-2009
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12
4 changes to governance need to be investigated. The ACCA believes it will take regulatory
support and change to improve governance
procedures.
Governance issues were also high on
CIMAs agenda and Tilley says there are three
governance issues that need to be addressed
going forward.
First, there should be consistency in governance codes around the world; second, if there
is principles-based governance, what sanctions
are there if people dont follow those principles; and third, regulators must effectively
promote what good governance looks like.
Two other important issues the ACCA commented on were sustainability and the value of
global co-operation and cohesion.
The ACCA has made submissions and campaigned on the need for a global solution and
shared vision across the globe in the lead up to
the Copenhagen Climate Change Summit.
The institute is also pushing for global solutions to accounting issues and Mears says the
ACCA particularly welcomes the new IFRS
for SMEs and the revamped ISAs that emerged
from the International Audit and Assurance
Standards Boards Clarity Project.
While use of IFRS is mandatory for listed
companies in the EU, non-public interest entities must comply with the Fourth and Seventh
Company Law Directives, which are currently
under review.
If the EC determines that IFRS for SMEs
does not comply with these directives, companies could be prevented from using them.
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n DIVERSITY
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13
n UK
Survey of accounting institutes: 2009
Chartered Institute of Management Accountants (CIMA)
CONTACT DETAILS
Address
Telephone
Fax
info@accaglobal.com
Website
www.cimaglobal.com
www.accaglobal.com
President
Brendan Murtagh
Executive director
Helen Brand
Annual turnover
KEY FIGURES
MEMBER DETAILS
Number
Percent
Number
Percent
76,368
100
134,748
100
22,603
30
57,864
43
19,206
25
73,445
54
58 (3)
13,067
10
42,804 (4)
56
56,384
42
17,087 (5)
22
38,069
28
9,529 (6)
12
21,187
16
6,890
6,041
Number of students
91,524
100
347,281
100
40,927
45
172,096
50
37,688
41
275,592
79
1,368
35,895
27
52,930
69
74,541 (17)
43
14,806
19
13,317
10
7,264 (7)
10
10,995 (18)
20
181
44
90
42
Regional/international affiliations
MUTUAL LINKS
Notes: u/a = unavailable; (1) Chief executive; (2) December 2008 financial year-end; (3) Figure for members aged 25-34; (4) Figure for members aged 35-44; (5) Figure for members aged 45-54; (6)
Figure for members aged 55-64; (7) Retired; (8) Certified Management Accountants Canada; (9) Institute of Chartered Accountants in Australia; (10) American Institute of Certified Public Accountants;
(11) Hong Kong Institute of Certified Public Accountants; (12) Indian Institute of Management Calcutta; (13) Institute of Cost and Management Accountants of Bangladesh; (14) Chinese Institute
of Certified Public Accountants; (15) Institute Akuntan Manajemen Indonesia; (16) Institute of Cost and Works Accountants of India; (17) Includes 16,467 members in financial services; (18) Other
includes 10,556 unemployed and 439 no data.
Source: The Accountant
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14
Regional/international
affiliations
Accountants Association in Poland
Association of Accountants and Auditors of
Armenia
Expert and Licensed Accountants of Romania
Botswana Institute of Accountants*
Certified General Accountants Association
of Canada
Chamber of Auditors in the Slovak Republic
Chamber of Auditors of the Czech Republic
Chamber of Financial Auditors of Romania
Dubai Financial Services Authority
Eastern Central and Southern African Federation
of Accountants
Egyptian Society of Accountants and Auditors
Ethiopian Professional Association of Accountants
and Auditors
Federacin Argentina de Consejos Profesionales
de Ciencias Econmicas
Fdration des Experts Comptables Europens
Hong Kong Institute of Certified Public
Accountants
Ikatan Akuntan Indonesia
Institute of Certified Public Accountants in Ireland
Institute of Certified Public Accountants of Cyprus*
Institute of Certified Public Accountants of Greece*
Institute of Certified Public Accountants
of Singapore*
Institute of Chartered Accountants of Barbados*
Institute of Chartered Accountants of Belize*
Institute of Chartered Accountants of Guyana*
Institute of Chartered Accountants of Jamaica*
Institute of Chartered Accountants of Sierra Leone*
Institute of Chartered Accountants of the
Caribbean
Institute of Chartered Accountants of Trinidad and
Tobago*
Instituto Mexicano de Contadores Pblicos
Iranian Association of Certified Public Accountants
Lebanese Association of Certified Public
Accountants
Lesotho Institute of Accountants*
Macau Society of Certified Practising Accountants
Malaysian Institute of Certified Public Accountants
Malta Institute of Accountants*
Ministry of Economy and Finance, Cambodia
Kampuchea Institute of Certified Public
Accountants and Auditors
Ministry of Finance of the Socialist Republic of
Vietnam*
Tanzania National Board of Accountants and
Auditors
Ordre des Experts Comptables de Tunisie
Public Accountants Examination Council of Malawi*
Serbian Association of Accountants and Auditors
Singapore Institute of Certified Public Accountants
South Eastern European Partnership on
Accountancy Development
Swaziland Institute of Accountants*
Ukrainian Federation of Professional Accountants
and Auditors
Union of Accountants of the Czech Republic
Union of Chambers of CPAs of Turkey
Vietnam Accounting Association
Vietnam Association of Certified Public Accountants
Zambia Institute of Chartered Accountants*
Notes: * = joint examination scheme partner bodies.
