UK audit shake-up after spate of corporate failures; The two sides of the EY break-up

 

UK audit shake-up targets big firms after spate of corporate ...

 

The Big Four

Britain to shake up audit market after Carillion crash

Britain to shake up audit market after Carillion crash - Reuters

 

FILE PHOTO: A view of the London skyline shows the City of London financial district, seen from St Paul's Cathedral in London, Britain February 25, 2017. REUTERS/Neil Hall/File Photo/File PhotoReuters

UK Audit Shake-Up Targets Big Firms After Spate of Corporate Failures

LONDON (Reuters) - Britain set out sweeping reforms of big company audits on Tuesday after high-profile collapses at builder Carillion and retailer BHS in recent years hit thousands of jobs and raised questions about accounting quality.

The business ministry detailed changes to auditing and corporate governance that will be put into law, though the measures are unlikely to come into force until 2024 or later and smaller firms will be shielded from the new rules.

The reforms are in response to 150 recommendations from three government-sponsored reviews on improving auditing in a market dominated by KPMG, EY, PwC and Deloitte, known as the Big Four.

The new law would create a more powerful regulator, the Audit, Reporting and Governance Authority (ARGA), to push through changes set out by government.

In the meantime, the current watchdog, the Financial Reporting Council (FRC), will have powers to vet audit companies and ban failing auditors, the ministry said.

Britain will also review a European Union definition of "micro entities", which benefit from simplified accounts. They typically have a balance sheet of no more than 350,000 euros ($377,230) and employ no more than 10 people.

Loosening the definition would mean more firms saving money by filing simplified accounts, though it could raise investor protection concerns. Other reporting requirements will also be reviewed to help attract growth companies to Britain.

The FRC currently focuses on big listed companies, but ARGA's remit would expand to include about 600 private firms with more than 750 staff and an annual turnover of over 750 million pounds ($949 million), a higher threshold than initially flagged. BHS was unlisted.

NO UK SARBANES-OXLEY

To curtail the dominance of the Big Four, the top 350 listed companies would have to appoint a non-Big Four accountant, or allocate a certain portion of their audit to a smaller accountant such as Mazars, BDO or Grant Thornton.

The business ministry could introduce market share caps on the Big Four if there is no improvement in competition.

Directors of premium listed companies would also have to state why they think their internal controls are effective.

This would be done under Britain's "comply or explain" corporate governance code, which the FRC can change without legislation.

UK companies pushed back against enshrining in law a version of mandatory U.S. Sarbanes-Oxley rules, which force U.S. directors to personally attest to the adequacy of internal controls, and face prison for breaches.

"Lessons from Carillion and other recent company failures have been ignored, with little emphasis now on tightening internal controls and modernising corporate governance," said Michael Izza, chief executive of ICAEW, a professional accounting body.

FRC chief Jon Thompson said: "The Government’s decision not to pursue the introduction of a version of the Sarbanes-Oxley reporting regime is, the FRC believes, a missed opportunity to improve internal controls in a proportionate, UK-specific manner."

Big firms would also have to state what external checks, if any, were made on the reliability of their non-financial information in annual reports, such as risks from climate change.

Larger companies would have to confirm the legality of their dividends, a lesson from Carillion. 

Source link

 

Insight - The two sides of the EY break-up

 

For its part, EY is under particular pressure due to its auditing of collapsed German payments firm Wirecard AG – although it’s not clear that a break-up would rid it of any liabilities arising from that failure. Perhaps EY is preempting tougher regulation.Or perhaps it just sees an opportunity to monetise some of it assets.

  A possible split of EY into separate audit and consulting firms must confront the problem faced by all break-ups: How do you create attractive businesses out of both when one is likely to be seen as inferior?

Here, that would be the newly established standalone auditor. EY – or any Big Four accounting firm that attempts such a separation – has its work cut out to make pure-play audit a success.

The revelation by Michael West Media that EY is considering the move heralds a potentially seismic shift for the industry.

A succession of accounting scandals has long prompted attacks on the Big Four for earning fees from audit clients by selling consulting services such as strategy or restructuring advice.

There’s an inherent conflict of interest in offering these to the same executives whose homework you’re meant to be marking.

