The deafening call to audit the auditor in recent years (Malaysia has had its fair share of accounting scandals) has damaged the profession’s credibility somewhat. How has that made your job tougher? – Mohamad Naimi, Alor Setar
It is all a matter of trust and winning the public’s trust is no easy thing in these crisis-ridden times.
Few professions can truthfully claim to be ‘trusted’ by the public at large. To accountants and auditors, public trust is the cornerstone of our livelihood.
Therefore, the accounting and corporate governance scandals which hit our country in 2007 were a wake-up call for us all.
It was clear that, sadly, the public no longer trusted our self-regulatory regime by which we police ourselves.
This is why the accounting profession strongly supports the establishment of the new Audit Oversight Board (AOB) for auditors of public-listed companies.
A well-led AOB will enhance standards in PLC auditing, and with it, the credibility of the profession which we have devoted our working lives to building.
How have the collapse of Enron and the demise of Arthur Andersen in 2002 affected PwC Malaysia’s client acceptance/retention policies and process? – Mohamad Naimi, Alor Setar
PwC in Malaysia is part of a global network of firms, which adheres to a set of quality standards and policies.
Our risk management and independence policies, including those for client acceptance/retention, haven’t changed markedly because of the Enron/Andersen debacle.
What has changed is a greater requirement for documentation of audit, which accounts for a considerable amount of the time we spend on our work.
I view these changes positively: every profession has to get used to more stringent rules, documentation and regulation (especially regulation), in order to win public trust. Doctors, lawyers, engineers and investment bankers probably face this.
But compare those professions in Malaysia with their peers in London or Sydney: do they have the same level of oversight, regulations and training requirements as their peers elsewhere? If not, why not?
People who work in PwC follow the same rulebook whether they are in London, Sydney, New York or Kuala Lumpur. That’s why this is a global profession.
An economic meltdown is bad for everyone. How bad has this slowdown been for your firm and how have you tried to overcome that? – Tan Chee, KL
Surely very few firms and companies are insulated from the impact of the Global Financial Crisis (GFC).
PwC is no exception, both in Malaysia as well as globally.
It is no longer true that professional services firms are naturally hedged against recession – we are a little, but not much.
So in PwC we have worked on both the top line and the bottom line. It is the partner’s job to bring in work, and my partners have done tremendous service in this regard.
We have had to take cost out of the system, but PwC depends on its people. We have cut costs where we can.
Our mantra is: keep the team together. We want to survive as a team. If that means sacrificing in other ways, we will do it. Our people deserve this, and so do our clients.
I must pay tribute to our clients. They are a very special group of people, and I’m certain they will recover fast when a fair wind returns. When that happens, we mean to be there, fully staffed and ready to serve them anywhere in the world.
Many economists are of the opinion that the current economic crisis is mainly due to the Mark-to-Market accounting policies. What is your view on this? – William Teh, Penang
Like many people, I have been turned into a business/economics news junkie since the crisis began. I have read newspapers from all over the world, and I’ve read books. I have tried to fathom the difference between freshwater and saltwater economists. I have rediscovered Keynes, who had been buried (in an academic sense) long before I went to university.
I have even attended economics dialogues, like those given by the many eminent economists at the recent, and excellent, World Capital Markets Summit in KL.
But try as I might, I haven’t seen anything written by a pukka economist about ‘mark-to-market’ (MTM), or ‘Fair Value’ as it is often called, either for or against.
I can only deduce that economists do not blame MTM for the GFC. Instead, they appear to blame other things, like global spending imbalances, regulation, remuneration practices, bad corporate governance, and greed.
My reading was not in vain, however. I did notice consistent comments made by one gentleman: not an economist, but a banker. His name is Lloyd Blankfein, and he is CEO of Goldman Sachs.
In an article in June this year in which he listed the lessons of the GFC, he wrote:
“Last, and perhaps most importantly, financial institutions didn’t account for asset values accurately enough. I’ve heard some argue that fair-value accounting – which assigns current values to financial assets and liabilities – is one of the major factors exacerbating the credit crisis.
“I see it differently. If more institutions had properly valued their positions and commitments at the outset, they would have been in a much better position to reduce their exposures.”
MTM is not perfect. But it is the best system we have devised yet to “tell it like it is” when it comes to accounting for the complex financial instruments which litter our financial world.
What was it like growing up in a family like yours which had produced three sons, all of whom are famous in their respective fields? What do you think made all of you such? – Sam, Penang
We left home at quite a young age, and all three of us attended different schools for most of our youth. Our formative years were spent in very different circumstances from each other.
All of us returned to Malaysia, despite the odds being stacked against that happening.
I have great admiration for my brothers. Their writing amazes me: and they are certainly not bland. Their success is well-deserved and makes me very proud. I’m sure our late father would have been too.
What are the more important factors to look into before a company gives attention to
corporate social responsibility? – Celine Tan, Petaling Jaya
First, get on and do it. Don’t over-analyse. You and your colleagues will learn as you go along. It’s important to take that first step. For PwC, our Community Outreach Programme (COP) got us started, and we branched into many other areas as a result of the experience we gained.
Second, listen to your people. COP was a partner’s brainchild, but all our ideas since then have come from the ranks. There is nothing worse than the top man or woman forcing all the staff to support his/her favourite charity. That is so feudal, and when that top man/woman goes… the programme is history.
Our staffers chose Mercy Malaysia to work with, did a major study, and then convinced us partners to go for it. When oldies like me move on, this kind of initiative will go on.
Third, be holistic in your Corporate Responsibility (CR) approach. A modern CR programme is not just about the community. It is also about the environment, the workplace, and the marketplace.
I sound like PwC has done it all. We have not, and we have much to learn. But we have started the “baby steps”, and our people reward us for it: 82% of PwC people in Malaysia indicated in our annual survey this year they are satisfied with the actions the firm is taking to be socially responsible. That’s one of the highest in the ‘PwC world’.
What do you find most challenging in your job as an accountant? – Juliana Idris, KL
The interesting thing about being an accountant is that it opens up many doors. Of course, we would like our people to stay with us, but PwC is in many ways like a university, turning out accountants, tax professionals and advisory specialists.
When I think where PwC alumni have gone to over the years, it is truly a myriad of careers, in so many countries.
This professional services environment teaches people so much about so many businesses, in such a short time. I often think of it as the best business school in Malaysia.
What I have found most challenging is that the nature of the challenges has subtly shifted as I moved up the ladder. Transitioning from stage to stage takes some getting used to.
In my early years, it was more of the technical aspect of work, and doing work well within the finite resources and time given to me.
Later, the emphasis moved to communicating, especially in writing, whilst “dealing with people” started to become part of the work. And later still, dealing with people became by far the biggest challenge, which is where I am at today.
People always see accountants as nerds or boring people. Are you? – Brian Kong, Penang
Yes, I am (you must be a lawyer!)
After a long day at work, how do you relax and unwind? – Depam Rathakrishnan, KL
I walk, and I actively support my clients – watching their TV programmes or logging on to the Internet to Facebook and Skype with my older children (Okaylah, I don’t. They won’t teach me how).
Where do you see yourself in the next 10 years? Will you still be in service with PwC? – DR, Kuala Lumpur
I will always be ‘in service’ with PwC, emotionally speaking.
Physically, however, I hope to be retired and spending my evenings tucked up in bed with a cup of hot cocoa. And supporting my old clients’ TV and Internet services.
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