Source: The Accountant
interests of our members, employers and students from so many different countries from
within the EU, so I think we have to be listened
to... It is not just a UK organisation speaking,
we are reflecting opinion for business and for
accountancy across the whole EU.
The ACCAs growing presence in Central
and Eastern Europe is set to aid what Mears
predicts to be steady but encouraging growth
in coming years for the institute.
Freer predicts a tough year for CIPFA members but he feels confident about their ability
to step up to the plate.
Balancing the budget is going to be a big
challenge and an absolute top priority so
accountants are going to be in the spotlight,
he says.
A second challenge will be implementing
some of the cuts in public services, and Freer
says it will also be critically important to build
the financial capacity of public sector organisations so delivering better value for money,
economy and efficiency are at the forefront of
thinking in every decision.
On a lighter note, CIPFA will also celebrate
its 125th anniversary in 2010.
ICAS will be pushing forward with more
e-targeted communications and personalised
communications with members.
We will see more e-enabled learning come
through, far more of our CPD will be delivered
on line. We will see podcasts coming through
next year and webinars appearing right across
the spectrum of ICAS work, Colella says.
Tilley predicts 2010 to herald more of the
same.
It is continuing to strengthen our individual markets, which is primarily about explaining the value of the management accountant
both to the individual and the employer.
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15
n UK
Survey of accounting institutes: 2009
The Institute of Chartered Accountants
of Scotland (ICAS)
Address
Telephone
Fax
enquiries@icas.org.uk
press@icaew.com
corporate@cipfa.org.uk
Website
www.icas.org.uk
www.icaew.co.uk
www.cipfa.org.uk
President
Executive director
Michael Izza
Steve Freer
Annual turnover
15 million (2)
74 million (2)
40.5 million
CONTACT DETAILS
KEY FIGURES
MEMBER DETAILS
Number
Percent
Number
Percent
Number
Percent
17,767
100
132,411
100
13,697
100
4,987
28
31,778
24
3,938
29
2,463
14
19,673
15
394
2,155
12
23,989 (4)
18
541
4,282
24
35,467 (5)
27
2,207
16
3,750
21
30,432 (6)
23
4,168
30
4,725
27
23,944 (7)
18
4,949
36
2,855
16
18,579
14
1,832
14
Number of students
3,736
100
16,165
100
2,885
100
1,766
47
6,466
40
1,398
49
34
1,605
49
5,094
29
41,047
31
339
7,311
41
58,260 (8)
44
990
571
3,972
8,959
65
183
18,537
3,134
23
4,608 (3)
26
10,593 (9)
14
275
283
275
434
133
225
96 (4)
142
n/a
151
Regional/international affiliations
SAICA (18)
MUTUAL LINKS
Notes: u/a = unavailable; (1) Chief executive; (2) December 2008 financial year-end; (3) Other includes 3,308 retired, 537 career break and 763 unknown; (4) Figure for members aged 25-34; (5) Figure
for members aged 35-44; (6) Figure for members aged 45-54; (7) Figure for members aged 55-64; (8) Industry and commerce; (9) Other includes unemployed, taking a career break, undertaking study,
on maternity leave; (10) Consultative Committee of Accountancy Bodies; (11) Chartered Institute of Public Finance and Accountancy; (12) Hong Kong Institute of Certified Public Accountants; (13)
Chinese Institute of Certified Public Accountants; (14) Institute of Chartered Accountants in Ireland; (15) Institute of Chartered Accountants of Pakistan; (16) Global Accounting Alliance; (17) Canadian
Institute of Chartered Accountants; (18) South African Institute of Chartered Accountants; (19) New Zealand Institute of Chartered Accountants; (20) Institute of Chartered Accountants in Australia;
(21) Institute of Chartered Accountants in Zimbabwe; (22) Institute of Chartered Accountants in Scotland.
Source: The Accountant
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16
index
VRL_IAB_Resize
7/1/08
11:48 am
Page 1
INDEX
AFRICA, THE MIDDLE EAST AND SOUTH ASIA
Audit Organization, Iran
4
Dayarayan Auditing & Financial Services 4
Institute of Chartered
Accountants of Bangladesh
7
Institute of Chartered
Accountants of India
3, 7
Iranian Accounting Association
4
Iranian Association of
Certified Public Accountants
4
Iranian Institute of Certified Accountants 4
ASIA-PACIFIC
Chinese Institute of CPAs
9
Financial Reporting Council, Hong Kong 6
Financial Supervisory
Commission, Taiwan
8-9
Hong Kong Institute of
Certified Public Accountants
6
Kaohsiung City CPA Association
9
Korean Institute of
Certified Public Accountants
6
National Federation of CPA
Associations of the Republic of China
8-9
New Zealand Institute of CAs
6
Taipei Provincial CPA Association
8-9
Taiwan Provincial CPA Association
9
EUROPE
Association of Chartered
Certified Accountants
10-15
Auditing Practices Board UK
3, 7
Chartered Institute of
Management Accountants
10-15
Chartered Institute of
Public Finance and Accountancy
10-15
Committee of European
Securities Regulators
3
European Commission
1, 3
European Financial
Reporting Advisory Group
1, 5
European Systemic Risk Board
7
European System of Financial Supervisors 7
Federation of European Accountants
2
Institute of Chartered Accountants
in England and Wales
2, 3, 7, 10-15
Institute of Chartered
Accountants in Scotland
10-15
NORTH AMERICA AND THE CARIBBEAN
American Institute of
Certified Public Accountants
1, 6
Financial Accounting Standards Board 3, 5
Grant Thornton US
5
Institute of Management Accountants
5
Public Company Accounting
Oversight Board
1, 6
US Securities and
Exchange Commission
1, 3, 5, 6
WORLDWIDE
Accounting and Auditing
Organisation for Islamic Financial
Institutions
5
International Accounting Standards Board 1,
3, 5
International Audit and Assurance Standards
Board
3
International Federation of Accountants 4
PricewaterhouseCoopers
3
Trucost
2
IAB also features surveys of the accounting profession allowing industry strategists to not only
benchmark themselves against the leading firms,
but keep informed of global developments.
