Issuu

industry focus | advisory

how can we

future-proof accountants?

PrimeGlobal CEO Steve Heathcote explains the need for accountants to develop an advisory mindset in order to grow and sustain client relationships from the outset, with training delivered through Consultancy Labs, using a blended approach to coaching in cooperation with experienced partners

APRIMEGLOBAL s the trusted advisor status is enhanced, with businesses increasingly looking for services beyond accounting, audit, tax and compliance, so is the demand for advisors to help guide businesses’ ﬁnancial futures and evaluate diﬀerent types of transaction. This trend has created opportunities for many firms, but also presented firms with a challenge to shift the mindset, build staff capability in core professional skills, and innovate. For some it is a real paradigm shift. Core service lines are automated and delivered through the cloud. With automation, higher-level skills are needed from the start of the client relationship to provide value. Clients need accountants with an advisory mindset who are able to see the business through their eyes, look at their business in a different way, demonstrate innovation, show emotional intelligence, communicate effectively and provide relevant business insights. Trusted advisors will be needed more than ever as clients transform their businesses postCovid. However, it is no longer possible to learn these skills as an apprentice on the job by completing routine tasks and moving up to manage an audit. With automation, these skills are needed from the get-go. Accountants may struggle to have the right mindset and be ready to embrace these

professional skills. This reminds me of an old joke: what is an extroverted accountant? The one who looks at your shoes when he is talking to you rather than looking at his own. This still has some resonance, and needs to change for the profession to stay relevant in the new world. This is a challenge, especially now when the apprenticeship model is no longer relevant. At PrimeGlobal, firms realise these skills can be taught, but they need to be taught from the moment someone joins the firm.

IN THE PRESS

Press clips of PrimeGlobal 2020 PR coverage

However, it takes new interventions and a blended approach to develop confidence and help professionals embrace the value the advisory approach creates. At the moment, PrimeGlobal’s approach to assisting member firms in developing advisory skills is focused around: • Simulating scenarios so professionals can learn from real case studies and problems, guided by experienced advisors; • Creating opportunities to develop an advisory mindset with clients; • Ensuring professionals have the right knowledge – the toolkit to apply when needed.

SIMULATING SCENARIOS

Steve Heathcote, PrimeGlobal

34 | November 2020 | International Accounting Bulletin

Many PrimeGlobal firms organise Consultancy Labs where teams are able to practice an advisory mindset using real case studies, with the benefit of guidance offered by experienced partners. PrimeGlobal US firm Lutz organises consulting consortiums, where young professionals join together to do a mock lunch meeting, where partners coach the team on the questions to ask and how to think like a consultant. Ron Nebbia, consulting shareholder who leads this programme at Lutz, says consulting consortiums help young professionals better

I n te r na ti o n a l A c c o u n t i n g Bu lletin i nter v i ews S tev e Heath cote on t h e n e e d fo r a c c o u n t a nts to dev el op an adv i sor y mi ndset

industry focus | advisory

how can we

future-proof accountants?

s the trusted advisor status is enhanced, with businesses increasingly looking for services beyond accounting, audit, tax and compliance, so is the demand for advisors to help guide businesses’ ﬁnancial futures and evaluate diﬀerent types of transaction. This trend has created opportunities for many firms, but also presented firms with a challenge to shift the mindset, build staff capability in core professional skills, and innovate. For some it is a real paradigm shift. Core service lines are automated and delivered through the cloud. With automation, higher-level skills are needed from the start of the client relationship to provide value. Clients need accountants with an advisory mindset who are able to see the business through their eyes, look at their business in a different way, demonstrate innovation, show emotional intelligence, communicate effectively and provide relevant business insights. Trusted advisors will be needed more than ever as clients transform their businesses postCovid. However, it is no longer possible to learn these skills as an apprentice on the job by completing routine tasks and moving up to manage an audit. With automation, these skills are needed from the get-go. Accountants may struggle to have the right mindset and be ready to embrace these

SIMULATING SCENARIOS

Steve Heathcote, PrimeGlobal

34 | November 2020 | International Accounting Bulletin

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I n te r na ti o n a l A c c o u n t i n g Bu lletin i nter v i ews S tev e Heath cote on t h e n e e d fo r a c c o u n t a nts to dev el op an adv i sor y mi ndset

industry focus | advisory

comfortable environment with no strings attached. These sessions are an opportunity for the diverse team of experienced and professional advisors at MCM to listen, learn and evolve ideas around the company’s challenges and goals until they become actionable solutions.”

