- Narendra P. Sarda. Bombay Chartered Accountants Society 6 th June, 2014.

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1 - Narendra P. Sarda Bombay Chartered Accountants Society 6 th June, 2014.

2 Why need a Large Firm? Accountancy Profession --- Service Profession --- Should respond to the changing scenario & changing Clients Expectations

3 * Growth of the Indian Economy * Growing size of the clients ( Corporate Sector ) * Increasing Expectations of the Clients :- -- Wide Range of Services. ( e.g. ) -- Industry Specialisation. -- Expertise and Experience in Complex Areas. -- Services to cater multi-locational & multi-national operations. (Boundaries of distance disappearing on account of of developments in Communication and Technology)

4 -- Fast Changing Developments (Year v/s Decade) -- Medical Profession Hospitals Retail Traders Mall Culture -- Capacity Building Measures of ICAI -- Emergence of LLP - alternate legal structure. - cross-professional partnership.

5 * to respond to the changing horizons and expectations of clients * to remain relevant to the clients * to attract best professional talent in the firm. ( professionals in the firm want career opportunities ) * Satisfaction with Status Quo is not enough ( one has to run to retain the present position in this competitive world )

6 * Consolidation and Expansion in the Firm * Pooling of Resources (Networking with other Firms) * Acquisition of Existing Operations * Mergers

7 * Appropriate Mental Attitude -- Open Mind -- Spirit of Give and Take -- Sacrifice of EGO -- Fairness -- Team Spirit -- Organisation before Self -- Attitude in Corporate Sector -- Mutual Growth / Trust / Understanding

8 * Efforts for Integration of - Culture - Conduct - Policies, Systems and Procedures.

9 * Vision : Clarity of long term Objectives Foresight and Long Term Vision Selfless Leadership Essentials for large scale Operations (as discussed in the previous slide) Strategic Planning and Management Decision taking.

10 * MANAGEMENT AND GOVERNANCE Management Governance -- Planning -- Clients & Service Portfolio -- Talent Development -- Infrastructure & Technology Development -- Administration & Management -- Objectives -- Partnership Deed -- Other Governance Documents Policies, Systems and Procedures

11 * Clients and Service Portfolio :- -- Strategy -- Selection of - Service lines and Functions - Client Portfolio - Industry Specialisation - Locations for Services -- Function v/s Industry matrix -- Clients / Engagements Acceptance / continuance Policy -- Review of Clients Portfolio and Service lines

12 * Talent Development -- Service Profession - no plant, tools or raw-materials -- Talent - Partners - Other Professionals - human talent with Professional Skills - Cross Professional Services -- H R Policy - managed by H R Expert -- Reward, Compensation, Service Rules -- Recruitment, Training, Deputation, Skills Development -- Motivation, Encouragement for Specialisation & Personal Development -- Career Plan / Career Counselling -- Organic Growth / Inorganic Growth -- Performance Evaluation - Fairness

13 Infrastructure Development :- -- Long Term Planning (not 2-3 years) -- Ownership / Lease -- Locations Technology :- -- Very essential for growth -- Staying one step ahead

14 Administration and Management :- -- Management Committee (Fair presentation to different Segments ) -- Function Leaders / Industry Leaders -- Service Leaders ( HR, Risk & Regulatory, Finance, Independence etc.) -- Functions v/s Industry matrix -- H R Policy / Talent Management -- Office Rules / Service Rules -- Standardisation -- Policies & Procedures -- Dos & Don ts, Guidelines

15 * Governance :- ( Distinction between Management and Governance ) Governance -- Objectives -- Organisation Culture -- Mutual trust / Understanding / Growth -- Organisation before Self -- Fairness -- Policies, Systems, Procedures

16 * Partnership Deed :- -- Mutual Relationship -- Admission, Retirement, Exit ( including expulson) -- Capital, Drawings -- Remuneration, Share in Profit -- Retirement Age, Retirement Benefits -- Partners Development & Reward ( PDR ) System -- Individual Plans, Goals & Performance Evaluation ( Integration of Individual s Goals with Firm s Goals ) -- Carrier Counselling -- Reward System - Seniority v/s Performance -- Rights and Duties of Partners * Governance Document :- -- Policies, Systems and Procedures.

17 * Policies, Systems and Procedures:- Risk Management Policy :- -- Clients Acceptance / Continuance Policy -- Engagement Acceptance / Continuance Policy -- Engagement Letter Procedure -- Special Procedure where Risk is greater than Normal -- Engagement Quality Assurance Review ( EQAR ) -- Practice Review Regulatory Policy :- -- to take care of all the Regulations affecting the Firm.

18 * Policies, Systems & Procedures ( Contd. ) -- Independence Policy :- -- Financial Conflict -- Conflict of interest in Service -- Chinese Wall conflicting clients -- H R Policy -- Knowledge Management System -- Library -- Consultation Process ( Philosophy Consult, Consult, Consult...) -- Technical Committee ( Firm s view on controversial issues ) -- Planning, Budget, Performance evaluation -- Storage, Archiving & Retrieval Policy