US
Nordic Region
China
Italy
Middle East
Mexico
Japan
Republic of Ireland
World
South Africa
Europe
Australia
Latin America
UK
Eastern Europe/CIS
Germany
France
Netherlands
Asia-Pacific
For
information
please contact:
Formore
more
information
please
Kinnor
Bhattacharya
Kinnor Bhattacharya
Business Development Executive
Business
Tel:
+44 (0) Development
20 7563 5638 Executive
Tel: +44
(0) 20 7563 5638
Email:
Kinnor.B@vrlfinancialnews.com
contact:
Email: Kinnor.B@vrlknowledgebank.com
World Accounting Intelligence
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www.WorldAccountingIntelligence.com
Political bombshell
Irans top 10
Gholamhossein Davani.
According to International Accounting
Bulletin research, there are at least seven
global mid-tier networks that still have
Iranian affiliates (see chart below). These
groups play and will continue to play an
important role in assisting their Iranian
affiliates to develop international standards
and best practices.
Davani explains the state-owned Audit
Organization is the largest firm and audits
80 percent of the audit market, including
Irans government companies and public
institutes. The rest of the pack focuses on
the private sector. Davani estimates the
total revenue generated by the audit market is about $90 million of which Audit
Organization earns $60 million.
It is unclear what cut Bayat Rayan takes
out of the Iranian audit market but it is
significantly less than what KPMG earns
from US federal contracts each year the
Big Four firm is reported to have earned
$1.2 billion in the past decade.
For this reason alone, Bayat Rayan
partner Ali Jan believes KPMG had little
choice but to end its working relationship.
Common sense tells me that if my interests is somewhere else and they are going to
make me subject to sanctions, then I really
need to make a decision on where I am
n IRAN
The International Accounting Bulletin approached the mid-tier to find out which groups had Iranian member firms.
Yes
Network/Association
Firm name
Membership status
Nexia International
Full member
Moore Stephens Iran Limited, Moore Stephens Hajiran Audit and Management Services Firm
Full member
HLB International
Full member
Rymand & Co
Correspondent member
RSM International
Correspondent member
n/a
AGN International
n/a
No
BDO International, IGAF Worldwide, Baker Tilly International, PKF International, Kreston International, Mazars, Praxity, Leading Edge Alliance, BKR International, DFK
International
Source: International Accounting Bulletin
4 y April 2010
www.WorldAccountingIntelligence.com
Development headache
n BACKGROUND
KPMG departure sends a key message to all United Against Nuclear Iran
The United Against Nuclear Iran (UANI)
has described KPMGs departure from Iran
as being more helpful to its cause than any
other company it has targeted.
KPMG was targeted by the UANI for several reasons. It was the last Big Four firm
with a presence in Iran and the UANI is
attempting to drive out multinational companies to destabilise the nations economy
and pressure the Mahmoud Ahmejinidad
regime to buckle to US demands.
UANI spokesperson Kimberlyn
Lipscomb describes this strategy as Irans
cost benefit analysis.
Is it more worth it to them to continue to pursue illegal nuclear weapons or
to engage with the international business
community? Lipscomb asks.
The UANI claims that KPMG has profited from US government contracts worth
$1.2 billion and, therefore, the firm should
not also profit from doing business in
Iran.
The UANI hopes KPMGs departure
from Iran will lead to an exodus of multinationals that operate in the country. In
the past six months, the UANI campaigns
have pressured six major international
corporations to leave, including the heavy
duty machine manufacturer Caterpillar
and commercial products manufacturer
Ingersoll Rand.
www.WorldAccountingIntelligence.com
High-level founders
April 2010 y 5
n COMMENT
6 y April 2010
best practices. This is particularly important for keeping up to speed with international changes to accounting and auditing
standards.
IFAC president Robert Bunting says
the Big Four leaving any country could
be potentially devastating, highlighting
the important role these networks play in
providing on-the-job training. Big Four networks also provide support and resources
to professional accounting bodies, such as
the Iranian Association of Certified Public
Accountants.
You are cut off from resources and
youre cut off from colleague contacts,
Bunting says.
