BDO Malaysia managing partner Dato' Gan Ah Tee

68 Pages·2014·22.04 MB·English

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THE MAGAZINE FOR FINANCE PROFESSIONALS .A ACCOUNTING AND BUSINESS MALAYSIA 09/2014
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FORWARD VISION THINKING AHEAD
ACCA MALAYSIA HOSTS FUTURES CONFERENCE INTERVIEW: DATO’ GAN AH TEE, BDO MALAYSIA MANAGING PARTNER
IN DEMAND SECURITY WATCH
WHY WE NEED MORE ACCOUNTING PROFESSIONALS COMPANIES MUST BE VIGILANT IN THE FIGHT AGAINST FINANCIAL CRIME
HISTORY HOW ACCOUNTABILITY HAS CHANGED THROUGH THE AGES GOVERNANCE SHOULD STOCK EXCHANGES ALLOW DUAL-CLASS LISTINGS?
SMALL AUDITS MAKING A PROFITABLE BUSINESS CORPORATE SKILLS THAT ASPIRING CFOs NEED TO ACQUIRE
IN PRACTICE COMMERCIALITY CPD TECHNICAL REVENUE RECOGNITION

WELCOME 3
Welcome
ACCOUNTING
FINANCIAL CRIME MALAISE AND BUSINESS
A recent survey on economic crime revealed that while The leading monthly magazine for
this scourge is growing globally and in Malaysia, local finance professionals, available
companies are surprisingly lackadaisical about the threat. in six different versions: China,
PwC’s 2014 Global Economic Crime Survey – of 5,128 Ireland, International, Malaysia,
respondents from 95 countries – found 47% of Malaysian Singapore and UK.
organisations had not carried out an assessment of their
fraud and corruption risks in the past two years, or did
not know if they had done so. More worryingly, 38% of There are different ways to
these organisations are not sure what a fraud risk assessment entails. read AB. Find out more at
Asset misappropriation remains the most prevalent type of financial crime www.accaglobal.com/ab
befalling Malaysian companies – affecting 65% of those who had fallen victim to
financial crime over the past two years. The report said although many ‘big-ticket’
asset misappropriations are committed using fraudulent means such as false
ON PAPER
invoicing, losses are caused mainly by straight-out theft. Globally, theft is the most
common form of economic crime (69%), followed by procurement fraud (29%), Free to ACCA
bribery and corruption (27%), cybercrime (24%) and accounting fraud (22%). members. Annual
PwC says the two most prevalent forms of economic crime in Malaysia are non-member
corruption and the fraud that occurs within the procurement/purchasing cycle, subscription £85
including conflicts of interest and kickbacks. Most organisations lag behind their
counterparts in the US and Europe in formulating strategies to combat financial
crime. While the bigger and more progressive companies do have policies, strategies
ON IPAD
and procedures in place to tackle financial crime, many others remain clueless as
to what needs to be done. C-Suites need to be involved in the fight against financial Download searchable
crime as a matter of good business practice. Our feature on financial crime (page iPad editions from
16) looks at what companies can do to deal with this growing problem. the iTunes App Store
Meanwhile, on page 12, find out how Dato’ Gan Ah Tee’s ‘anything is possible’
mindset helped inspire the charismatic managing partner of BDO Malaysia to
build his mid-tier accountancy firm into ‘a force to be reckoned with’.