While regulatory scrutiny is forcing firms to tread carefully, creating distinct companies is the most reliable remedy.

The United Kingdom’s competition watchdog called for an “operational separation” of audit and consulting within the existing firms in 2019, stopping short of demanding full break-ups because of cost and complexity.

For its part, EY is under particular pressure due to its auditing of collapsed German payments firm Wirecard AG – although it’s not clear that a break-up would rid it of any liabilities arising from that failure.

Perhaps EY is preempting tougher regulation.

Or perhaps it just sees an opportunity to monetise some of it assets.

One option under consideration is the sale of a stake in the consulting business to a private buyer or to the stock market, creating a windfall for EY’s current partners, according to the Financial Times. Demand would likely be strong.

Just look at the private-equity money piling in lately. PwC sold a tax advisory practice to Clayton, Dubilier & Rice for a reported US$2.2bil (RM9.6bil) last year, while KPMG offloaded its UK restructuring arm to HIG Capital LLC.

But what about the rump that remains?

While the underlying economics of the Big Four are opaque, there’s a widespread suspicion that consulting subsidises audit.

At the very least, the ability to share costs means audit fees are lower than they would be for a distinct firm, regulators have found.

Retaining talent

The biggest challenge is how a standalone auditor would attract and retain talent without offering an in-house career in consulting as an option.

Short-sellers and forensic investigators aside, checking company accounts is for many a laborious gateway to other roles.

Audit partners accused of getting it wrong have regulatory probes hanging over them for years (an investigation into Rolls-Royce Holdings Plc’s 2010 accounts only just closed).

No wonder juniors tend to jump ship to better paid and less risky careers in consulting or investment banking not long after they’re qualified.

So auditing will have to be made more attractive, both financially and culturally.

One place to start is expanding the function beyond checking financial statements to offering sophisticated checks on companies’ claims on non-financial performance such as climate and social impact.

When the United States Securities and Exchange Commission is clamping down on greenwashing by investment funds, it’s clear the future of environmental, social and governance investing rests on companies proving they’re not cooking the books on these issues too.

These public-interest assessments are going to be increasingly scrutinised by investors in future.

They are already offered under the umbrella of so-called assurance services, but ought to become a more developed part of corporate reporting.

That would involve transferring some skills over from the consultancy side. The trick will be to add in parts of the current consulting business that are relevant to a more modern vision of audit, without just recreating a new auditor-cum-consultancy.

Of course, separation won’t eliminate all the conflicts in audit.

The chief culprit is the way managers often effectively appoint the audit partners who are meant to be their policemen.

But the prize for stock-market investors is improved audit quality, and a break-up could support that.

The goal should be to create a virtuous circle.

Make audit more enticing as a long-term career, attract people who do the work better – and hopefully cut the number of blow-ups. — Bloomberg

Chris Hughes is a Bloomberg Opinion columnist covering deals. The views expressed here are the writer’s own.

Source link

 

Related news

 UK Auditors - Chartered Accountant Audits UK

 

Inside EY's break-up plan: why it could radically reshape the ...

 

EY plans to spin off audit business in shake-up for industry

  

 

Related posts:

 

Revolutionising accounting for a new era

 

School grades don't matter much?

Accounting firms PwC and EY start a trend in recruitment to help business and society

 

Big Four

 

Probe on ‘Big 2’ accouting firms: KPMG and Deloitte still on over 1MDB accounts

 

Financial scandals are pandemic too

Dirty hands are a sign of clean money

https://youtu.be/0XExSHFkOgw

Dirty hands are the sign of honest, though not necessarily clean, work and labor and thus the income from such work is what we could call clean money. .

A person working with his or her hands, generally, has signs of this ingrained in skin of their hands and it is those people that we should value more than those who have highly manicured hands, whether female or male, who thus, more than likely, have never done an honest day's work.

But society values the latter more than the former, unfortunately, and we can see where that has led us, I am sure. Not only does society value the clean hands, as in no physical dirt on them, but also those that make vast sums of money, which those that do an honest day's work getting their hands dirty, do not.