There is no more inbound investment
[by the Big Four firms]. In a lot of countries
the large firms and large networks are net
investors because they dont profit at all
from being in the country, they are simply
financially supporting their office there.
So you look at that and it is potentially
devastating to the profession. Certainly it is
going to delay the development of the profession for a long time.
Jan accepts that belonging to a network
has its own benefits, because you get the
technical know how, you have access to
research, access to training and things like
that which are within that international
domain.
But having said that, we are now back
on the same footing as all other firms operating in Iran, he adds.
Both Jan and Davani contend that
resources are still largely available on the
internet and through staff membership of
professional bodies abroad.
At Bayat Rayan, several professionals
have access to resources from the Institute
of Chartered Accountants in England and
Wales, among other bodies. He hopes these
connections will help mitigate the loss of
materials and support from KPMG.
Another effect KPMGs departure could
have on Bayat Rayan is the removal of
KPMGs strict quality control infrastructure, which polices auditor practice across
the network.
Firms that belong to networks such as
KPMG are regularly inspected to ensure
they comply with high global standards.
The loss of this oversight could eventually
filter down to audit quality if careful monitoring is not picked up elsewhere.
Sending a message
Profession battles on
www.WorldAccountingIntelligence.com
www.theaccountant-online.com
Iran:
clean sla
te
after the
THE TRUTH
YOU NEED
TO BUILD
A BIG LIFE.
Full of insight,
wisdomandinspiration.
Fayezul Choudhury
CEO, International Federation of Accountants
Alex Malley
CEO, CPA Australia
EDITORS LETTER
The Accountant
CONTENTS
NEWS
04-06
07
08-09
08-09
IN FOCUS
Thomas Mller-Berger
07-14
www.theaccountant-online.com
10-14
15-19
January 2015 y 3
EDITORS
LETTER
The Accountant
NEWS
The
Accountant
4 y January 2015
www.theaccountant-online.com
NEWS
The Accountant
Spanish equivalent of
chartered accountants
introduced to help
SMEs finances
Spains General Council of
Economists (Consejo General
de Economistas or CGE) and
the Institute of Auditors (Instituto de Censores Jurados de
Cuentas de Espaa or ICJCE)
partnered to introduce a professional profile called experto
contable, which would resemble the chartered accountant of
other jurisdictions.
Spains two professional bodies said the move is aimed at
building the reputation of Span-
www.theaccountant-online.com
January 2015 y 5
NEWS
ANALYSIS
IN FOCUS
The
Accountant
EDITORS
LETTER
The Accountant
6 y January 2015
Adoption issues
ICAI president Kumar Raghu told The
Accountant that his institute recommended
the implementation of IFRS to the government. He warned, however, that the new
standards will require new types of financial information, and presumably first-time
adoption issues will be rife. Any new system of accounting will bring implementation
challenges, for both preparers of financial
statements and auditors. We are a very big
country, with a large number of accountants.
Oversight
The MCAs announcement did not mention
the controversial National Financial Reporting Authority (NAFRA), a new regulator
under the Companies Act which hasnt been
implemented yet. Taneja said that NAFRAs
composition and team members could be
announced in the next months.
I think is a good bold step, in line with
the PCAOB [Public Company Accounting
Oversight Board] in the US. Its going to handle accounting standards and professionals,
who were not under big scrutiny. They have
been handled by the institutes, which is quite
lenient, Taneja said.
The ICAI president disagreed and hoped
the government will not pass enabling legislation to implement the NAFRA. Our
institute is doing its job. The NAFRA is a
duplication of authority; there is no need for
one more regulator, Raghu said.
Despite the challenges and difficulties arising, Indias latest announcement show the
countrys commitment to be better integrated in the global economy. And in light of the
US president recent visit and announcement,
it is expected that foreign direct investment,
and not only that coming from the US, will
see an important increase.
With an accounting profession and a
corporate world able to speak the international language of IFRS, it will only make
India more attractive for investors. Needless
to say, its a language the US is still turning
its back on. <
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The Accountant
EDITORS
INLETTER
FOCUS
NEWS
www.theaccountant-online.com
Management, a long-term focused investment partnership, noted that not all investors belong to the same type. Its important
to differentiate that there are long-term
investors, who may or may not be focused
on sustainability specifically, but indeed in
the long-term assessment of investments.
And then there are traders.
From the floor, Global Reporting Initiative chairman Christianna Wood asked the
panel that if one of the issues is the shortterm focus of traders, what can the finance
community can do about it. Blood answered
that there are increasingly more long-term
investors in the financial system. However,
he said, they often confuse themselves and
think as traders. They become very focused
on quarterly performance; we need to move
away from all that. Long-term investors are
structural for a more sustainable economy.
Again from the floor, a delegate highlighted the issue of incentives in the financial services industry. If you look at brokers business models, youll find that being
short-term focused improves their profitability. He stressed that such a system of
incentives is undermining sustainability and
said accounting could help to challenge this.
We can start using the data from the
corporate disclosures to show clients where
the money is being invested; what kind of
sustainability profile is in the portfolio. But
at the moment this is not particularly pervasive, he said.