ON
Lee Min Keong, Malaysia editor, [email protected] DESKTOP
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ACCOUNTING AND BUSINESS
4 CONTENTS
AB MALAYSIA EDITION
SEPTEMBER 2014
VOLUME 17 ISSUE 8
Asia editor Colette Steckel
[email protected] [phone]
International editor Lesley Bolton
[email protected] [phone]
Malaysia editor Lee Min Keong
[email protected]
Digital editor Jamie Ambler
Sub-editors Loveday Cuming, Peter Kernan,
Vivienne Riddoch
Digital sub-editors Rhian Stephens, Eleni Perry
Design manager Jackie Dollar
[email protected] [phone]
Designer Robert Mills
Production manager Anthony Kay NEWS
[email protected]
6 News in pictures
Advertising Richard McEvoy A different view of
[email protected] [phone] recent headlines
Head of publishing Chris Quick 8 News round-up
[email protected] [phone] A digest of all the latest
news and developments
Printing Times Printers Pictures Corbis
ACCA FOCUS
President Martin Turner FCCA 12 Interview: Dato’ Gan
Deputy president Anthony Harbinson FCCA Ah Tee We meet the
Vice president Alexandra Chin FCCA
managing partner of
Chief executive Helen Brand OBE
BDO Malaysia
ACCA Connect
Tel [phone] Crime crackdown
Fax [phone] Businesses are aware of
[email protected] financial crime but need
[email protected]
to step up the fight
[email protected]
COMMENT
20 Errol Oh Short-
termism does long-term
ACCA Malaysia sustainability no favours
ACCA Malaysia Sdn Bhd (473007P)
27th Floor, Sunway Tower
86 Jalan Ampang 21 Cesar Bacani Adapt
50450 Kuala Lumpur your management style
1 800 88 5051 to attract Millennials
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Accounting and Business is published by ACCA 10 times per year. All views 22 Martin Turner How
expressed within the title are those of the contributors. accountants can help to
The Council of ACCA and the publishers do not guarantee the accuracy of protect complex supply
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Copyright ACCA 2014 Accounting and Business. No part of this publication 23 The view from
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permission of ACCA.
plus snapshot on the
Accounting and Business is published by Certified Accountant (Publications) automotive industry
Ltd, a subsidiary of the Association of Chartered Certified Accountants.
29 Lincoln’s Inn Fields 24 CFO skills checklist
London, WC2A 3EE, UK Audit period July Financial acumen is a
[phone] 2012 to June 2013 given, but what else do
www.accaglobal.com 154,625
aspiring CFOs need?
ACCOUNTING AND BUSINESS
CONTENTS 5
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PRACTICE 46 International
business Making
27 The view from
effective acquisitions
Thokozani Kasinja
of Grant Thornton,
48 As you go Quarterly
Botswana, plus snapshot
rolling forecasts beat
on external audit
annual plans hands down
28 A commercial success
TECHNICAL
How practitioners can
offer clients the business 49 Revenue recognition
advice they crave A look at IFRS 15 issues
30 Small audits How to 52 Technical update The
make the service line a latest on audit, taxation
successful activity rather guidelines, agreements
than a subsistence one and financial reporting
INSIGHT 54 Due diligence
32 Corporate governance A multi-disciplinary
Should dual-class listings review is essential when
be permitted in Asia? evaluating a business
35 Graphics Global ACCA
economy 60 ACCA Futures
Conference As business
36 Historical perspective evolves so must finance
Author Jacob Soll reveals professionals’ roles
how accountability has
changed over the ages 62 News Government
agencies learn of big
38 Pursuing provenance data concept; crowds
Association with pillage is flock to TalentCorp fair
a real risk for CFOs with
complex supply chains 63 Council Highlights of
the 21 June meeting
40 Careers Dr Rob
Yeung looks at how to 64 Event ACCA and MIA
achieve goals, plus tips host joint seminar
on beating the post-
holiday blues 65 Datuk Zaiton Mohd
Hassan We must tackle
42 Hand in hand Finance the skills shortage
and business need to through business-
become partners relevant qualifications
44 Interview: Tony 66 News Global online
Grundy How to step into conference, plus ACCA
the strategist role membership hits 170,000
ACCOUNTING AND BUSINESS
6 NEWS | PICTURES
▼ TIME FOR REFLECTION
Following the twin disasters of flights MH17 and
MH370, Malaysia Airlines may seek to rebrand itself
to regain customers’ trust. It has called for changes
to international rules on where airlines can fly
▲ ELECTION WIN
PDI-P party’s Joko Widodo, seen here on
polling day, won the close-run presidential
elections in Indonesia, one of the region’s
emerging markets
ACCOUNTING AND BUSINESS
PICTURES | NEWS 7