THE RIGHT TOOLKIT

Ron Nebbia, Lutz

understand clients’ businesses and supply chains. Similarly, US member C&D organises ‘lunch and learn’ meetings with staff to provide additional coaching and learning in this area.

ADVISORY OPPORTUNITIES 6

Some firms are creating the environment and space to look at a client’s businesses differently. Diverse thinking is important, and firms work with staff to try to encourage looking at an issue in a new way, as this helps create new insights and offer better advice. At Lutz, the SWAT team meets every month, where 8-10 people from different divisions work on a client together, to review their business from all sides. The partners are present at these meetings, and they encourage staff to think out of the box. Best ideas are then summarised and presented to the client. MCM CPAs and Advisors is another PrimeGlobal firm that engages in similar work with staff. Diverse firm staff meet with the client in a comfortable environment, to listen, learn and evolve around company’s challenges and goals. This group is made up of diverse staff and put together based on the company’s industry, challenges and goals. They listen and work with the client until solutions are found. Steve Kerrick, MCM partner and advisory services team leader’ says: “A trusted business advisor isn’t someone you buy a widget from, it’s someone you can open up to about the best, the worst and most vulnerable aspects of running a business. “The team at MCM CPAs & Advisors encourages clients and future clients to participate in brainstorming sessions in a

At PrimeGlobal, we have worked with members and consultants to develop competency models and e-learning modules to equip our firms’ staff with the right skills. We run a 24-hour on-demand learning library where staff can chose from a wide range of courses and materials. Competency courses include topics such as building relationships, understanding clients, communication, conversational insights, anticipation, innovation, negotiation, change management and the benefits of diversity. These modules are brought together to create a programme called MBAexpress. In addition, our firms ensure professionals have the right toolkit and mix of skills. US firm Hogan Taylor LLP started a programme called Business Advisory ACT for the whole team. ACT stands for attributes, knowing the attributes of the best advisors and those you already have; conversations, meaning CPAs must learn to have the right conversations with clients to move beyond compliance professionals into the advisor role; and teams, everything we do is in teams of people to serve clients holistically. Similar programmes are run in other firms. For example, at K·Coe Isom, the firm has devised new training courses and apprenticeships called Business Advisory Mentorship and Value Strategist Apprenticeship to teach these skills. Through the Business Advisory Mentorship programme, the firm is creating an intensive and direct opportunity for younger professionals to expand their exposure to both leaders and new experiences, while the Value Strategist Apprenticeship offers an accelerated development opportunity, mentorship and formal training to impact staff ability to support firm growth through powerful client relationships.

FUTURE-PROOFING Helping to future-proof accountants is a bit like driving a car – the insight practice and the use of the toolkit have to combine seamlessly. In order to achieve this, we have

Steve Kerrick, MCM CPAs and Advisors

developed an advisory training program that brings all the parts together. The five-week training will include modules on Intelligence and the Advisory Mindset, Meaningful Relationships, Winning Proposals, Advisory Commitment, and Coaching and Bringing Back to Your Firm. Participants will leave with the tools needed to consistently expand client relationships and develop new ones, supporting the growth engine of the firm. Up to six people from a firm can participate, so they can apply the knowledge and learn from others to create that all-important diversity. The accountants of the future need different skills than in the past. An advisory mindset and the ability to evaluate and deliver different kinds of transactions is going to be critical. At the same time, learning has become more difficult, as we cannot rely on the old apprenticeship model anymore. However, we can excel at this if we apply a blended approach to develop staff from the moment they join the firm. PrimeGlobal firms are embracing this new model with the support of their association. We are working hard with members to share best practices and learning, which help instil diverse thinking and problem solving mentality, ensuring professionals have the right competencies and confidence to use them. The pandemic has presented us with many challenges, but also opportunities – to leave the old model and stereotypes behind and embrace the new elevated status of the trusted business advisor. To do this, we need to be bold to take the right steps, and proactive to introduce structured and blended approaches to shift the mindset and innovate, presenting the profession with a range of new possibilities.