Sustainability did seem to be the days
top priority, as on the same day of the A4S
summit in London, the US Secretary of
State John Kerry paid an unexpected visit to
negotiators in Lima. If youre a big developed nation and you are not helping to lead
[in sustainability] then you are part of the
problem, Kerry said. In his closing keynote
speech Prince Charles joked: I did my best
to account for a little bit of sustainability by
walking here. Step by step the message of
sustainability permeates the financial world.
And while negotiators saved the day in
Lima, next December all eyes will turn to the
2015 Paris UN climate change conference.
Carlos Martin Tornero <
January 2015 y 7
IN
The FOCUS
Accountant
The Accountant
EDITORS
LETTER
8 y January 2015
www.theaccountant-online.com
The Accountant
Implementation challenges
However the level of implementation
around the world is difficult to ascertain.
Only two countries directly refer to IPSAS,
Switzerland and Austria, while many country use the international standards as a
base to develop their own set of national
accrual-based standards. Nevertheless
Mller-Marques Berger says that 80 countries already apply or are considering applying IPSAS.
Nevertheless he admits that IPSAS implementation doesnt come without its fair
share of challenges. First theres the question of cost, but Mller-Marques Berger
contends that the cost of doing nothing is
greater then the cost of implementation.
In Europe for example, some member
states needed to be bailed out or subsidised
[because of the financial crisis], he says,
adding that this is the cost of doing nothing. And you have to compare that to the
cost of getting improvements in the public
finance management system.
Equally the debate tends to focus on the
costs rather than the benefits, he continues.
He argues that a government might have to
cover implementation costs for a period of
three-to-five years, but the benefits in having transparency and better figures, better
decision-making, will last for decades.
I rather tend to speak about investments
in improving our public finance management system, rather than talking about
costs, he says.
Lack of skills and knowledge is another
challenge regarding IPSAS implementation, but this is a gap thats becoming easier to breach according to Mller-Marques
Berger. One of the advantages of having
accounting and reporting systems which are
very close to the private sector is that we can
leverage the knowledge we have of financial
reporting in the private sector, he argues,
saying that it wasnt the case 10 years ago
when an accountant wouldnt really cross
the line between private and public sector.
Now, if you have knowledge in IFRS,
I think you update yourself on what are
the additional or different requirements in
IPSAS in a reasonably short time, he says.
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EDITORS
INLETTER
FOCUS
NEWS
January 2015 y 9
IN
The FOCUS
Accountant
EDITORS
LETTER
The Accountant
10 y January 2015
Par ticipa
n
ts, Ro
me Nov 2
Oscar N
014
oe Lpe
zC
Instituto
Guatem ordn:
alteco
de Conta
d
Auditor ores Publicos y
es,
committe president executi
ve
e (Guate
mala)
Isidro So
to Snch
ez: ISS
Consulto
res, CEO
(Costa Ric
a)
Juan Iva
n Rogers
-Harper:
Institute
of Anti-F
raud Fore
Auditors,
nsic
presiden
t (Panam
a)
Umber to
Tedeschi:
Abile
Consultin
g Group,
chief exe
(Brazil)
cutive.
www.theaccountant-online.com
The Accountant
as a business. The CPD that national bodies offer should be at more affordable prices
for their members. They charge a fortune,
despite the members being those who financially maintain the institutes. In addition,
our national bodies should monitor and
take action against professional malpractice.
They should keep a vigilant eye on firms that
provide services for which they are not qualified or lack sufficient expertise. As I said, this
partly explains why banks or regulators tend
to underestimate independent firms, which
ultimately shapes the markets dynamics.
TA: What does the market look like in Costa
Rica?
Soto Snchez: Id say the Big Four have 75%
of market share, and 15% the mid-tier. There
is still a considerable segment, about 10%,
formed by small and medium-sized independent firms and individual practitioners.
TA: Whats the situation in Panama?
Juan Ivn Rogers-Harper: Professional training and education is the key that opens the
door of the market. If accountants dont
believe in professional training and dont
look for it, either within the country or
abroad, they will lag behind. We have about
15,000 accountants for a country of four
million people. But out of those 15,000
accountants, just 15% are members of one
of our three national accounting bodies. The
situation, Id say, is similar to Guatemala
and Costa Rica. There isnt support from the
www.theaccountant-online.com
government or from international organisations. We should aim at forcing accountants to keep up to date with international
rules, standards and best practices. This is
expensive. But accountants play a crucial
role in society and there are worrying signs
that society is losing confidence in the profession. For example, as one of the panellists at the WCOA said, accountants should
fight fraud, corruption and money laundering. Yet the widespread perception is that
institutions that are supposed to enforce the
law arent able to counteract this scourge.
And in those institutions accountants work
without being able, or not knowing how to,
fight corruption more effectively. And this
is a global perception. Panama is one of the
fastest-growing economies in Latin America,
with a wealth of foreign investment flows.
This investment, however, poses risks too.
Sometimes capital of suspicious origin slips
through the system and dont forget that all
those investments have passed through an
accountants hands at some point.
TA: And what does the accounting firms
market look like in Panama?
Rogers-Harper: The market share of the Big
Four, mid-tier and independent firms could
be around 70%, 20% and 10% respectively.
