Tham Sai Choy says a turbulent 20 years has dented the accounting profession’s reputation in Asia-Pacific and it now must act to rebuild.
Tham Sai Choy is counted as a major influencer in South-East Asia, and is well-known and respected for his deep insights and thought-leading views on the Singapore and Asian accounting profession. When he speaks his mind, people pay attention.
In today’s “new normal” business environment, Tham, the chairman of KPMG Asia Pacific and managing partner of KPMG Singapore, identifies the competing needs of professions and industry as a potential stumbling block.
He says accountants need to recognise the tension between “being both in a profession and in an industry” – that is, serving the professional calling of meeting client needs while also maximising financial key performance indicators (KPIs).
“The profession loses its way if ever its primary duty of meeting client needs loses out to the urgency of KPIs,” Tham says.
Difficult operating conditions over the past 20 years have resulted in a perceived lack of trust in business and in how the economic system generates jobs and distributes wealth, he says. Things first got tough during the Asian financial crisis of 1997, and when severe acute respiratory syndrome (SARS) struck in 2003 it slowed many Asian economies. Just five years later came the global financial crisis.
Tham says that perceived lack of trust is significant for the profession because its stock in trade is exactly that: trust and confidence.
Tham Sai Choy, Head of KPMG Asia Pacific
“It’s about bringing trust and confidence to financial reporting, to enable capital markets to function, to enable wealth to be invested, to raise the quality of life for even more people – that is what the accounting profession does,” he says.
“Therefore, there is a bigger need for our ability to inject confidence and trust into the financial reporting process and in terms of how businesses work.”
With more regulations being pushed globally and raising the bar on controls and rules, accountants are under even greater pressure to ensure compliance.
In Europe, where the financial crisis lingers, experts are debating the type of regulations needed to reinvent the audit profession. Tham says any decision will have “an impact on how the accounting profession is structured and operates”.
He adds: “The professional setting requires that the profession owns and writes the rules. [That it] thinks very hard about what is right and wrong, what is consistent with the calling of the profession, as opposed to what is merely consistent with the rules.”
Tham is well positioned to understand and interpret some of the mega trends facing the profession – he has more than 30 years’ audit and financial advisory experience in Britain, Australia and Singapore. He joined KPMG in 1984, rising to regional chairman in 2013, overseeing 34,000 staff.
Among other roles, Tham is on KPMG’s steering committee that responds to audit reforms being developed in Europe and was on the government-driven Committee to Develop the Accountancy Sector (CDAS) in Singapore.
In 2000, the CDAS committee issued a 10-year blueprint to turn Singapore into an international accounting hub, with a focus on developing accountancy skills and talent, and offering specialist services including business valuation, internal audit, risk management and tax.
There is a bigger need for our ability to inject confidence and trust into the financial reporting process and in terms of how businesses work.– Tham Sai Choy
The Singapore Accountancy Commission was formed to implement the CDAS recommendations and Tham now sits on its board.
He says the implementation needs tweaking to account for the changing nature of internal audit, for instance.
“Globalisation of service industries would allow you to think not just in terms of hiring locally but instead hiring in the most cost advantageous place,” Tham says.
“In emerging trends like these, and Singapore not being a low-cost proposition, there is a need to re-assess how that is going to operate and the role Singapore can play in the globalised internal audit profession.”
He says another promising and developing area where accountants can add value is risk management. The field was essentially born out of the Enron crisis in 2002 and again came under the spotlight with the collapse of Lehman Brothers in 2008.
The big failures in the banking industry that followed affected financial institutions and borrowers, and discussion is now concentrated on what new risk management processes need to be implemented.
Singapore financial institutions, he notes, are considered among the best managed in terms of risk and are viewed as among the safest banks in the world.
“By reputation, we are well placed,” he says.
“By regulations, we are well positioned because our regulations have been geared towards a balanced view of business opportunities and managing risk. With the body of skills that we have out of Singapore, we are exceedingly well placed as a centre for risk expertise.”
Tham says trends emerging from the evolving business environment represent opportunities – from audit independence to ethics or value relationships – to further develop the accounting profession.
“Some of the most enviable client relationships around this region are in the trusted relationships that accountants in [the]Asia-Pacific have with their clients, with features of professional independence, professional pride and trust and mutual respect,” he says.
Attracting and retaining good and committed new talent is a struggle for some accounting firms in the region.
However, Tham thinks it’s a matter of getting the right mindset: attraction and retention of talent starts with making people the central focus of the organisation. He believes that good people attract good people and this will form the foundation for everything else.
“Being part of the profession offers learning opportunities that cannot be imagined until you are part of the intensely curious environment that marks the profession,” Tham notes.
“Being in the profession is about passing skills to the next generation in a very open and inclusive way. Therefore, it is a great way to learn.”
Melvin Yong is CPA Australia’s general manager – Singapore. The CPA Australia Singapore office is celebrating its 60th anniversary this year.
The man from KPMG
Tham Sai Choy is managing partner at KPMG in Singapore and regional chairman for KPMG Asia Pacific. As a member of KPMG’s global board and global executive committee, Tham plays a key role in the firm’s development. As the head of the Singapore firm he leads multinational and multidisciplinary teams to support Singapore’s largest companies and global corporations investing in Asia.
He started with KPMG in 1984 and by 2013 had risen to be regional chairman, responsible for more than 34,000 staff.
Asia-Pacific is the world’s fastest growing region for international accountancy networks. China, Australia and India are already significant contributors, but the Singapore Accountancy Commission (SAC) wants to transform Singapore into a “leading global accountancy hub for the Asia-Pacific region by 2020”.
The Big Four firms are already well established in the region, but true growth in the sector will be achieved by developing a stronger international outlook in terms of services offered and professional development.
Singapore aims to provide expertise in risk management, tax and business valuation, while leaving the more simple transactional parts of the accountancy process to lower cost providers such as India. The plan is part of a broader strategy to attract capital and companies to list on the Singapore Stock Exchange.
Roger Simnett, from the University of NSW’s Australian School of Business, says Singapore is ahead of rivals Hong Kong and Australia. The city state is trying to position itself as a Westernised gateway into Asia, whereas Hong Kong considers itself the gateway to China.
Singapore is also considered to be more progressive, particularly with regard to developments such as integrated reporting. “If initiatives like integrated reporting get up then they will have a first-mover advantage,” says Simnett.
In 2008, Singapore’s accountancy market was worth just US$862 million, compared with US$30.8 billion across the region. But it has undergone exponential growth since then, and significantly more is expected, Simnett observes.
This article is from the June 2014 issue of INTHEBLACK.