www.internationalaccountingbulletin.com | 35

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P ri m e Glo b a l w i n s b o t h t h e A ss ociation of th e Year an d Su s tainab le O rg a ni z ati o n o f t h e Ye a r a t th e I n ter n ation al A ccou n tin g Bu l let in D i g i t a l A ccou n tancy Awards

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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A c co u n t i n g To d a y re por ts on P r i meGl obal ann oun ci ng a s t r a t e g i c par tner sh i p wi th A ICPA

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Ne w P r i m e G l o b a l m e m b e r a n n o unc e m e n t s

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I n te r na ti o n a l A c c o u n t i n g Bu lletin i nter v i ews S tev e Heath cote on h o w t h e a s s o c i a t i o n ’s m ember s are del i v er i ng v al u e to cl i en t s

feature | audit

why we should

be proud to be auditors Covid-19 has required new approaches to audit and a total reassessment of risk. PrimeGlobal CEO Steve Heathcote offers IAB readers an insight into how the association’s members are delivering value to clients

ecent headlines about audit have not been good reading – dominated by high-profile audit failures and regulatory intervention to break up the big firms. With companies of all sizes under financial pressure, the value of audit is once more being challenged. The audit is sometimes seen as a necessary evil, a compliance activity adding little value to a company or its stakeholders. This is captured by the old joke: Why did the auditor cross the road? Because they did last year! As an ex-auditor it does still make me smile. The reality, however, is very different. The crisis has required new approaches to audit procedures and a total reassessment of risk. My recent discussions with PrimeGlobal member firms highlight that the crisis has increased their focus on understanding business risk, the impact on audit procedures and the audit opinion. Many of our member firms’ audit businesses of differing size and across sectors – often small to medium-sized companies. They are used to complexity, and recognise that every client needs to be understood differently. As Elaine Pantel, partner – assurance and business advisory at Canadian firm Shimmerman Penn, explains: “The partners feel a higher sense of purpose as they

realise how important the audit is during challenging times.”

VISITING CLIENTS Clearly Covid-19 has limited the ability of audit teams to visit clients to complete audit procedures, such as inventory checks. The extent this has impacted audits varies depending on the time of the year end.

Steve Heathcote, PrimeGlobal

Anthony Woodings, business services partner at UK firm Hurst, explains that 30 March year ends were particularly challenging. However, Woodings notes: “We assessed risks, determining exactly when we needed to be at the client’s premises and what could be done remotely. For certain types of inventory, we could obtain strong assurance using collaborative technology. Often when teams go out to client locations, we have down times when they are waiting for information. By obtaining information in advance and really focusing on only visiting when we needed to, we reduced physical time spent at a client from a typical six weeks to six days.” The extent of thought required is helping to focus audit work on key matters. Simply following previous audit procedures is not an option. For both Shimmerman Penn and Hurst, previous investment in technology and moving to fully paperless operations has helped to ensure they were in a strong position to obtain information from their clients to continue audits. Hurst started to adopt an AI auditing solution before the crisis hit. This foresight has proven to be incredibly valuable. Woodings explains: “The software has been great to analyse data to focus on audit risk,

28 | September 2020 | International Accounting Bulletin

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I n te r na ti o n a l A c c o u n t i n g Bu lletin i nter v i ews S tev e Heath cote on h o w t h e a s s o c i a t i o n ’s m ember s are del i v er i ng v al u e to cl i en t s

feature | audit

Firms like Shimmerman Penn and Hurst have invested in strong quality-control functions with senior staff like Zelman ready to support audit teams. This investment has helped keep a focus on independence during a time when there could be more pressure from clients. It also ensures that teams have access to high-quality advice issued from a range of standard setters and professional bodies.

VALUE OF AUDIT

Elaine Pantel, Shimmerman Penn

and the dashboard really helps explain issues to clients.” The crisis has clearly helped to accelerate the adoption of the technology.