In Panama non-Big Four firms are getting
stronger. Some professionals leave the biggest firms to pursue a career with other market players or to found new firms.
TA: Umberto, lets hear about Brazil now.
Umberto Tedeschi: We have 500,000
accountants, of which 150,000 are based
in Sao Paulo, and the population of Brazil
is 200 million. The profession has massive
opportunities. Accounting studies are the
most sought-after degrees in universities.
As in every field of life, though, when a sudden growth is reported, quality and quantity
dont go necessarily hand in hand. One of
the main concerns of the Conselho Federal
de Contabilidade (CFC) is to ensure that
the quality of the accounting curricula is
maintained in each of Brazils 27 states. In
fact, a proficiency test was reintroduced in
order to gain access to the profession and be
granted the licence to practise as an accountant. Another concern for the CFC is to keep
the qualification relevant through CPD, for
both auditors and accountants. And one of
EDITORS
INLETTER
FOCUS
NEWS
Rogers-Harper, Panama
the main challenges, not just for Brazil but
for the whole of Latin America, is the ethics of the profession. This closely relates to
the issue of fee pressure. We were discussing
this between us a while ago. Some professionals bid down fees disregarding quality
standards. Theres a constant struggle to dignify the profession going on, which connects
with the ethics and CPD. In my opinion, this
is crucial for the future of the Latin American profession.
TA: What does the market of accounting firms
look like in Brazil?
Tedeschi: My area of expertise is accounting and not just auditing. Also take into
account that the majority of companies,
which represent about 80% of Brazils GDP,
are not subject to statutory audits. Among
the remaining companies, worth 20% of
GDP, more than half are international corporates whose choice would normally be a
Big Four firm. But I should say that in Brazil
we have the Big Six. Grant Thornton, BDO
plus other local firms are making inroads
into the auditing market, particularly among
listed companies.
TA: Umberto pointed to the critical issue of
fee pressure as a structural problem of the
profession. Do you perceive that benefits are
put above quality in audit work?
January 2015 y 11
IN
The FOCUS
Accountant
EDITORS
LETTER
The Accountant
BRAZIL
Population
COSTA RICA
64.3m
Unemployment rate
GDP
6.5%
$2.6trn
GDP growth
GDP per capita (PPP)
Foreign direct investment (net inflows)
4%
$12,994.7
3.6% of GDP
Inflation
4.7%
GUATEMALA
Population
4.8m
Unemployment rate
GDP
6%
$53.6bn
GDP growth
GDP per capita (PPP)
Foreign direct investment (net inflows)
4.4%
$13,907.5
6.5% of GDP
Inflation
5%
Population
15.9m
Unemployment rate
GDP
$56bn
GDP growth
3.4%
$5,489.7
2.5% of GDP
Inflation
4.3%
-3.2% of GDP
-5.4% of GDP
-3.7% of GDP
Budget balance
-1.7% of GDP
Budget balance
-5.7% of GDP
Budget balance
-2.3% of GDP
Ranked 69
out of 187
Ranked 47
out of 175
Ranked 115
out of 175
Ranked 79
out of 187
Ranked 68
out of 187
Ranked 125
out of 187
12 y January 2015
www.theaccountant-online.com
The Accountant
PANAMA
Population
3.9m
Unemployment rate
4.2%
GDP
$45.6bn
GDP growth
GDP per capita (PPP)
Foreign direct investment (net inflows)
7.2%
$18,256.6
2.3% of GDP
Inflation
4.8%
-8.7% of GDP
Budget balance
-2.7% of GDP
Ranked 94
out of 175
Ranked 65
out of 187
www.theaccountant-online.com
IN FOCUS
January 2015 y 13
IN
COUNTRY
FOCUS
SURVEY
The
Accountant
EDITORS
LETTER
The Accountant
Top employers
Revenue (BRLm)
Rank/firm
Staff
Partners
PwC
1,199.9
PwC
5,800
Deloitte
1,094.0
Deloitte
5,000
EY
942.0
EY
4,447
KPMG
887.3
KPMG
4,000
Grant Thornton
103.4
18
Grant Thornton
873
22
BDO
91.2
60
BDO
815
36
Mazars
90.0
84
Mazars
777
17
58.0
64
428
31
RSM International
34.5
61
386
42
10
28.4
72
Nexia International
368
27
14 y January 2015
about it as IFAC membership is for accounting institutes. However, take into account
that theres a new profession, forensic audit,
which is being led by accountants. In general
our profession, and in particular international organisations, need to be more open.
We need to play them some tango or samba
and see if they become more sociable.
TA: Talking of which, in Europe the profession has to face the music and implement the
reform of the audit market, including mandatory rotation.