◄ TYPHOON TURMOIL
The biggest storm to hit ▼ ON TRACK
southern China in 40 MTR Corporation has won the £1.4bn
years has killed 17 people, contract to run London’s Crossrail service
leaving businesses to count from 2018. The Hong Kong-based metro
the cost of the damage operator beat British rivals to the franchise
▼ CAFFEINE FIX
Nespresso is eyeing coffee demand in Asia
and China in plans to bring its ‘affordable
luxury’ capsule system to the region
▲ OFF THE MENU
McDonald’s outlets in Beijing and Shanghai
are not able to serve their flagship burgers
after a key US supplier recalled products
ACCOUNTING AND BUSINESS
8 NEWS | ROUND-UP
News round-up
BRICS nations to establish bank, Australia abolishes carbon tax, South Korea and China
strengthen currency trading links, and EY leads on assurance services in Myanmar
BUILDING BRICS using a new online platform, CARBON BACKFLIP economy. Australian
The emerging BRICS nations designed to streamline Living up to its pre-election businesses either had to
(Brazil, Russia, India, China processes. The SFC has promise, Australian prime absorb the costs or pass it
and South Africa) have also introduced more user- minister Tony Abbott’s on to the consumers,’ Abbott
agreed on the structure of friendly electronic versions coalition government has said. While some business
a US$50bn development of the public and private abolished the carbon tax. groups welcomed the repeal,
bank – to be called New disclosure forms for use with Abbott has campaigned Labor leader Bill Shorten
Development Bank – to the new system. A system for years to rid Australia of said it made Australia the
provide low-interest loans user guide is also available a carbon-pricing scheme, first country to reverse action
to developing countries for online. These changes aim introduced by Labor in on climate change.
infrastructure projects, and to enhance efficiency and July 2012, arguing that the
a US$100bn emergency transparency through more tax is ‘toxic’, hurting both GENTLER LANDING
reserve fund which member timely dissemination of businesses and households. While investors globally
states can tap in cases of material information during ‘The carbon tax was a A$9bn- have regained their appetite
balance-of-payment crises. an offer period. a-year hit on the Australian for risk, concerns are
The countries’ leaders signed rising about the prospect
the agreement at the sixth of debt defaults in China,
BRICS summit in Brazil in suggests the Bank of
July. While the currency pool America Merrill Lynch Fund
will rival the International Manager Survey for June.
Monetary Fund (IMF), A net 66% of respondents
Brazilian president Dilma expect the global economy
Rousseff told reporters that to strengthen over the
the BRICS were not seeking next year, though 36%
to distance themselves from think China is more of a
the US-based institution. 1.7BN 1.7BN significant risk on investors’
horizon. However, at an
AUDIT AGREEMENT economic conference in
Officials from China and the southern France in July, IMF
US appear to have committed managing director Christine
to cross-border audit Lagarde said that the IMF
inspections in a deal that China, India, Japan and does not expect a ‘brutal’
could end a long-running Indonesia account for slowdown in China.
dispute between the three-quarters of Asia-
countries’ securities Pacific’s subscribers – over BANKS FEEL THE PINCH
regulators. The first a third of the global total Most multinational banks
inspection of a mainland Asia-Pacific still see Asia as a high-
Chinese audit firm is promise market, despite
expected by the end of 2014, Rest of the challenges of high
after protocols are agreed to. the world staff costs, compliance
The deal was inked during requirements and increased
talks held in Beijing in July, S ASIA PACIFIC GETS CONNECTED competition, according to
James Doty, chair of the main Asia Pacific now accounts for half of the a new KPMG report on the
D
US auditor watchdog, the world’s mobile phone subscribers and will private banking sector in
Public Company Accounting N remain one of the fastest-growing markets, Hong Kong. Spotlight on
Oversight Board, told Reuters. according to a new report by the GSMA. Hong Kong’s banking sector
There were 1.7 billion unique mobile highlights concerns over high
E
ONLINE EFFICIENCY subscribers in the Asia-Pacific region at the cost/income ratios, which
From 1 July, all Rule 22 R end of 2013, accounting for half of the 3.4 tend to range from 70%
dealing disclosures to billion global subscriber base. The number of upwards, placing pressure
Hong Kong’s Securities T Asia-Pacific subscribers is expected to reach on banks’ cost structures.