GOING CONCERN 23

There is clearly an increased probability that auditors may need to highlight the existence of an uncertainty regarding a company’s ability to continue as a going concern. For some clients, for example in the casual dining sector, the risks are so clear that clients have accepted the need to do so. However, for others the thought of any form of modified

Pantel and Woodings comment that they have had to invest more time in audits to consider challenging judgemental areas. Pantel notes that this is putting some pressure on the recovery of costs; however, the firms want to support their clients during challenging times and are reluctant to increase audit fees. Both firms are passionate about their clients and want to help provide the insights which help them grow. Woodings comments that Hurst feels fortunate to have entrepreneurial clients that want help to understand their financial position, accept their reality, and are nimble and can refocus on growth. He says for some business owners this is motivating, and reflects the entrepreneurial spirit that is the driver behind many small to medium businesses. Such businesses represent the majority of economic activity, and puts the auditor in the critical role to build the confidence required to generate jobs and growth.

We assessed risks, determining exactly when we needed to be at the client’s premises and what could be done remotely audit report is a shock. As Pantel says: “This is partly psychological – it’s a sense of pride – clients want a ‘clean’ audit report.” The time partners spend discussing risks with their clients is helping them understand their own business position more fully. Bonnie Zelman, director – quality control at Shimmerman Penn, notes: “They help their clients understand that the financial statements belong to them – they need to assess the impact of financial uncertainty on their business.” This helps to bring an advisory element to the audit – but at the same time firmly maintains independence.

Pantel comments that the high-level discussions Shimmerman Penn is having with clients about their current and future business provides – in the longer term – an opportunity to “relook at the value of audit and turn the tide away from its commoditisation”.

THE FUTURE There are clearly challenges ahead for auditors; however, PrimeGlobal firms are highlighting that there have also been positives. They understand their clients’ business better

Anthony Woodings, Hurst

than ever, and their clients have a better understanding of what is required to audit. Audit teams are learning from partners as they see how they address challenging judgemental areas and how to have difficult conversations with clients. This exposure is helping train and equip the next generation of auditors. PrimeGlobal firms are also exploring further collaborative technology which will increase efficiency and effectiveness of audits – for example, by looking at the potential of augmented reality headsets that project computer-generated images and tools onto a visor in front of your eyes. The client would wear the headset to enable remote auditing so, for example, they could walk into a warehouse full of boxes, scan the room and the technology would tell the auditor in an instant how many items are there. It can also be used to review working papers remotely. In a day, an auditor could review working papers in Singapore, review inventory in Germany and remain at home in time for dinner in Manchester! At PrimeGlobal we are committed to bringing our firms together to share practices to improve audit effectiveness, use technology, train staff and enhance audit quality. Post Covid-19, the need for audit will be stronger than ever, with stakeholders requiring assurance about the resilience of businesses. The value of audits may also be better understood by business. The crisis has given us many reasons to be proud of our auditors. That would be a headline about audit that, for once, should make us all smile for the right reasons!

www.internationalaccountingbulletin.com | 29

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I n te r na ti o n a l A c c o u n t i n g Bu lletin repor ts on A udi t Indepen dence a n d i m p ro v e d Gov er nan ce i n Ger man y

IAB Rankings feature | germany

germany: pressing for

audit independence and improved governance The audit profession in Germany has seen the debate around stricter regulatory measures for procedures in auditing intensify in the wake of the highly damaging Wirecard scandal. Paul Golden reports

uditing in Germany was already in turmoil before the coronavirus pandemic began to have an impact following the revelations about ﬁntech Wirecard, whose insolvency left creditors owed in excess of €3bn. Hendrik Auge, auditor and tax consultant at MSI Global Alliance member firm Wortmann & Partner, observes that the responsible auditor and the auditing profession were heavily criticised, intensifying the long-standing discussion about stricter regulatory measures for procedures in auditing. “This scandal has severely damaged the reputation and standing of the auditing profession in Germany,” he says. “The Institute of Auditors and the Chamber of Auditors are currently trying to limit the damage and there is an open debate about measures to be taken. It remains to be seen what actions will be taken by legislature.” Angelika Seuster, head of the German audit working group of HLB Germany, is confident that the audit profession will face significant regulatory developments in the near future due to the collapse of Wirecard, referencing the Government publication of a first draft of a financial market reinforcement of integrity act. “This will have significant impacts on the auditors of public listed entities, such as a mandatory rotation after 10 years with no possibility to extend this period or the prohibition of non-audit services,” she says. “The objective of this act is to restore confidence in the German capital market. These restrictions might extend in the medium term to auditors of non-PIEs and mid-sized audit firms.” Michael Grüne, tax consultant, and auditor and partner at MGI Worldwide member