The worker is the backbone of society for without him or her nothing would get produced, no streets cleaned, no parks and public spaces maintained, no food produced and no wood. The majority of office staff, civil servants, bankers and such like we could well do without, but we cannot do without the worker, the farmer and the forester. Neither, I know, can we do without doctors and nurses, and the cleaners in hospitals. Nor without the carers for the elderly and the sick. But most of those would fall under the term of worker anyway and thus are covered.

The disgrace is that those who toil hard with their hands and do the real work are those that get the lowest share in remuneration from their labors while those who do not do a single stroke of work are the ones who get all the rewards, which really are not due to them.

There are schools, nowadays, and I guess they have always been, who teach the kids that they should not aspire to the “low” jobs of working with their hands with terms such as “you are better than that”, or “we”, referring in that case to the entire school, “we are better than that”. I wonder what they think would happen if there would be not refuse workers, no street cleaners, and such like. For one they would be drowning in their own garbage that they create on a daily basis, not to think about the other things that would not happen would those workers not be there.

by Michael Smith (Veshengro)

Source link

#EndlessPossibilities

Reelated posts 

如何  查看自己的手机是否支持北斗卫星导航系统 - How to check if your phone su  pports BeiDou Navigation Satellite System

China's version of GPS now has more satellites than US original     https://youtu.be/pKUBulJ5YOU 软件下载地址：

Integrity should be no compromise! Malu apa, bro! Queries over credentials, Wee presses on quizzing Lim

Weighing in: (Clockwise from top left) Ramon, Marina, Hassan, Anas and Marimuthu

‘There should be no compromise on integrity’

Honesty and integrity should take centre stage in the debate that is swirling over the legitimacy of certain university degrees of politicians.

Asli’s Centre for Public Policy Studies chairman Tan Sri Ramon Navaratnam said good political leaders need not be graduates but some academic credentials would be an asset to them.

“What we need are politicians with keen critical thinking, dedication and sincerity to serve the rakyat,” he said yesterday.

Ramon said that politicians who had “cheated” should confess and let the people decide if they still want them to carry on serving or quit their posts.

Several politicians have come under fire after their academic qualifications were questioned by the public.

Deputy Foreign Minister Datuk Marzuki Yahya found himself in hot water following the controversy over his “Cambridge University” degree.

Others included Finance Minister Lim Guan Eng, Defence Minister Mohamad Sabu, Housing and Local Government Minister Zuraida Kamaruddin, Johor Mentri Besar Datuk Osman Sapian and Perak state executive councillor Paul Yong Choo Kiong.

Several Barisan Nasional leaders too had their qualifications scrutinised in the past. Among them were former prime minister Datuk Seri Najib Tun Razak and Human Resources Minister Datuk Seri Richard Riot.

Former UiTM vice-chancellor Emeritus Prof Datuk Dr Hassan Said said in other countries, leaders would have been asked to resign or they would voluntarily quit if they were found using dubious credentials.

“Honesty and integrity values are more important to those who are dealing with public trust and responsibility.

“The nation will collapse if its leaders are not honest or have integrity,” he said.

Educationist Prof Tan Sri Dr T. Marimuthu said politicians must come clean about their academic credentials as they are serving the public.

“Otherwise, how else can you serve the people?

“If you ask someone to write your thesis for you or use dubious ways to earn your credentials, you are just being dishonest to yourself and the public,” he said.

Moderation advocate Anas Zubedy concurred, saying that there should be no compromise when it comes to leadership and integrity.

“No matter how brilliant, knowledgeable or successful you are, a lack of integrity disqualifies any and all talent for any leadership position. We must check their track record for any propensity to lie, practise double standards, or to say one thing and do the other.

“New Malaysia must not compromise on integrity,” he said.

Writer and social activist Datin Paduka Marina Mahathir said it was better to own up in not possessing a degree than to pretend to have one.

“No, it’s not a crime nor is it essential to serve in the government but it’s a matter of trust. If you can misrepresent this, what else can you misrepresent?” she asked.

G25 group of eminent Malays said it is best to be honest about one’s academic credentials so that doubts are not raised on their integrity.

“A politician who lies about his personal details to win an election or get a ministerial position will raise doubts about his integrity. He will also create a bad image for the government and the country,” it said in a statement.

