Author Archives: Evelyn Akinsanya

UHY, the international accounting and consultancy network, has appointed the Chief Operating Officer of US member firm UHY Advisors, Inc., Rick David, as the new chairman of UHY.

Rick started his career in the audit practice of one of the ‘Big Four,’ where he practiced for 30 years. He joined the UHY Board of Directors in October 2012 and served as Treasurer of UHY from 2015 to 2018.

As well as being a well-respected auditor and business adviser, Rick also has experience as an accountancy profession regulator and standard setter.

During his more than 40-years’ experience in the industry, Rick has worked with a wide range of clients from multinational corporations to smaller entrepreneurial enterprises.

He also contributed to the Accounting profession through his service on the Michigan State Board of Accountancy and the Professional Ethics Executive Committee of the American Institute of Certified Public Accountants (AICPA).

Rick comments: “Being chairman of one of the largest accounting and consultancy networks in the world presents a really exciting opportunity.”

“We are already seeing a large increase in cross-border work coming to the network and that is something that we intend to build on. More of our clients want our member firms to represent them globally and that is what this network facilitates.”

One of Rick’s key priorities during his time as chairman is to expand on the strong links between the member firms across the UHY network and will look to build on the increased flow in referral work between countries to enhance the knowledge shared between local offices. This includes expertise in many newer technological developments taking place in the industry.

Says Rick: “The growth in innovative new accounting practices, integrating AI and data analytics for example, are opening up a range of possibilities for the profession – to do work more efficiently and rigorously. These developments have the potential to lead to dramatic improvements in the audit process.”

“The UHY network gives member firms the opportunity to share knowledge of new developments with offices across the world. Utilising these links also allows us to develop the next generation of leaders in the industry.”

“With a more globalised and connected world than ever, the industry has to ‘think local, go global.’ The UHY network is a key vehicle to help us build relationships with clients and serve them by tapping into that wider bank of expertise across the world.

Rick takes over as Chairman from Bernard Fay, managing partner at UHY Fay & Co, UHY’s Spanish member firm and one of the top 20 leading firms in Spain.

Notes for Editors

UHY global press contact: Dominique Maeremans on +44 20 7767 2621

Email: d.maeremans@uhy.com – www.uhy.com

Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 (0) 20 7645 3636, +44 (0)7860 657 540 or email peter.kurilecz@mattison.co.uk

New member firm in Sri Lanka joins the UHY network

We welcome, Centra Management Associates, our new member firm in Sri Lanka, to the global accountancy network UHY, extending our coverage within the Asia-Pacific region.

Centra Management Associates, with a team of 41 including two partners, is based the capital city of Colombo with another office in Kandy, and was established in 2012. The firm provides a full suite of audit and assurance, accounting and business advisory services to a diverse portfolio of SMEs to large multinationals from predominantly the following sectors: manufacturing, services, construction and real estate, pharmaceuticals and non-governmental organisations and associations.

Partner, Abdul Sathar Mohamed Ismath of Centra Management Associates comments: “Our country is a success story under development, whilst facing important political and environmental challenges, Sri Lanka is transitioning to a more competitive, inclusive, and resilient economy. Our firm has joined the UHY network for many reasons. The global presence of the network combined with the expertise and knowledge of UHY’s colleagues around the world not only strengthens our own capabilities, locally and internationally, but also these of our clients and their operations.”

Bernard Fay, chairman of UHY comments: “We are delighted to welcome Centra Management Associates to the UHY network. The firm’s membership reinforces our footprint in the Asia-Pacific region and strengthens UHY’s regional market expertise and capabilities to support clients’ needs and opportunities.”

The firm is in the process of adopting the UHY branding.

Liaison office for Centra Management Associates

Contact: Partner, Abdul Sathar Mohamed Ismath on +94 777 536 646,

Email: partner@centramgt.com,

website: http://centramgt.com

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621

Email: d.maeremans@uhy.com – www.uhy.com

European* companies face taxes as a percentage of the price of fuel on average 18% higher than the world average, putting them at a serious disadvantage and potentially risking economic growth, shows a new study by UHY, the international accounting and consultancy network.

UHY explains that on average taxes comprise 59% of the cost of the price of petrol and 52% of the cost of the price of diesel, compared to the global averages of 50% and 44% respectively.

Taxes amount to 60% of the cost of diesel in the UK, the highest in the study, and 53% of the cost in Germany.