firm Menold Bezler, highlights three levers to increase the auditor’s independence: • Auditors should have to change more often; • The specifications for the separation of audit and advisory services for clients that are companies of public interest (listed companies, banks and insurance companies) should be tightened to avoid conflicts of interest • Auditors will be required to be liable in cases of gross negligence without limitation. “The maximum liability limit in cases of simple negligent conduct shall be raised from €4m to €20m in case of audits of PIEs,” he adds.

SUPERVISORY ISSUES Ines Thorwart, tax advisor at PKF Germany, notes that due to the Wirecard scandal, the Federal Ministry of Justice has terminated the recognition agreement with the Deutsche Prüfstelle für Rechnungslegung e.V. (DPR) with effect from 31 December. “It remains questionable, therefore, whether a reorganisation of supervision will be undertaken in this case,” says Thorwart. “The German government’s action plan to combat balance sheet fraud and strengthen control over capital and financial markets includes improving supervision – in particular reviewing the two-tier system – and strengthening corporate governance.” The German enforcement procedure for capital market-oriented companies as well as banks and insurance companies has had a two-tier structure with the DPR as the first

stage and the Federal Financial Supervisory Authority (BaFin) as the second. The DPR is an association organised under private law that was recognised by the Federal Ministry of Justice for the purpose of examining violations of accounting regulations. Companies are selected for an audit at random, based on an event or at the request of BaFin, and are free to participate; however, if participation is refused, BaFin can open its own second-level audit and, as the supervisory authority, demand participation. Even if the company does not acknowledge the findings of the DPR, or if BaFin has substantial doubts about the performance or result of the DPR examination, BaFin will conduct its own examination. There has also been a new version of the German corporate governance code, the Act on the Transposition of the Second Shareholder Rights Directive and the Act on the Further Implementation of the Directive Amending the Transparency Directive Regarding a Single Electronic Format for Annual Financial Reports (ESEF). “The corporate governance code has been revised with a view to ensuring that the formal terms are focused on principles so as to reduce redundant duplications of the German Stock Corporation Act and establishing a new category of principles,” explains Andrea Bruckner, member of the executive board at BDO Germany. The new edition of the German corporate governance code clarifies the impartiality requirements for shareholder representatives, while the amended Shareholder Rights Directive included a change to the formal terms in line with the requirements for remuneration of the management board.

16 | November 2020 | International Accounting Bulletin

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I n te r na ti o n a l A c c o u n t i n g Bu lletin repor ts on A udi t Indepen dence a n d i m p ro v e d Gov er n an ce i n Ger man y

iab rankings feature | germany

current situation and there is consensus that without them, a high number of insolvencies would have been likely.