Najib asked whether it was the national news agency Bernama or officers of the ministers that had misrepresented the academic credentials of Pakatan Harapan ministers.

“But what is more strange is that the false news that the ministers were graduates came from the biodata published from Bernama in its infographics and was spread when they were appointed as ministers about nine months ago.

“As far as I know, normally Bernama would request the biodata from the special aides or the press secretaries of ministers when they are appointed to be published in its reports,” he said on Facebook.

Reports by Star team: TARRANCE TAN, HEMANANTHANI SIVANANDAM, RAHIMY RAHIM, NURBAITI HAMDAN, RASHVINJEET S.BEDI and SARBAN SINGH


Malu apa, bro!

WE seem to be heading towards a dangerous edge. There is now an emerging culture of shamelessness.

Datuk Seri Najib Tun Razak may have been slapped with countless charges of corruption and money laundering, but his campaign, Malu apa, bossku (“Why the shame, boss?” in Bahasa Malaysia), has surprisingly attracted millions of likes on social media.

The scandal-smeared former prime minister has traded in his tailored suits, impeccable English and political elite-aristocratic crowd for the Mat Rempit and Malay working class.

As part of his makeover, he is now decked in black parka, black jeans and black sneakers.

He is even hanging out with the young Mat Rempit and posting wefies with them. He is also happily showing off a black-and-red Yamaha Y15ZR 150cc moped that is all the rage with the youths of today.

And the registration plate on his bike is 8055KU, which insinuates “BOSSKU”, and to these newfound supporters, Najib is called Boss kita! (Our Boss.)

The key phrase here is Malu apa bossku, and while many learned Malaysians are cringing over this new culture, it barely seems wrong for our embattled former PM, who is basking in it and promoting the malaise.

But a similar show is also surfacing on the other side of the political divide.

One Pakatan Harapan leader after another is having his or her dubious education credentials exposed after Deputy Foreign Minister Marzuki Yahya was questioned over his.

Johor Mentri Besar Osman Sapian’s education history has come under the spotlight with the allegation that he didn’t obtain a degree from Universiti Putra Malaysia (UPM), as claimed.

Housing and Local Government Minister Zuraida Kamaruddin’s social science degree from the National University of Singapore (NUS), as reported when she became a minister, has also come into question. Now, she’s washed her hands of ever having had one.

DAP Assemblyman from Tronoh Paul Yong Choo Kiong claimed to have a masters in business administration from Akamai University – an alleged degree mill in Hawaii – among his academic qualifications.

None of these politicians have apologised for not correcting these errors when they were revealed, but now, they have conveniently shrugged off the news reports, claiming no knowledge of such revelations.

Worse, Marzuki passed the buck to Prime Minister Tun Dr Mahathir Mohamad, saying it is now up to his boss to decide. The Johor MB chose to remain silent, hoping that the storm would blow over.

The central issue here isn’t whether an elected representative should have a tertiary education – the point here is, should we put our trust in anyone who lies to themselves?

If some of these individuals buy dubious online diplomas, they are only cheating themselves. Worse, the electorate has also fallen for this charade hook, line and sinker.

Instead of working hard, like most university students, these individuals apparently chose the easy way out. Are we expected to believe them when they talk about accountability and integrity from now on?

What’s worse is, most Pakatan leaders have chosen to look the other way or have lamely justified these dishonest transgressions.

If they were in the private sector, the sack would be a foregone conclusion, but then they are “Yang Berhormat”, despite these dishonourable acts.

Apa nak malu, YB! Aku ada SPM aje, bro!

And of course, that’s not the end. PAS leaders have found themselves in unfamiliar waters.

With their turbans and goatees, they like to appear pious and holier than thou. However, they are now seeing their names flying on social media, associated with a taste for sports cars and bikes, and not just under their names, but those of their children and spouses.

A report filed with the Malaysian Anti-Corruption Commission (MACC) over allegations of PAS leaders getting RM90mil from Umno under the previous administration involved “a list of expensive cars”, properties, high-powered motorcycles and “the purchase of number plates at exorbitant prices”, it has been widely reported.