Lpez Cordn: In Guatemala it isnt compulsory by law. Theres just rotation of the audit
partner although the wider debate about
www.theaccountant-online.com
Clean slate
after the embargo
A man pays tribute to Persian poet Hafez at his tomb in Shiraz. Photo by Vincent Huck
International sanctions eroding business activity, the exodus of international firms, and lobby groups
calling for sanctions to be stepped up a notch. Despite the adverse conditions, the Iranian profession
is proving to be resilient while everyone keeps an eye on the nuclear negotiating table. Carlos Martin
Tornero investigates
www.theaccountant-online.com
IRAN
At a glance
POPULATION
78.1m
UNEMPLOYMENT RATE
14.7%
GDP
$326.3bn
GDP GROWTH
1.1%
GDP PER CAPITA (PPP)
$13,241
FDI (NET INFLOWS)
0.8% of GDP
INFLATION (CPI)
21.1%
CURRENT ACCOUNT BALANCE
1.9% of GDP
BUDGET BALANCE:
-4% of GDP
CORRUPTION PERCEPTIONS INDEX 2013
Ranked 136th out of 175
HUMAN DEVELOPMENT INDEX
Ranked 75th out of 187
Source: The Accountant, IMF estimates, UNDP, WB and
Transparency International
International relationships
Inevitably, one vital issue to understand
Irans modern accounting industry emerges
during the conversation. In April 2010 the
last Big Four firm with a presence in the
country, KPMG, severed ties with its affiliated national firm Bayat Rayan.
The exodus steadily continued, reaching
a tipping point in 2013 when Nexia, Grant
Thornton International, RSM International
and Crowe Horwath International followed
suit.
Behind the exodus has been a lobby
campaign by the US pressure group United
Against Nuclear Iran (UANI). By naming
and shaming companies with any commercial relationship with Iran, UANI targets the
countrys economic lifeblood as a means to
January 2015 y 15
COUNTRY
SURVEY
The
Accountant
EDITORS
LETTER
The Accountant
IRAN
IACPA
Total membership: 2,106
Male
Female
Diversity
110
94.5 % vs 5.5%
1,996
78
94.4% vs 5.6%
B-rated
C-rated
D-rated
69
121
41
Source: IACPA; Notes: 27 firms havent been assesed yet; The other
professional body, the IICA, has 6,502 members (598 female) . At the
time of publication the IICA didnt participate in this survey
16 y January 2015
As a result, the parliament passed anoththere are 266 firms which are reviewed on a
er law establishing the IACPA, which was
yearly basis by the IACPA. After this quality
granted power to supervise audit firms of
control, firms are ranked in four categories:
CPAs and to develop the Iranian profession.
A, B, C and D, with A reflecting the highBut the abundance of state-owned busiest quality. The review process could involve
nesses in Irans economy still remains a challosing the registration if the outcome is
lenge for the profession too, Vafadar says,
unsatisfactory.
because the demand for its services would be
As of January 2015, there were 69 firms
greater with a more dynamic private sector.
ranked A; 121 B-ranked firms; 41 C-ranked
Another question we put forward, on the
firms and eight D-ranked firms. The remainback of the ongoing EU audit reform impleing 27 are new firms which havent been
mentation, is if there is mandatory audit
reviewed by the IACPA yet.
rotation and if audit firms can render other
Despite not being able to provide a rankservices.
ing by revenue or income, delegates state
As Vafadar explains listed companies
that theres no gap in the market between
the first four players and the following midmust rotate auditors every four years and
tier peers as in other countries.
no other services to the audited company
Vafadar points out that size is not that
can be provided. Auditors themselves are
important and all reviewed firms should be
not allowed to take other jobs, apart from
able to uphold good standards. However, the
teaching at university.
differences in quality are reflected by those
A to D rankings, and there is increasing speInternational perspective
cialisation of firms by sectors or industries.
The conversation with the Iranian delegaAt this point in the conversation, delegates
tion at the WCOA left a lasting impression
point out that one of the issues Iran faces is
on The Accountants editorial team. Eager
still a weak private sector as the majority of
to obtain further insight and analysis, this
businesses are state-owned.
publication contacted stakeholders from the
This is an issue for the accounting profesglobal accounting industry.
sion as well, Vafadar says, looking back to
We focus on two main issues: what impact
the 1979 revolution to offer perspective on
the sanctions may have had in the Iranian
the matter. In the aftermath of the Iranian
professions fabric. And whether or not,
Revolution, businesses were nationalised,
despite the embargo, theres interest in the
international accounting firms left the counIranian profession and market.
try and the local ones had to close because
The Association of Chartered Certified
of a drop in demand for their services. Three
Public Accountants (ACCA) head of Northgovernmental organisations were established
ern Gulf Anis Motorwala, who has responto audit the recently-created state-owned
sibility for Iran, recently travelled to the
business sector.
country.
Four years later, in 1983, a law was
ACCA doesnt have an office for its scarce
passed to allow the merger of the three. By
Iranian membership about 15 profes1987, the resulting body, called the
sionals. However it counts 350
Audit Organisation of Iran, was
students, who can take ACCA
also responsible for setting
computer exams in an Iranaccounting and auditing
based examination centre.
standards.
Motorwala predicts a
Its clear that having all
higher demand for skilled
those responsibilities in the
financial professionals if
hands of one entity and not
the sanctions and the enviinvolving stakeholders in the
ronment eases up in the near
Abbas Vafadar
process of standard-setting is not
future, as Iran will start interideal, Vafadar notes.
acting in international markets.