REACTING AND REPORTING

“Covid-19 has made statements for the future dramatically more difficult,” notes Tobias Polka, partner at MSI Global Alliance member firm ADKL. “This task is the main challenge in the crisis. It is about identifying risks at an early stage, and reacting and reporting on them accordingly.” Fiscal authorities demanding more records, Hendrik Auge, Wortmann & Partner documents and tax returns to be sent digitally Ines Thorwart, PKF Germany software tool they use and the ability to has caused many firms to focus on digital ESEF came into force in August, and communicate with their consultant.” processes says Michael Thelen, tax consultant concerns all stock corporations and limited Germany’s pre-coronavirus accounting at Allinial Global member firm KBHT. commercial partnerships that issue securities industry was also characterised by a shortage “Meanwhile, as Brexit-related developments in the capacity of German share issuers of skilled workers – a trend that has affected remain in limbo, many clients in the EU and are not defined as companies. These all participants and will continue to be an and UK are awaiting developments that may organisations must prepare annual and issue after the pandemic has abated. That affect their international dealings,” he says. consolidated financial statements and the is the view of Alexander Leoff, partner at Digitisation was already on the agenda for (group) management report in XHTML, MGI Worldwide member firm Votum, many firms, and coronavirus has accelerated and tag certain information in statements in who refers to strong demand for budgeting that process. “Many firms and individuals accordance with the IFRS taxonomy using inand auditing services. “The changeover in who were previously slow movers suddenly line specifications for financial years starting value added tax from 19% to 16% has also had to adapt and have embraced the new after 31 December 2019. caused considerable consulting and system way of working,” says Thomas Althoff, “As part of the audit, the auditor must implementation costs, although demand partner at MGI Worldwide member firm assess whether the electronic rendering of the for M&A consulting services has come to a RLT Ruhrmann Tieben & Partner. “That annual or consolidated financial statements complete standstill,” he says. will make firms stronger, and hopefully help and the (group) management report complies The lack of talent and looming retirement them survive the economic aftermath of the with the ESEF requirements,” says Bruckner. of many senior professionals is a key concern pandemic, which cannot yet be foreseen.” “The auditor must report on the outcome of agrees Marcus Scheurer, partner RWT Ecovis Germany is another firm that this assessment in a separate section of the Crowe. “Helping clients to get financing has introduced new and more digital work auditor’s opinion.” and government support has been our main processes explains tax consultant Alexander Ulrich Britting, managing partner at task this year,” he adds. “This included the Weigert. “We have focused on providing PrimeGlobal member firm BA-Group, notes short time allowance as well as direct support our clients with the most important and that Germany has implemented a variety of payments and state-guaranteed loans.” up-to-date information to show them what regulatory actions in response to coronavirus The health of the accounting industry in opportunities they have,” he says. including decreasing VAT, implementing Germany prior to coronavirus was pretty “Last year we launched a service platform short-time working grants, introducing good, suggests Carsten Deecke, partner at to facilitate work and communication with regulations to credit and lease deferments Morison KSi member firm Dierkes Partner. our clients which gives them access to every and a serious of grants to heavily impacted “However, the battle to win clients is still industries and businesses. going on, and fees for audit jobs are low and Another significant change was the under pressure,” he adds. temporary suspension of the obligation to Achim Schweizer, partner at MSI Global file for insolvency. “As a rule, companies in Alliance member firm MOOG says his firm significant financial difficulties are obliged by has digitised the exchange of data with clients law to file for insolvency within three weeks and provided them with various cloud-based and managing directors not abiding by these platforms since the start of the pandemic. rules will be prosecuted,” explains Volker “We offer a simple and secure solution Ervens, fellow auditor and tax consultant at for data upload and download, but also Wortmann & Partner. complete collaboration solutions for handling Under the new regulations, this obligation complex projects,” he concludes. “The area of to file for bankruptcy has been suspended videoconferencing has been greatly expanded until 31 December for all companies that and to ensure that our clients receive ongoing find themselves in difficulties as a result of the advice, we have further strengthened our coronavirus pandemic. These measures allow $_ol-v Ѵ|_o@ķ ! $ ! _ul-mm $b;0;m ş -u|m;u home office services for employees.” companies more freedom to cope with the

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I n t e r n a t i o n a l A ccou n tin g Bu lletin G e r m a n y - N e t w o r k s & A ssoci ati ons: Fee D ata

iab rankings | germany

germany

Networks & associations: fee data

Networks

Rank

Name

Fee income last year (EURm)

Growth (%)

Fee split (%) Audit & 11oÂ†mŕŚžm] assurance services

Tax

Advisory

Other

Year end

PwC*

2,130.2

1,977.1

n.d

EY*

2,006.5

1,880.3

n.d

Jun-19

KPMG*

1,776.0

1,710.0

n.d

Sep-19

;Ń´obÂ‚;Ĺ–

1,069.0

1,016.0

n.d

May-20

ETL Global*

874.9

812.5

Dec-19

;ÂŠb- m|;um-ŕŚžom-Ń´Ĺ–

294.3

272.9

Jun-19

BDO* (1)