According to the report, several PAS leaders were accused of using these funds to acquire the cars and properties.

The cars include BMW, Mini Cooper, Toyota Vellfire, Range Rover, Porsche Cayman, Audi Q7, Audi A6, Toyota Camry, Toyota Fortuner, Volkswagen Passat, Mercedes Benz, and a BMW motorcycle, according to a report.

“As for the properties, this includes a bungalow in Bangi worth RM3mil,” says a report. The only item missing is camel ownership.

PAS Mursyidul Am (spiritual leader) Datuk Hashim Jasin has admitted to owning a Porsche Cayman, but said his son was the real owner, who was entitled to an Approved Permit (AP) when he served as the Arau MP between 1998 and 1999.

Every one of them has branded these accusations as part of some grand political conspiracy, pleading innocence and insisting they are virginal and pure instead.

But we are sure they will be okay, and they will continue to preach accountability and transparency, and possibly continue to look – invoking race, religion and God – to their faithful followers, who will readily give away their savings and, brave the rain and scorching sun to support them.

Malu Apa Bossku? Tatap Sokong Boss (as the Sabahans will say).


by Wong Chun Wai



Queries over credentials

DEPUTY FOREIGN MINISTER DATUK MARZUKI YAHYA

It was reported by Bernama that Marzuki pursued a Bachelor’s degree in business administration, majoring in logistics via a long-distance learning programme at the University of Cambridge.

Response: “When I was asked by the media, I clearly said that I was from Cambridge International University (CIU) in US and not the University of Cambridge in UK.”

FINANCE MINISTER LIM GUAN ENG

MCA president Datuk Seri Dr Wee Ka Siong questioned Lim's credential as a qualified professional accountant

Response: Lim's political secretary Tony Pua rebutted the allegations by producing Lim’s degree certificate from Monash University, Australia on April 11, 1984, together with a copy of his “Certificate of Membership” in the Australian Society of Accountants dated Feb 21, 1984.

DEFENCE MINISTER MOHAMAD SABU

Accused of faking a degree in culinary arts.

Response: “Some people say I have a degree in culinary arts. I never said that. Truth is, I never completed my studies at UiTM. They kicked me out.”

But Mohamad was quick to add that despite this, he was still a “good cook”.

HOUSING AND LOCAL GOVERNMENT MINISTER ZURAIDA KAMARUDDIN

A Twitter user claimed he could not find her name on the National University of Singapore’s online degree verification portal.

Response: “I have never claimed or held myself to be a graduate of NUS and I have never authorised anyone else to do so,” she said.

JOHOR MENTRI BESAR DATUK OSMAN SAPIAN

A Facebook page questioned the validity of his UPM Bachelor in Accounting obtained in 1985.
Response: He has yet to comment on the matter.

TRONOH ASSEMBLYMAN PAUL YONG CHOO KIONG

Yong was questioned over his Masters in Business Administration (MBA) from Akamai University, United States by MCA’s Dr Wee.

Response: Yong said he felt calm and had nothing much to comment as his certificate is real and he had a convocation 16 years ago.

“My main interest now is to do the best for my voters,” said Yong.

FORMER PRIME MINISTER DATUK SERI NAJIB TUN RAZAK

DAP highlighted a video circulating online alleging that Najib never completed his studies at UK’s Nottingham University in the 70s.

Response: “Of course my degree is legitimate.”


FORMER HUMAN RESOURCES MINISTER DATUK SERI RICHARD RIOT

Riot was questioned in 2013 over his Bachelor of Business Administration from the Chartered Insitute of Business Administration (Ireland) and a Masters in Business Administration from Preston University in the United States.

Response: “As (former) prime minister, he (Datuk Seri Najib Tun Razak) has used his wisdom to find out whether I am fit to be a minister, and that includes my academic qualification, by tasking me to be in charge of the human resources portfolio, which is a very a challenging ministry with 13 agencies.

“There is a difference between fake degree and qualifications from unrecognised universities. I worked very hard for it because I believe in life-long learning”, he said.

Wee presses on quizzing Lim

Wee: No evidence showing that Lim ever worked in any accounting firms.

