Financial ExpertSpeak: Advisory services represent the future of accounting
Hans Van den Besselaar, Chairman, CPA Associates International, spoke to AfricaMoney on how the way forward for accounting professionals is adding value with advisory services, and not just plain-vanilla auditing and compilation of accounts. (Image: CPAAI)
Hans Van den Besselaar, Chairman, CPA Associates International, spoke to AfricaMoney on the sidelines of the CPAAI conference which took place in Mauritius earlier this month. Our financial expert cautioned that the way forward for accounting is about giving added value to the client in terms of advisory services, and not just plain auditing and compilation of accounts. He also touched upon expanding his association’s base in Mauritius, since the island economy has a lot of business going on with the Europe, the Middle East and Africa (EMEA) region, and especially with Africa.
Edited excerpts from an exclusive interview:
Please tell us about your experience with holding the CPA Associates International conference in Mauritius.
I think it has been a great conference, which has to do with the fact that we have two diverse regions coming together: EMEA and Asia Pacific. The two regions last came together for our association’s conference four years ago in Dubai. It is great for the people from our region, the Middle East, to meet up with other people from Asia-Pacific regions like Indonesia, Japan and also Mauritius, because we have a lot in common despite cultural and linguistic differences – and it is important for such diverse regions to come together and share their experiences. For instance, Latin America is a cohesive region as a largely Spanish-speaking bloc, apart from Portuguese-speaking Brazil of course. Then again, if you look at the North American region, there too United States and Canada have much in common. But, in EMEA and Asia Pacific we have a very diverse regional bloc coming together and it is great to share experiences and thoughts from such different backgrounds.
Also, you mentioned at the opening ceremony of the conference that CPAAI would like to increase its membership base in Mauritius. Could you expand on the reasons?
We wanted to have this conference at a venue close to our region, close to Africa. I know that Mauritius has a long-standing tradition in the offshore industry, so it would be great to expand our base here because of course, there is so much business going on with Asia, particularly India. At the same time, Mauritius also has a lot of business going on with our region – EMEA, especially Africa. That is why we thought it was a great venue for all regions to come together for the conference.
Mauritius signed the Foreign Account Tax Compliance Act (FATCA) in December last year. What are your views on the FATCA and how can it help the island economy as it gears to become fully tax compliant?
I think that it is important for Mauritius to provide transparency and the road has indeed become quite transparent with regards to identifying any misappropriation of funds for money laundering or terrorist financing. We see all these measures like FATCA being implemented to crackdown on money laundering and terrorist financing, and this is of course coming largely from the US. If you want to be a professional in our industry, certainly it is good to have an end-to-end implementation of these exacting regulations. Also, for Mauritius to maintain a good reputation and not to be considered as just another offshore tax haven, it is important to be compliant with the latest regulations.
With more and more focus on sustainable development, is green accounting expected to gain increasing prominence going forward?
It depends on what you think green accounting is all about. What I see is happening is certainly a lot of digitalization going on within the accountancy domain, which you could say is one face of a green economy. Because, if people can stay home and avoid fuel-intensive commutes and organizations can sanction work from home and not build energy-intensive offices, it will also help the environment. At the same time, it is also a challenge because people in the accounting world will have to reinvent themselves and try to explore new fields like advisory services as the world is moving rapidly towards digitalization.
As a former chairman of the CPAAI Europe, Asia-Pacific and Africa, please provide your opinion on accounting practices in the Asia-Pacific and African regions.
We had a speaker at the conference who explained accounting practices here in Mauritius. I have been to Saudi Arabia to find out how they do auditing there and I found out that they draw reference from the practices in Tunisia, Germany and US. When I hear of issues like transfer pricing in accounting in Mauritius, it becomes a small world because we are looking more and more like each other whether it is about compliance with FATCA, ensuring tax compliance with OECD norms or adherence to sound accounting practices. Essentially, we are all coming together on the same plane because of globalization.
Can you tell us more about the CPAAI international conference which is set to be held in Amsterdam next year?
Amsterdam will see the entire association coming together from all corners of the world. There will be managing partners coming from the US and Latin America, besides the EMEA and Asia Pacific for which our annual meeting just took place in Mauritius. The Amsterdam conference will be mainly about what is happening in the accounting profession around the world. We will also take up issues like succession planning because our association sometimes loses members because of mergers, and the company that has taken over the other accounting firm is already a member of our association. Recruitment of new members is an important topic but it is also important for our existing members to learn about how they can improve and expand their practice. That is our mission as an association, and that is why the international conference is important as those issues will be touched upon and tackled in-depth.
Finally, the theme for this year’s conference being ‘Challenges facing the accounting profession’, could you please elaborate on the way forward for CPAs and Chartered Accountants globally.
What is very important for accountants in particular and the advisory services industry in general is that they stand in front a mirror and look at what is happening because it is very hard to predict how the accounting world will look like in the next five years. We can only look at a two to three-year horizon with any degree of accuracy. In that horizon, it is very important to look at current trends to forecast the future. For instance, you can already see that in the commodity industry, because of digitalization, less and less manpower is needed. To retain profit margins, you have to work towards a lean organization which translates into supreme efficiency at all levels. At the same time, accounting is also about giving added value, and not only auditing and compilation of accounts. It is about giving your clients the advice they need; otherwise, a client can today compile his own accounts thanks to easy-to-use accounting software like QuickBooks.
If you have a client with international businesses, then how would you optimize his tax position? How can you prevent reassessments with regards to transfer pricing? The advisory services is where we need to reinvent ourselves as accountants in order to practice in specialized branches such as an accountant in transport or medical services, for instance, and differentiate our services from each other, and finally, boast operational excellence in a particular commodity domain. We have been spoiled in the past because business was so good, especially in Europe. But, we certainly do not have growth rates of 6-8% like the emerging countries such as Brazil, China and India, among others. In our traditional world, the pressure is high to even survive and retain existing profit margins. I think that customer intimacy is certainly going to be crucial to make you stand out from other firms. That is the reason we had this conference, to make everybody aware of these subjects so that they start to think about them and then we can help them expand and improve their practice, with inputs from external speakers.
- By Marie-Lorry Coret and Cecilia Samoisi