285.5

241.3

18%

Sep-19

Jun-19

HLB*

216.1

202.3

Dec-19

( " m|;um-ŕŚžom-Ń´Ĺ–

176.4

164.5

Dec-19

-h;u $bŃ´Ń´Â‹ m|;um-ŕŚžom-Ń´Ĺ–

165.0

155.0

Dec-19

Mazars*

151.7

135.9

12%

Aug-19

m|;um-ŕŚžom-Ń´Ĺ–

144.0

145.1

-1%

Jun-20

Grant Thornton m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć‘Ĺ‘

129.5

104.2

24%

Sep-19

Moore Global*

128.4

121.1

Dec-19

Crowe* (3)

108.7

134.2

-19%

Dec-19

RSM* (4)

71.0

102.3

-31%

Dec-19

u;v|om m|;um-ŕŚžom-Ń´Ĺ–

61.6

57.2

Oct-19

Russell Bedford m|;um-ŕŚžom-Ń´Ĺ–

45.8

41.5

10%

Dec-19

Auren*

24.3

21.9

11%

Dec-19

!;-m7- m|;um-ŕŚžom-Ń´Ĺ–

14.2

12.4

15%

Dec-19

9,873.1

9,307.7

Total fee income/growth

Associations

Fee income (EURm)

Praxity*

247.9

228.4

n.ap

PrimeGlobal*

106.8

108.6

-2%

May-20

MGI Worldwide with CPAAI*

78.9

n.ap

Morison KSi*

76.5

72.7

Dec-18

! m|;um-ŕŚžom-Ń´Ĺ–

52.5

50.0

n.d

n.ap

Antea*

46.5

44.3

Dec-19

m|;um-ŕŚžom-Ń´Ĺ–

32.5

31.5

Sep-19

Allinial Global*

24.1

24.0

Dec-19

Inpact*

23.6

22.9

Dec-19

& + m|;um-ŕŚžom-Ń´Ĺ–

21.8

20.8

Dec-19

m|;]u- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć”Ĺ‘

19.7

18.7

Dec-19

Abacus Worldwide* (2)

13.7

5.2

163%

Dec-19

IAPA*

10.9

11.2

-2%

Dec-19

" m|;um-ŕŚžom-Ń´Ĺ–

6.0

5.2

15%

Dec-19

m|;um-ŕŚžom-Ń´Ĺ–

3.0

2.8

Dec-19

764.3

646.3

Total fee income/growth

18 8 | No Nov November ve mb vemb ve mber er 2 2020 02 2 0 | In IInternational tern te rn n att io o na nall Ac Acco Accounting coun co unti un t ng ti gB Bulletin ulle ul leti le tin ti n

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I n te r na ti o n a l A c c o u n t i n g B u lletin repor ts on the i mpact of a variet y o f pro p o s e d a n d a c t u a l re gu l ator y ch an ges i n The Nether l an ds

iab rankings feature | the netherlands

the netherlands:

supervisor’s role to become a priority Beyond the profession’s response to the coronavirus, accounting in the Netherlands has been impacted by a variety of proposed and actual regulatory changes over the last 12 months. Paul Golden reports

I 27

n January, the Monitoring Committee Audit (MCA) in the Netherlands presented a report entitled A mirror for the audit market, and later that month the Commission on the Future of Audit (CTA) presented its ﬁndings. One recommendation was the appointment of two quartermasters, who were appointed in May 2020 and have a role in ensuring careful execution of the recommendations of the commission. “We believe this is a good move,” says Pascal Belfroid, partner at BDO Netherlands. “As firms, we also need to communicate better about our own change programmes and the results accomplished, even though we are not across the finishing line yet.” Crowe Foederer managing partner Johan Daams notes that at the end of September, the NBA (the professional organisation for over 20,000 accountants in the Netherlands) sent a letter to the Dutch parliament about further deepening of audit quality. “Part of this letter includes an obligation for the auditor to include a standard paragraph in the auditor’s report about fraud risks and continuity,” he explains. “With this initiative, the NBA does not want to wait for legislation, but rather arrange it itself.” Another topic for discussion is the role of the supervisor adds Gijs Veenenbos, managing partner at Crowe Peak. “Many Dutch audit offices are currently under the supervision of the SRA [a network of 375 independent accountancy firms] or the NBA, but it is the intention that all offices will soon be directly supervised by the Netherlands Authority for the Financial Markets [AFM].”