In many major economies outside of Europe, taxes make up significantly lower proportions of the price of petrol and diesel, including:

• Japan, where 42% of the cost of petrol and 33% the cost of diesel is from tax
• Canada, with taxes making up 35% of the cost of petrol and 32% of diesel
• United States**, where taxes comprise 17% of the cost of petrol and 18% of diesel

Higher fuel taxes means that the cost of filling the tank*** of a Ford Transit van with petrol in Europe – indicative of a typical business expense – amounts to USD$135 on average. This compares to a global average of USD$111.

UHY explains that higher fuel duties and taxes in Europe are the main contributor to higher fuel prices for petrol, diesel and Liquefied Petroleum Gas.

The cost of filling a tank of a Ford Transit with diesel is 24% higher on average in European countries. As diesel is used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses.

It is also 2% more expensive in Europe for Liquefied Petroleum Gas (LPG), a more environmentally-friendly alternative to petrol or diesel.

Bernard Fay, Chairman of UHY, comments: “Higher fuel taxes hit almost all businesses, and they can ultimately impede economic growth.”

“For any government, taxes on petrol and diesel are a key tool for helping to cut greenhouse gas emissions and can be used to fund infrastructure spending. However, for businesses, especially small and medium enterprises (SMEs), they can represent a significant operating cost, especially in the retail and distribution sectors.”

“There needs to be a balance to ensure fuel and tax costs do not become prohibitive. The relatively lower rates in major developed economies, most notably the United States, compared to its international competitors in Europe shows that a balance can be struck.”

“Governments can consider initiatives such as freezing fuel duties or even cutting the rates. There needs to be greater international cooperation to ensure there is not too much discrepancy in fuel prices between different countries.”

UHY studied fuel taxes and prices in 24 countries around the world, looking at the cost of petrol, diesel and LPG/Autogas and the percentage of the price that came from tax.

France ranked the highest for tax comprising the largest percentage of the total price of petrol – 64%. Denmark ranked the most expensive in the UHY study for the overall cost of filling a tank with petrol – costing USD$160.

UHY adds that fuel can also be hit by a range of different taxes. In the Republic of Ireland, for example, there are three taxes on fuel, with Value Added Tax (VAT), the Excise and Carbon Tax, and the National Oil Reserves Agency (NORA) Tax.

There are also three fuel taxes in Poland, with VAT, excise duty and a tax fuel surcharge, with certain subsidies available for farmers.

However, in 2018, the Polish Government plans to introduce a fourth levy on fuel – an additional surcharge of 3 USD cents per litre – used to fund the development of electric forms of transport.

Piotr Wozniak of UHY member firm UHY ECA Group in Poland, comments: “While wanting to fund eco-friendly projects is a worthy endeavour, too high a level of taxes can discourage business investment.”

“Many emerging markets around the world are focused on ways to help businesses lower their operating costs. As a result, Poland could be at risk of losing business to rival economies with cheaper fuel taxes. The Government should consider what possible subsidies it could offer.”

In the United States Federal taxes on gasoline average just slightly over 18 cents per gallon, with 60% of all revenue raised spent on highway and bridge construction. Only 27, out of 50, states currently impose taxes on LPG.

UHY explains that in the US funds raised from fuel taxes can be used to fund a wide range of initiatives beyond road and infrastructure improvements to include educational funding.

Scott Miller, National Petroleum Group Leader of UHY member firm UHY Advisors in the United States comments: “Lower taxes levied on fuel can be a powerful stimulant to increasing economic growth. It is a cost factor that affects virtually every business.”

“While the price of petrol is dynamic and can vary across individual states in the US, the trend is clear. The overall level of taxes levied on fuel tends to be lower outside of Europe. That may be a factor in underlying the US’ strong economic growth.”

Filling the tank of a Ford Transit with petrol – proportion of cost made up of fuel cost and tax (Major economies and world averages)

Filling the tank of a Ford Transit with petrol: breakdown of cost of fuel and tax

Filling the tank of a Ford Transit with diesel: breakdown of cost of fuel and tax

Filling the tank of a Ford Transit with Liquefied Petroleum Gas (LPG): breakdown of cost of fuel and tax

*EU countries

**US figures based on averages across US states

***Tank size: 80 litres for petrol and diesel, 72 litres for LPG

****Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states

Notes for Editors

UHY global press contact: Dominique Maeremans on +44 20 7767 2621

Email: d.maeremans@uhy.com – www.uhy.com

Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email peter.kurilecz@mattison.co.uk

About UHY

Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 320 major business centres across more than 95 countries.

Our staff members, over 8,100 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.

UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org

New member firm in Georgia joins the UHY network

We welcome, GEWORD, our new member firm in Georgia, to the global accountancy network UHY, extending our coverage within the EMEA region.

GEWORD, with a team of 30 including two partners, is based the capital city of Tbilisi, and was established in 2010. The firm provides a full suite of services including audit, tax, bookkeeping, accounting, management consultancy and legal services to a diverse portfolio of local and international clients from Georgia’s main industry sectors; energy, construction, transportation, hospitality and retail.

Partner, Kakha Khmelidze of GEWORD comments: “Over the last decade, Georgia’s economy has grown at an average annual rate of 5%. It has worked hard to liberalise trade with the European Union (EU) and improve customs efficiency and infrastructure reliability, aspiring to become a world leading business cluster. Our firm has joined the UHY network for many reasons. The UHY branding, quality standards and integration with the UHY community will give us a great opportunity to expand our own local and international footprint. The global presence of the network combined with the expertise and knowledge of UHY’s 8,100 people around the world not only strengthens our own capabilities but also these of our current and potential clients and their operations.

Bernard Fay, chairman of UHY comments: “We are delighted to welcome GEWORD to the UHY network. The firm’s membership reinforces our footprint in the EMEA region and strengthens UHY’s regional market expertise and capabilities to support clients’ needs and opportunities.”

The firm is in the process of adopting the UHY branding.

Liaison office for GEWORD

Contact: Partner, Kakha Khmelidze on +995 32 2 13 15 41,

Email: Info@geword.ge

website: http://geword.ge/

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621

Email: d.maeremans@uhy.com – www.uhy.com

The fintech revolution shows no signs of slowing. Should accountants be worried?

In February the state cabinet of India’s Mumbai Metropolitan Region approved a policy that aims to make the Indian city one of the world’s great financial technology (Fintech) hubs. The policy hopes to support the creation of 300 Fintech start-ups, through a venture capital fund, subsidised co-working space and other inducements.

The ambition is easy to understand. Fintech is bringing major investment and significant numbers of highly skilled jobs to established hubs like London, Toronto, Stockholm and Tokyo. The value of global investment in Fintech start-ups is projected to grow to USD 8 billion in 2018, up from USD 3 billion in 2013. Mumbai aims to be a top five Fintech hub within five years.

Sunil Hansraj, joint managing partner at UHY member firm Chandabhoy & Jassoobhoy in Mumbai, says: “At a recent demo day in Mumbai the 11 start-ups that took to the stage showcased original technologies in financial services, with propositions ranging from blockchain-based identity solutions to AI-driven investment management solutions. These companies are becoming increasingly popular in India and fast providing an option for the use of financial services. Given the thrust given to start-ups in India and the encouragement of ‘Digital India’, I do believe these are here to stay.”

A DIGITAL REVOLUTION

The excitement about Fintech is justified. Financial technology, developed by a new breed of tech-savvy entrepreneurs, is changing the face of financial services in all sorts of ways, from mobile payments to online bookkeeping. It takes in wealth management apps, private online banks, direct lending platforms, blockchain networks and online credit scoring systems. A digital wallet can now connect all a person’s financial services into a single go-to place online, while another app creates personalised financial plans in minutes. There are few areas of financial services that are not at risk from Fintech disruption.

Traditional firms are aware of the threat. A 2016 report found that a large majority (83%) of leaders in financial services firms believed part of their business was at risk of being lost to Fintech companies. Last year, Bank of England Governor Mark Carney warned that new financial technology could damage the business model of traditional banks.

Accountancy, too, is being fundamentally changed by new digital technologies. Software applications like Xero and FreeAgent are giving small and medium-sized businesses access to secure and comprehensive accountancy and bookkeeping software that runs in the cloud. Add-ons like Receipt Bank allow businesses to submit expense claims and receipts from their smartphones. There are many more.

COULD JOBS BE LOST?

It is no surprise, then, that a younger generation of accountants believes many traditional low-level accountancy skills will disappear resulting in a skills shift for new accountants. Global research by ACCA (the Association of Chartered Certified Accountants) found that three out of five accountants under the age of 36 believe technology will replace many entry-level jobs in the profession. The report states: “With increasing attention on the application of ‘robotic’ software across the profession, this is a generation who broadly expect to see more automation taking place.”