and Futures Commission 2.4 billion by 2020. Growth in the next two to
(SFC) must be submitted three years is expected to be
ACCOUNTING AND BUSINESS
ROUND-UP | NEWS 9
TRENDS
WOMEN TO WAIT 75 YEARS FOR EQUAL PAY
In its recently released report, G20 and gender equality, Oxfam International urges G20 leaders to tackle gender
inequality when they meet in Australia later this year. Referring to data from the World Economic Forum’s Global Gender
Gap Report 2012, which surveyed 136 countries, the charity claims women’s pay won’t equal men’s for another 75 years.
WOMEN’S WAGES AS A PERCENTAGE OF MEN’S FOR THE G20 COUNTRIES
80 76.3 75.0 74.3 73.8 73.7 72.9 72.1 69.8 69.1 68.5 67.3 67.1 65.9 65.3 64.4 63.6
60.2
60 57.3
40
20
0
Germany South Africa UK Canada USA Australia Argentina Russia Brazil China Italy Mexico Indonesia Japan India blic of Korea Turkey Saudi Arabia
u
p
e
R
concentrated within Hong MEGA-BANK MUSCLE compensation, could be Foreign Institutional
Kong and serving North-East Three of Malaysia’s largest effective from next year, Investor programme. The
Asian clients. banks are in talks with a view according to economists agreements will help South
to creating the world’s first at Bank of America Merrill Korea become an offshore
IFRS APPROACHES Islamic mega bank. CIMB Lynch. The approach reflects yuan centre and bring
Companies listed on the Group, RHB Capital and the updated international ‘visible’ economic benefits,
Singapore Exchange (SGX) Malaysia Building Society guidelines for national according to a statement
will adopt a financial have received Bank Negara economic account in the issued by the Bank of Korea
reporting framework Malaysia approval to start 2008 UN System of National and the finance ministry.
‘identical’ to IFRS in 2018, discussions. ‘We believe Accounts. Countries including
the Singapore Accounting there is inherent value and the US, Australia, Canada DON’T BLAME FVA
Standards Council (ASC) has that there will be many and Korea have already Fair value accounting (FVA)
announced. ASC chairman opportunities which will arise implemented the changes. is ‘often cast as the culprit’
Michael Lim said that the from this proposed merger,’ for accelerating the 2008-
ASC will continue working said Kellee Kam, group LINKS STRENGTHEN 09 financial crisis, but a
with the Monetary Authority managing director, RHB South Korea and China will new study from Columbia
of Singapore and SGX on Capital. Datuk Seri Nazir introduce direct trading Business School challenges
other related issues; these Razak, group chief executive, between the won and the that perception, arguing that
include whether and when CIMB Group, agreed that yuan and promote greater FVA has advantages over
to extend the new financial there is ‘a prima facie case use of the Chinese currency, other methods of accounting.
reporting framework to other for a value-creating merger following talks in Seoul ‘FVA has been blamed for
entities listed on SGX such as between the three entities.’ between the countries’ the near collapse of the US
real-estate investment trusts leaders. Bloomberg reported banking system,’ said Urooj
and business trusts, and the ACCOUNTING CHANGES that during the visit by Khan, assistant professor
transition arrangements for China’s proposed new GDP Chinese president Xi Jinping, of accounting at Columbia
entities seeking to list on accounting methodology, South Korea also won an 80 Business School and co-
SGX. ‘Singapore has long which would require the billion yuan (US$12.9bn) author of the research. ‘Our
been an advocate of a single inclusion of R&D expenditure quota for domestic investors research demonstrates that
global financial reporting in GDP calculations and to buy securities in China investors’ concerns about
language,’ said Lim. stock options as employee under the Renminbi Qualified FVA’s detrimental effect
ACCOUNTING AND BUSINESS
10 NEWS | ROUND-UP
overshadowed the beneficial many other industry sectors, PwC and Grant Thornton. Chan, partner and head of
role it plays in promoting too – are exposed to financial ‘It is not financial reporting Hong Kong Capital Markets,
timely market information.’ crime risk, said partner that’s the issue, but rather KPMG China, expects that
Marcus McCaffrey, who will wider corporate reporting,’ ‘the remaining pipeline will
ANTI-FRAUD ADVICE head up the practice. explained panel member provide market momentum
Grant Thornton UK is John Hitchins, recently retired in the second half of 2014’.