KUALA LUMPUR: Despite threats of being sued, MCA president Datuk Seri Dr Wee Ka Siong continues to raise questions on Finance Minister Lim Guan Eng’s credentials as an accountant.

Dr Wee said that “Lim is far from even being a certified or a chartered accountant”.

The Ayer Hitam MP, while referring to documents released by Lim’s political secretary Tony Pua yesterday, pointed out that Lim’s membership into the Australian Society of Accountants on Feb 21, 1984, merely stated that he was admitted as a provisional member.

A provisional membership, Dr Wee said, was one of the steps required to enrol into programme modules and examination in order to qualify as an accountant, and to qualify for a full membership into the Australian Society of Accoun­tants.

Therefore, a provisional membership is far from being a fully certified chartered accountant or even an accountant.

“You cannot call yourself using either designation,” said Dr Wee in a Facebook posting yesterday.

The Australian Society of Accoun­tants is now known as CPA Australia (Certified Practicing Accountant).

Checks online showed that a full membership is only awarded to individuals if they have successfully passed the CPA examination – which also requires a bachelor’s degree in accounting and a year of supervised working experience under a CPA licence holder.

At the same time, Dr Wee, in the same Facebook posting, pointed out that Lim was quoted by news portal MalaysiaKini in a report on March 2012 as saying that he was a failed accountant and had spent less than a week in an accounting firm in Malaysia before he was sacked.

Dr Wee said there was no evidence showing that Lim ever worked in any accounting firms, or having enrolled for any necessary education requirements to qualify as a certified accountant or a chartered accountant.

“In fact, online checks with the Malaysian Institute of Accoun­tants (MIA) does not show Lim as being a member.

“In Malaysia, you cannot misrepresent yourself as an accountant unless you are a member of MIA.

“It is a criminal offence under Section 25(e) of the Accountants Act 1967 for any individual or organisation to call himself or herself an accountant unless he or she is registered with the MIA,” said Dr Wee.

At the same time, Dr Wee said that a report by New Straits Times in June 2018 also pointed out that Lim had claimed to be a former accountant.

Meanwhile, Dr Wee also said that DAP’s website had misrepresented Lim as a certified accountant.

“Neither MCA nor myself have any interest in pursuing this matter any further as the declining economy right now is a more important issue to address.

“We leave it to DAP and the rakyat to judge if a legal offence has been committed,” said Dr Wee.

Lim’s qualification in accounting is the latest to come under scrutiny after a series of alleged false education credentials involving Pakatan Harapan leaders, including Deputy Foreign Minister Datuk Marzuki Yahya, Johor Mentri Besar Datuk Osman Sapian and Tronoh assemblyman Paul Yong Choo Kiong. - The Star.

Related:

Guan Eng mulls legal action against naysayers  

https://youtu.be/s6nOmgkJXx4

Integrity at stake - Letters

 

Related posts:

‘Degree and awards-buying show poor character and stand to lose credibility’

Under scrutiny: A photo of the Cambridge International University and logo taken from its website. https://youtu.be/x90SmWqP2V4 ..

Malaysia Finance Minister Lim Guan Eng's credentials as an accountant questioned

On Malaysia Finance Minister Lim Guan Eng's website, it is stated in his biodata that he graduated from Monash University, Australia..

Malaysia's Human Resource Development Fund (HRDF) a 'personal piggy bank of sr managers!

 

Clean up the graft and power abuse at Human Resource Training & Development provider HRDF

https://youtu.be/fuk3xC6M0ow https://youtu.be/JrJ0V3TIskc https://youtu.be/CT8dgpCh_2w Scandal-hit: The clean-up at HRDF app...

 

 

Fake Awards Scam for Penang Island City Council, Seberang Perai Municipal Council !

  Dubious honours : (Above) Former Penang Island City Council mayor Patahiyah Ismail with the trophy and certificate for Best Munici...

 

 Malaysian Public varsities, companies, GLC execs also recipients of EBA fake awards

School grades don't matter much?

Accounting firms PwC and EY start a trend in recruitment to help business and society

 

Big Four

WE all know that good grades in school won’t necessarily land you that first job. They do however go a long way towards convincing a potential employer that you’re likely to perform well if hired. That’s why you’re routinely asked to produce certificates and transcripts during the application process. How else can the employer get a quick reading on the discipline, intelligence, diligence and knowledge of a school-leaver or a fresh graduate?

