Like minded experts engage in Nepal at B&B Associates
Zoya Malik, Group Editor, International Accounting Bulletin spoke to BM Dhungana, partner at B & B Associates, Russell Bedford’s member firm in Nepal about the challenges of meeting international standards in accounting and cooperating across the network
Zoya Malik: Which are your main clients/ segments locally and for cross border services internationally?
BM Dhunguna: Our firm, B & B Associates, was established in Kathmandu, the capital city of Nepal, in 2003. Our clientele consists mainly of manufacturing companies, not-for-profit entities, hydro-power and service sector entities. We typically provide services to government entities, public and private companies, charitable and social organisations, UN agencies and multinational companies.
ZM: Which practice lines are seeing most growth in the next two years?
BMD: The service sector in Nepal constitutes around 60% of GDP and at B & B Associates we have seen significant growth in the sector. We foresee continued growth of our practice, mostly in the service sector, in the areas of IS Audit, Internal Audits, IFRS compliance and consulting services.
BM Dhungana, partner at B & B Associates
ZM: What has been the objective of joining Russell Bedford International for your firm in Nepal? What are your expectations?
BMD: The primary objective of joining Russell Bedford is to enhance our knowledge pool on key practice management issues, while adding value to the domestic market by providing quality international services to our clients. We believe that our membership will enable us to attract new clients, while also providing avenues for exploring new service lines.
Through our membership, we expect to gain access to first-hand knowledge of regulations, cultures and customs beyond home territories. We believe that our association with the Russell Bedford network will enable us to engage with like-minded experts and specialists across the globe. Equally our international network membership will help us to distinguish ourselves from other firms in Nepal, due to the enhanced quality of services, service delivery and professionalism that we are able to deliver via the network.
ZM: What is the support and investment that will be made by Russell Bedford in this new partnership?
BMD: Our membership includes access to a host of resources including regular insight publications, a schedule of training opportunities and webinars and networking events to support relationship building among colleagues around the globe.
The network also provides vital support in facilitating introductions to our colleagues in other parts of the world. This guarantees a smooth transition between support teams who need to collaborate to provide seamless end-to-end services to clients.
ZM: What are challenges for accountants entering firms in Nepal in terms of training, remuneration and stability?
BMD: In Nepal, Continued Professional Education (CPE) programmes are conducted by the Institute of Chartered Accountants of Nepal for all its members. The CPE programme is quite traditional in nature and could benefit from being tailored to international standards and covering more of the latest developments in the accounting profession.
In terms of remuneration, Nepal is one of the lowest paid countries in the world, with per capita income of around US$ 1100 per year. Attracting and retaining talent is a big challenge for accounting firms in Nepal. Skilled and trained graduates are more attracted to jobs in the financial sector (mainly banks and insurance companies), the development sector and multinational companies, rather than pursuing careers in accounting firms.
ZM: What are challenges for accounting firms in Nepal to meet international audit standards?
BMD: The Institute of Chartered Accountants of Nepal (ICAN), a government established independent body under the Nepal Chartered Accountants Act of 1997, regulates and monitors the accounting and auditing profession in Nepal.
The Government of Nepal created the Auditing Standards Board in March 2003, under the Nepal Chartered Accountants Act of 1997, to deal with the development of auditing standards.
One of the objectives of ICAN is to deliver Nepal Standards on Auditing (NSA), drafted by the Auditing Standards Board (ASB). ICAN is a member of IFAC and auditing standards issued by ICAN in Nepal are in line with International Auditing Standards.
Professional fees paid to auditors in Nepal are among the lowest in the world. Quality aspects and compliance with auditing standards risk being compromised in some firms due to fee constraints. Another challenge is the enforcement of an effective national quality assurance system for audit firms and their members. There is also a lack of adequate training and exposure to best practices.
ZM: What is your plan for lead generation for Russell Bedford International?
BDM: We aim to use the Russell Bedford brand to attract both domestic and international clients. Collaborating with other Russell Bedford members on delivering best-in-class services to our mutual clients, is also top of our agenda.
Our association with Russell Bedford brings with it a responsibility to deliver services professionally to maintain the reputation of the brand, a responsibility that we take seriously. We plan to collaborate with other Russell Bedford members in providing services to our clients in Nepal, particularly in sectors where our global colleagues can bring greater expertise and experience – a key advantage of our network membership.
ZM: How are you working with the regulator to improve credibility of the accounting industry in Nepal?
BMD: We regularly engage with the regulators like the Central Bank, Insurance Board, the Institute of Chartered Accountants of Nepal in different formal and informal forums. A lot of work needs to be done in gaining public confidence and enhancing the credibility of the accounting profession in Nepal. We would welcome more intensive leadership from the Government and collaboration with ICAN, regulatory bodies, and the private sector, including SMEs, to design an awareness program on effective implementation of Auditing and Accounting Standards. Providing ICAN with adequate resources for improving the credibility of the accounting profession will also help to advance standards at practice level.
ZM: How has Covid-19 impacted your business operations and service delivery to clients?
BMD: Like other economies we are also facing severe problems due to Covid-19. In 2020, the GDP growth rate in Nepal was -2.12 %. We are currently experiencing a second wave of Covid infections, which is negatively affecting business as the Government has announced another lockdown for two weeks.
Although we have not been able to expand our operations over the past eighteen months, we have learnt to adapt and survive. Due to travel restrictions and new circumstances, previously completed engagement planning and risk assessment procedures were reassessed and we have revised our planned approach and methodology. We have also spent considerable resources and time on developing our IT infrastructure and training of staff.