strengthening its anti-fraud UNBLOCKING BARRIERS partner PwC, in his blog.
advisory services with the A new B20 report, Unlocking FAMILY-FRIENDLY
creation of a financial crime Investment in Infrastructure, IPO PIPELINE ON TRACK EY is Singapore’s ‘best
and disputes practice that will concludes that while the Hong Kong initial public company for mums’, and
build on its existing forensic global financial crisis offering proceeds for 2014 KPMG is sixth, according
and investigation services. has played a role in the are forecast to exceed last to a 2014 ranking jointly
The new team will work growing gap between the year’s HK$169bn, driven organised by the National
alongside the mid-tier firm’s need for infrastructure by a strong performance Trades Union Congress
financial services advisory and the financing to fund in the first half. Excluding (NTUC), Tripartite Alliance
group, providing clients with it – a shortfall estimated listings by introduction or for Fair and Progressive
the resources to mitigate, by Standard & Poor’s to transfers from the Growth Employment Practices and
respond and remediate issues be US$500bn annually Enterprise Market to the Women’s Development
relating to financial crime and – changes to accounting Main Board, there were 24 Secretariat. The 200
complex disputes in the global principles would not be IPOs in the second quarter, nominees were judged based
financial services sector. ‘The the silver bullet which bringing the total in the first on flexible work arrangement
increasing pressure of could make long-term half to 44, with proceeds practices available, variety
regulation and enforcement, infrastructure projects more of HK$80.8bn, KPMG data of pro-family employee leave
set against a dynamically attractive to private investors. shows. This compares well schemes, employee support
changing financial services The report was produced by with the first half of 2013, schemes and infrastructural
market, means all manner of a working group drawn from when 21 IPOs raised a total support. Fathers also got a
financial institutions – and BDO, EY, Deloitte, KPMG, of HK$39.7bn. Rebecca look-in this year, with a new
category, ‘most enabling
companies for dads’. Cham
▼ NEW MARKET Hui Fong, NTUC assistant
Myanmar Accountancy Council has strict rules on secretary-general, said
which companies can perform audit in the country employees are drawn to
organisations that help them
find work-life balance.
ENERGY FOR ALL
Asia ‘can lead the renewable
and sustainable energy wave’
thanks to a clean energy
innovation hub unveiled in
the Philippines. Established
for collaborative research
and located within the Asian
Development Bank (ADB)
headquarters in Manila, the
hub is the third regional
centre, next to Africa and
Latin America, under the
Sustainable Energy For
EY CLAIMS AUDIT FIRST IN MYANMAR
All special initiative of
United Nations secretary-
EY believes it is the first Big Four firm building Mark Campbell told The general Ban Ki-moon.
to offer assurance services in Myanmar, Accountant magazine that this precedent The project combines
via acquisition of local firm EY UTW. would ‘lead to a very large influx of big the resources of the UN
Myanmar Accountancy Council, the audit firms into Myanmar’. Development Programme,
regulatory body, has stringent criteria EY has been offering tax, transaction the UN Economic and Social
on who qualifies to perform audit work; and advisory services in Myanmar since Commission for Asia and the
adding EY UTW to its network delivered April 2013, joining KPMG, PwC and Pacific, and the ADB. ■
EY the necessary licence. Deloitte, along with several mid-tier
ICAEW head of international capacity firms such as BDO and Crowe Horwath. Compiled by Peta
Tomlinson, journalist
ACCOUNTING AND BUSINESS