But what if an employer decides that your grades shouldn’t matter as much? How will that change things?

For the answer to that, we ought to be watching the Big Four accounting firms in Britain.

Starting in June last year, PricewaterhouseCoopers (PwC) stopped using the UCAS tariff as an entry criterion for most of its undergraduate and graduate recruitment schemes. Developed by the Universities and Colleges Admissions Service, the tariff is the British system for allocating points to those seeking undergraduate placements.

The system applies to a long list of entry qualifications — for example, A levels, City & Guilds diplomas, and music examinations — and the points for each qualification are worked out based on the levels of achievement.

Before this, a person usually must have a minimum number of UCAS points before PwC would consider his job application, even if he’s a graduate. This is apparently a common practice in Britain. With the policy change, the accounting firm can now overlook mediocre A-level results if the candidate has gone on to soar in his degree programme.

PwC says the reduced emphasis on UCAS points is because it’s important to be a progressive and socially inclusive employer, and because it wants to reach the broadest range of talented students.

“There’s strong correlation that exists in Britain between social class and school academic performance. This data suggests that by placing too much emphasis on UCAS scores, employers could miss out on key talent from disadvantaged backgrounds, because they may perform less well at school. That’s why, from an academic perspective, we’re focusing on your degree,” it explains on its website.

And then in August, Ernst & Young (EY) announced that it would remove academic qualifications from the entry criteria for its 2016 graduate, undergraduate and school-leaver programmes. Instead of insisting on certain standards for UCAS points and degree classification, the firm relies on “a new and enhanced suite of online “strengths” assessments and numerical tests to assess the potential of applicants”.

In other words, EY recruits by evaluating the candidates’ strengths and promise, not just their past performance.

This decision came after talent management firm Capp had studied EY’s student selection process over 18 months. The analysis found that EY’s strengths-based approach in recruitment, introduced in 2008, is a robust and reliable indicator of a candidate’s potential to succeed in his role in EY.

“At EY, we are modernising the workplace, challenging traditional thinking and ways of doing things. Transforming our recruitment process will open up opportunities for talented individuals regardless of their background and provide greater access to the profession,” says Maggie Stilwell, the managing partner for talent.

“Academic qualifications will still be taken into account and indeed remain an important consideration when assessing candidates as a whole, but will no longer act as a barrier to getting a foot in the door.”

“Our own internal research of over 400 graduates found that screening students based on academic performance alone was too blunt an approach to recruitment. It found no evidence to conclude that previous success in higher education correlated with future success in subsequent professional qualifications undertaken.”

It’s interesting that Stillwell describes an overriding dependence on academic qualifications as a blunt approach. Stephen Isherwood, the chief executive of Britain’s Association of Graduate Recruiters, has a similar view. The PwC press release on the firm’s move to drop the UCAS points entry criteria, quotes Isherwood: “Using a candidate’s UCAS points to assess his potential is a blunt tool and a barrier to social mobility. This is an innovative step by one of the most significant graduate recruiters in Britain. Other graduate employers should follow its lead.”

PwC definitely sees itself as a trendsetter, saying its new recruitment assessment process could drive radical change across its industry. However, these radical changes haven’t happened yet. So far, Deloitte and KPMG, the other two firms in the Big Four, are still sticking to their minimum academic requirements in Britain.

It’s too soon to conclude that the recruitment changes by PwC and EY are a failed experiment.

The war for talent is intense among accounting firms. Businesses can’t stay at the top without thinking out of the box, taking bold steps, and being caring. It should be no different when it comes to how they hire people.

By Errol Oh Optimistically cautious viewpoint

Executive editor Errol Oh joined an accounting firm right out of school. That doesn’t happen in Malaysia anymore.

Related:

Big Four Corporation

The Big Four are the four largest international professional services networks, offering audit, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services. Wikipedia

Give thanks with a grateful heart

Appreciate the good and bad in your life and be optimistic about the future

WITH two days left for this year, it is time to reflect and make fresh resolutions for 2016.