Martin Cairns, managing partner at UHY McGovern Hurley LLP in Toronto, Canada, believes the automation process is already well under way. He says: “Manual bookkeeping is almost a thing of the past. Cheque writing is becoming less and less common. As technology continues to advance and businesses adopt the new integrated technology, accountancy firms that have relied on bookkeeping and accounting reconciliation work will struggle.”

In Russia, too, Fintech is replacing certain traditional accountancy tasks, says Nikolay Litvinov, director of audit and consulting at UHY Yans-Audit LLC in Moscow.

“The development of financial technologies will certainly change the approach to the accounting profession,” he says. “Already, on the authority of leading Russian banks, automated accounting systems for small businesses are being created, effectively replacing the entire work of the accountant.”

Alexander Koinov, managing partner at member firm UHY Prostor Ltd in Kiev, Ukraine, agrees. “Our company provides accounting and auditing services. Some sources suggest that 94% of this work will be automated by 2024. In my opinion, that looks likely for the Ukraine too.”

THREAT AND OPPORTUNITY

Fintech is certainly a disruptor. It will allow even small companies to do for themselves what they previously relied on accountants to do. The automation of traditional accountancy tasks has gathered unstoppable momentum.

But the younger accountants surveyed by the ACCA do not regard the encroachment of new digital technology with undue pessimism. While they believe Fintech is a threat to entry-level jobs, the report states that they also “recognise that technology will enable finance professionals to focus on much higher value-added activity.”

In this interpretation, technology is a liberator, freeing up valuable time. And UHY member firms are already using Fintech applications to streamline processes, creating the space for higher-level tasks.

“Our company uses technologies like cloud data storage and distributed access for the viewing and editing of the accounting data of our clients,” says Nikolay Litvinov. “We also actively use the digital signature. All financial and tax reporting is submitted by us to the tax authorities via electronic communication channels.”

ADAPT TO SURVIVE

Accountants have to learn to use the new technology in their everyday work. They may also have to broaden the skills and services they offer to clients. In Kiev, Alexander Koinov is unequivocal: accountants and auditors who fail to prepare for the Fintech revolution may not survive. “We will not be able to stay as we are today,” he says. “Now is the right time to talk about what we must do to adapt.”

The first requirement is to acquire the IT skills the profession will increasingly need to make the most of new technologies, and to be able to advise clients on the best Fintech solutions for their own businesses. Firms with an obvious Fintech expertise are likely to retain the trust of clients. Nevertheless, acquiring that in-depth knowledge will take time and investment.

“The development of new technologies opens a window of opportunity for new business,” says Nikolay Litvinov. “However, in this case, the technologies require a significant amount of investment and deep competencies in the IT field. We are working on options for cooperation with our partners in this area.”

Martin Cairns says that firms who make that investment of time and money may reap significant rewards: “They will be better positioned to advise existing and prospective clients on ways to streamline their internal bookkeeping and accounting functions, which will allow more time to concentrate on what clients really want – business and tax advice.”

Firms that embrace Fintech will free up time for the advisory function, and they may also be able to offer better, data-driven advice. For example, IT-literate accountants can take advantage of the real-time information offered by cloud-based financial applications to offer more in-depth guidance around access to finance, growth and cashflow forecasting. They can delve deeper into the data, producing real insight. And by doing so, they can make themselves invaluable, putting their expertise at the centre of client businesses.

UNIQUE INSIGHT

But is that enough? Is it possible that even the advisory function might be automated, with human accountants replaced by the next generation of data-driven artificial intelligence (AI)? Could applications that learn as they work replace the need for accountants and financial advisors altogether? Most think it unlikely.

“I think there is and always will be a huge opportunity for specialist advisors,” says Selwyn Cohen, managing partner at UHY member firm Cohen Fasciani in Melbourne, Australia. “Every client has a different issue and we develop unique solutions. Above all, we know how to communicate those solutions to them. I fail to see how that relationship, with its unique insight and tailored advice, can be replaced with AI.”

Sunil Hansraj also believes that, while technology may help human advisors give better guidance, for the foreseeable future the depth of experience and expertise that accountants bring to crucial business decisions is irreplaceable.

Decisions need a lot of investment – of time, effort, resources and, importantly, emotion – for which an app or machine will not be able to add the same value.

So, we can breathe a sigh of relief. Accountancy is safe, even if the skills accountants need are changing. The accountants of the near future will use technology to both automate basic processes and add value and insight to their role as analysts, consultants and advisors. The most adaptable will be IT-literate, tech-savvy, and – perhaps more than ever – central to the operations of the clients they serve.

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621

Email: d.maeremans@uhy.com – www.uhy.com