As such in the nineties, shortly after the
These skills can improve. For examwar with Iraq, the government started libple, banking operations are basic in certain
eralising the economy. And in Irans first
aspects. Banks are lending, based on the balfive-year development plan, Vafadar says,
ance sheet and the income statements, but
the need for private sector audit firms was
they dont look at cash flow, Motorwala
acknowledged.
say.
www.theaccountant-online.com
IRAN
The Accountant
www.theaccountant-online.com
COUNTRY SURVEY
NEWS
Weapon stockpile
Russia
8,000
It spends more on its nuclear arsenal than all other countries combined.
United States
7,315
France
300
China
250
United Kingdom
225
Pakistan
100-120
It has increased the size of its nuclear arsenal considerably in recent years.
India
90-110
Israel
80
North Korea
<10
Source: Federation of American Scientists, 2014 and the International Campaign to Abolish Nuclear Weapons
January 2015 y 17
COUNTRY
SURVEY
The
Accountant
Politics
In post-revolutionary Islamic Iran the
Supreme Leader Ayatollah Ali Khamenei is the ultimate ruler of the country, elected for life by a religious elite.
There are presidential and par lia ment ar y elections ever y four years,
but the Supreme Leader has the f inal
decision on all crucial public af fairs.
Candidates running for presidential and
legislative elections are subject to a vetting
process carried out by the Guardian Council.
According to a BBC Monitorings report
about the past elections, this process
aims at checking the piety and loyalty
to the Islamic Republic of candidates. Of
the total 686 candidates who registered,
only eight of them were approved by the
Guardians Council, 30 of them women.
As the BBC also reported there is ambiguity in
Irans constitution about the participation of
women in presidential elections. The council
interprets that law only allow women to run as
members of parliament, not for president. <
running of that transaction and would usually invoice the referred firm.
Hickey says his association hasnt got,
at the moment, any firm knocking on the
door to join, but Alliott is very keen on
Iran. Were clear about the relationship
that we have with our members in their
respective countries. As long as theres transparency in what people are trying to do and
these are legitimate businesses looking to do
legitimate work, were there to support them
on an independent basis.
The Accountant contacted a large number
of international firms and in the majority
of cases, the interest in entering the country
if sanctions are lifted, is indicative of Irans
accounting industry potential.
One of those is Crowe Horwath International which before its departure from
Iran in 2013 was represented by Hoshiyar
Behmand & Co, a firm that had been part of
a Big Four in the past.
Crowe Horwath International regional
director for EMEA Bernard Delomnie says
the network was active in Iran working both
for domestic and international companies,
but always within the limits of the interna-
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LETTER
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IRAN
tional embargo.
Crowe Horwath International was one of
the international firms that were put under
pressure by the US lobby group UANI. Delomnie says that when they received the letters from UANI asking them to leave Iran,
the network reviewed the situation with its
external legal advisers, who confirmed that
the international firm was not infringing the
embargo.
However, after discussing with our Iranian colleagues, we agreed that it was better
to part company for the time being and we
made our decision accordingly in the common interest of everybody, Delomnie says.
He adds: We hope that the political situation will evolve positively and that we will
be able to readmit our previous member firm
to our network.
However, if the international accounting
firms werent doing anything illegal why
didnt they stand up and fight back, uniting
against the challenge posed by lobby groups
such as UANI?
If the demands of those lobby groups were
beyond what could be considered reasonable, why wasnt there a united voice from
the profession defending the legitimate right
to have a member firm in Iran?
Didnt UANIs challenge represent one of
those occasions when the global profession
should put aside industry squabbles and
respond in unison?
UANI chief executive Mark Wallace tells
The Accountant: Certainly, we were an
encouraging force, but Id like to think that
those accountancy firms took what I see as a
wise decision on their own volition.
Wallace, a former UN ambassador,
describes UANIs lobby work as a hard soft
power capable of affecting foreign policy
where governments cant or wont act. Different sources and media reports link UANI
with Jewish and pro-Israel groups.
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accounting firms were doing be considered illegal. Would paying membership fees to an international network constitute any trading activity
at all?
On the other hand, international accounting
networks are typically formed by independent
member firms. One of those member firms, based
in a country where trading with Iran is not forbidden, could technically establish contact with
Iranian peers.
Therefore, whats really been achieved by
UANIs campaign against accounting firms? If,
as many practitioners have argued, the Iranian
profession has become more resilient as a result,
then UANIs campaign could have backfired.
If professional collaboration between colleagues and former colleagues is hypothetically
possible, either through referrals or simple networking, then is not UANIs campaign doomed
to fail?
Moreover, it wouldnt be exaggerating to say
that international accounting firms might be
queuing up to enter (or re-enter) Iran, judging by
the words of IACPAs Vafadar: Considering the
positive signs from the result of sanctions negotiations, the relationships between Iranian audit
firms and the international ones have started, but
there have been no official agreements between
them.
He doesnt share, however, the analysis
expressed by his colleague at HLB Modaberan
Auditing Services, partner Nasrollah Saleh.
For Vafadar, the exodus of international firms
has prevented Iranian firms from accessing up-todate methodology, knowledge and best practice,
particularly first-class advisory capabilities which
are one the highest sources of revenue for firms
globally, he says.
Vafadar also regrets that the sanctions do not
allow Iranian companies to list on foreign stock
exchanges, which consequently hinders the aspirations of Iranian audit firms to enter the global
market of professional services. And internally
the embargo has reduced demand. <
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