I have learnt to give thanks for all things – good or bad – that came my way.

But why be thankful even for the bad?

Truth be told, it took me a long time to be willing to accept misfortune and longer still to give thanks for them.

Now I appreciate there are far too many factors that I cannot control despite my best efforts.

So I just learn from the sad experiences to avoid repeating them and hold on to the hope that something good will come out of them later.

2015 has been a victorious year for me with more blessings than woes.

With a grateful heart, I choose to remember the former with rejoicing and overlook or forget the latter.

Wonderful blessings

Firstly, I am thankful that everyone in my family is in good health.

My biggest blessing is my baby, Cat.

My life has completely changed since her arrival in mid-year and everything I do now revolves around this little bundle of joy.

Healthy, joyful and growing well, she sits, crawls and listens whenever we speak to her.

On her second swimming class, she was submerged briefly in water and has been doing this with ease ever since.

In a couple of months she will start her nursery and music appreciation classes.

Meanwhile, she is learning to recognise words being pronounced and images with the aid of picture cards.

Being an inexperienced mother, the help and support from my husband, his parents and my parents has been invaluable.

My mother is a great help in tending to baby Cat and teaching me many valuable lessons about caring for my baby.

Everyone knows how difficult it is to hire a maid these days.

The timely arrival of our maid who is well-mannered and an experienced mother to take care of the many household chores lifted a heavy load of me.

It spite of the current weak economy, our architectural firm has been successful in securing several commercial and residential projects in addition to our appointment to design automotive facilities throughout the Asia-Pacific region for an upmarket marque.

We are continuously developing talented architects and designers while fostering in them a passion and enthusiasm for their work.

My 95-year old grandmother fell very ill in September but has since recovered almost fully.

She has good health except for occasional bouts of sleeplessness for a couple of days after which she will be groggy for two or three days and regale us with funny tales.

I am thankful to have clean air to breathe for the next few months before the haze sets in again, and that our economy is not too bad and personal safety here is much better than most other countries.

Looking forward

Our family has a saying that “next year will be a better year”.

Thankfully, it has been so all these years.

I eagerly await the time when baby Cat begins to talk and walk.

I am certain my heart will melt at the sweet sound of her voice when she calls me “mummy” and the sight of her staggering towards me for a hug.

After several months’ hiatus, I am getting ready to return to work which I miss very much.

Meantime, I have to trim off at least 6kg to get back in shape.

With determination, it will take three to four months.

I am yearning for the opening of our new automotive facility which specialises in the restoration and maintenance of classic and exotic cars.

Renovation work on the premises is in their final stages and business should commence in the first quarter of 2016.

Everything seems bright

Ever since my father told me about the downfall of his arrogant business principal, I have always reminded myself to be more careful when everything seems bright.

After a conference in a five-star hotel in Madrid, he asked the latter why he was wearing dark sunglasses in the coffee house.

Puffing a cigar, the principal replied that his future was too bright.

He lost his job soon after and his fortune has dwindled further ever since.

While I receive blessings, I remember there are many poverty-stricken people.

I shall rekindle my passion for charity and do my part for orphans and old folks.

We cannot do much about the burning national issues but I hope that they will be settled expeditiously so that the government can begin to organise itself to take care of wage-earners who are hard-pressed due to the rising cost of living.

On balance, I am optimistic about the future because the scriptures teaches me to always have hope and that the righteousness of God will bring peace and joy to anyone who puts it into practice.

May you be blessed with peace, joy, love, excellent health and prosperity in 2016 and beyond.

By Chermaine Poo Slice of life

Chermaine Poo is a chartered accountant turned actress, TV host, emcee and columnist. Follow her on www.chermainepoo.com, Facebook.com/ChermainePoo, and Instagram.com/Chermaine Poo or drop her an email at info@chermainepoo.com

Related posts:

Make the right money moves: investing in a property is still best

THE Christmas and New Year celebrations offer us good reasons to indulge in extra spending — shopping for presents, overseas trips, part...

Cars are more expensive than houses? A house can buy how many cars?

 Our cars are costing us our homes!

•  Is having a car still a symbol of freedom?