Talking Heads: Reanda International
Reanda International experienced in cross-border assignments
In this Talking Heads Q&A, Reanda International’s Huang Jinhui, Chairman, and Franklin Lau, CEO speak to Zoya Malik about their strategy for growth and expansion
Zoya Malik: How has joining Forum of Firms (FoF) improved Reanda International’s market profile, aligned with your growth strategy and helped with pitching for new business and on-boarding new members?
Chairman Huang Jinhui: Reanda International’s Forum membership demonstrates our strong commitment to audit quality as well as our long-term strategy to drive the consistency of our members’ quality level globally. We manifest the consistency of our members’ quality level globally while our member firms are subject to a rigorous globally coordinated internal monitoring programme of Reanda International periodically. With the Forum membership, we believe this has been deemed as a quality proof to clients which has been very useful for pitching to new and especially multinational clients as well as attracting more membership enquiries from quality firms.
Huang Jinhui, Chairman, Reanda International
ZM: Which advisory services have been most in demand by clients globally? What are contributing factors for this growth?
Chairman Huang Jinhui: Reanda International has strong Audit & Assurance expertise. This helps us in strengthening client’s trust, which is indeed an important contributing factor for the growth of our other professional services, including but not limited to the advisory services. Besides, as Reanda International has strong experience in handling cross-border assignments, particularly giving advice and guidance to clients in conducting cross-border M&A transactions, we have noticed that in fact different types of advisory services have been in demand globally.
ZM: Given the increased scrutiny into audit quality and perceived conflicts of interest between audit and non-audit work, how should your member firms develop their audit practices going forward and what are the staffing and training needs? What is your organisation doing to this end?
CEO Franklin Lau: Our member firms developed their audit practices according to international auditing and accounting standards and to their local regulatory guidelines, that we believe have well addressed the related independence issues. In addition, across the network, Reanda International has provided a technical manual which was updated based on the latest requirements/amendments of ISAs, ISQC 1 and IESBA Code, for the compliance of our member firms. Other than the technical manual, Reanda International also maintained a client database online to assist member firms to avoid threats to independence and potential conflicts of interest. With this in mind, we believe that member firms should continue to comply with the independence requirements in accordance with their local regulations and observe the related Reanda International requirements while they develop their audit practice going forward.
Reanda International has been inviting specialists from various member firms having expertise in different industries to team up and assemble specialised industry expert teams for audit, tax and advisory services. As such, the specialised industry expert teams will become the core team of the respective industries within the network and they will promulgate training across the network. In case of any assignment relating to a particular industry, Reanda International will mobilise the related specialist expert team to assist.
Franklin Lau, CEO, Reanda International
ZM: What are the challenges for your organisation in terms of implementing new technology and software within the tax practice, given it’s a global organisation operating across a multitude of jurisdictions that all have their own tax regimes?
CEO Franklin Lau: Presently we are in the stage of enhancing the network’s audit ability out of the network’s three key services offerings including audit, tax and advisory. While we already have our international tax panel formed by experienced tax specialists from our member firms, we are now inviting experts from member firms to form other tax-related expert groups. As to new tech and software within the tax practice, we shall await the teaming up of our experts and listen to their suggestions accordingly. While many of our member firms have very strong IT services teams, we are confident that, as soon as the related expert teams are teamed up as backed by the strong IT services teams of our member firms, Reanda International shall be full-fledged to implement new tech and software within the tax practice across the global network.
ZM: What is your recruitment and retention strategy in 2022? What do you need to balance going forward in terms of new required specialists in management and in member firms staffing requirements globally?
Chairman Huang: In 2022, Reanda International will continue to look for quality member firms, particularly in the Americas region where Reanda International does not have much presence yet. Presently, we have regional offices in the South-East Asia and South Asia Regions, Asia and Oceania Region, Europe Region and the Middle East and Africa Regions. Whereupon there are members’ requests for new members to meet their client’s needs, our regional offices will coordinate with their regional members and identify suitable candidates. In addition, we are also looking for leaders to head up the advisory division of our global network in 2022.
ZM: What new initiatives do you have ready for roll out in 2022 that will help to streamline operations and help with business referrals and lead generation across your organisation?
CEO Franklin Lau: Reanda International is in the process of developing an automated administration e-platform to enhance our internal communications amongst members as well as between the headquarters and members. This e-platform, will streamline all the network administrative reporting and facilitate information exchange in relation to referral opportunities, which highly enhances the job referral communication efficiency between members. Meanwhile, in 2022, Reanda International will also focus on promoting non-audit services.
ZM: What ROI are you looking for in terms of tech investment and training next year?
CEO Franklin Lau: When it comes to investment in tech and training, we believe the result would be measured qualitatively instead of quantitatively. Hence it is difficult to say convey ROI in terms of our tech investment and training. Certainly, Reanda International will continue to commit our investment in all aspects that will advance the network development. As to tech investment, with the Reanda automated administration e-platform, we believe this will increase the job referral communication efficiency between members hence enhancing the referral volume of Reanda International. While with more training received by our member firms from the network in 2021, we believe this will definitely increase the intrinsic value of member firms hence enhancing the prestige of Reanda International as a whole in 2022.
ZM: What is your opinion of the regulatory environment and ‘ease of doing business’ for foreign accounting firms to enter the China market, for capital availability, competitiveness and openness to regional and international trade?
Chairman Huang: China is a huge country with 34 provincial-level administrative divisions that carry different degrees of regulatory and cultural challenges. A foreign accounting firm is prohibited to perform professional works directly in China, according to the requirement published by the Ministry of Finance of the PRC government, such professional works have to be referred to and conducted by the designated top 100 CPA firms in China. Based on the above business environment, a foreign accounting firm looking for long-term business development in China should think about a strategic cooperation with one of the top 100 firms in China that has sufficient offices opened in major cities across the country. The strategic cooperation can be in the form of member firm relationship within an international accounting network or association. With this relationship in place, the foreign accounting firm would have a very good competitive advantage to roll out its business development in China both in inbound and outbound work as Chinese business enterprises are continuously very active in seeking business opportunities overseas and they are keen to seek a trusted international accounting network or association for guidance. Having a reputable Chinese CPA firm joined as a member is almost a bright-line test.
ZM: What is the state of international stakeholders’ confidence in China’s market vis a vis policy options to cope with the dispute over cross-border audit oversight between China and US companies? How is this playing out for Reanda International Chinese members cooperating in the US and US firms in China?
Chairman Huang: The audit regulatory requirements in China and in the US are different and the related information are made available by the two countries for the understanding of international stakeholders. When international stakeholders are making investments in either of the two countries, we believe that they shall need to fully understand the risks involved. Presently, Reanda International does not have a member firm in the US. However, we believe that, when we have member firms in the US and they have assignments in China, we shall fully cooperate with our US members to develop a coordination mechanism in order to meet client needs, while observing the related regulatory requirements in both countries.
ZM: How is Reanda International involved with cooperating and advocating to the regulator to strengthen audit standards and frameworks?
Chairman Huang: While Reanda International is a member of the Forum of Firms, the Forum membership enables our network’s access and participation in contributing to the global standard setting and regulatory developments in the audit quality context. When Reanda International receives enquiries from the Forum of Firms sent to all its members, we discuss these with our regional offices to seek their comments and contributions. When needed, they will seek guidance and advice from their local regulatory bodies and we compile the reply to the Forum of Firms accordingly.