For companies in the large business class – those with more than 250 employees – it is expected from the 2022 financial year that it will be mandatory to file annual accounts digitally via standard business reporting. Belfroid suggests that prior to coronavirus, most audit and accounting firms in the Netherlands faced two major challenges: recruitment and retention of sufficient (diverse) professionals, and managing internal culture-change programmes to improve audit There is still a large focus on preventing quality. “This has not changed, and indeed money laundering and financing of terrorism these challenges only become bigger now we says Juanita Cid, partner at Kreston Lentink all work from home,” he says. Audit. “In July 2018 the fourth EU directive Due to audit developments, demand in this was implemented in the Netherlands leading area is growing, suggests Daams. “Demand to, among others, an obligation of risk for IT security services is also rising because analyses of all clients,” she says. of the risk awareness in this area,” he adds. “The AFM also obligated audit firms to The number of accounting firms with an comply with systematic integrity risk analyses. audit permit is shrinking because of extended We see that audit firms and accounting and regulations over the last few years observes tax firms in general are still working on Achahbar. “The number of audit engagements implementing the procedures to comply with per audit firm is therefore increasing,” he says. the new regulations.” “Fewer players equals more opportunities, which gives a boost to the health of accounting firms with an audit permit.” Service areas experiencing increased demand this year will include services for transfer pricing, as this topic becomes more urgent for the Dutch tax authority adds Achahbar. “There will also be more demand for audits as a result of mergers and acquisitions, as well as restructuring, while based on the current circumstances there will be less ‘regular’ advising.” Koen Gerritsen, managing partner at Ecovis BonsenReuling, agrees that recruitment has been an issue with many -mb|- b7ķ u;v|om ;mঞmh 7b| accounting firms expecting growth in Rachid Achahbar, audit and assurance manager at Allinial Global member firm HLG, refers to mandatory ultimate beneficial owner registration, as well a change in labour law intended to narrow the gap between permanent and flexible contracts, and a decrease in the rate of corporate income tax.

RISK ANALYSES

20 | November 2020 | International Accounting Bulletin

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I n te r na ti o n a l A c c o u n t i n g B u lletin repor ts on the i mpact of a variet y o f pro p o s e d a n d a c t u a l re gul ator y ch an ges i n The Nether l an ds

iab rankings feature | the netherlands

shortage of capacity and not only recruited new employees to start in April, but also another tranche in September. “The Covid-19 prevention measures have a big effect for new employees,” she says. “The way of working has shifted to working more from home and digitally, and with this new way of working it is especially difficult to give young new employees the support and attention they need. It has created a situation in which all of us need to have more patience and a flexible approach towards clients and colleagues alike.” From a professional perspective, she describes these as challenging and interesting Koen Gerritsen, Ecovis BonsenReuling times to be in an accounting and tax firm. “The government issued several measures to turnover and profit, even after taking into help companies and these keep changing. account the effects of the pandemic. “We Clients rely on us to advise them on these see growth in audit requests for financial initiatives, so from day one we started statements and accounting services for foreign informing them on the status of government clients,” he says. measures, what they could do themselves One of the first actions undertaken by and what we could do for them. We have PrimeGlobal member firm Visser&Visser supported and continue to support clients following the coronavirus outbreak was to with government measures and cashflow contact clients to inform them about the advice.” various emergency financial schemes the Dutch government put in place explains international tax partner Erik Klop. “In order to advise our clients about the temporary emergency bridging measure Many firms observe that their involvement for sustained employment we set up a team has increased since October because of with advisors from different departments: required reporting obligations in relation to accounting, tax and HR,” he adds. “This team the government support companies received leads the application process, and with the during the first lockdown period from March final settlement of the grant, assists clients up to May. With taxpayers’ money being spent, to an audit if required.” public interest in the support programmes The firm is in constant contact with clients introduced by government is high and fraud with regard to the estimation of their revenue risks are more of an issue than ever. and liquidity says audit and international As well as demonstrating to the public that business director Wilbert Snoei. “A business accountants have professional scepticism, they and financial stress test is part of the are also under greater pressure to produce service we deliver, for which we make use timely accounts with clients so focused on of dashboards that give us insight in their cashflow. financial position,” he explains. Marco Vermin, member of the executive Visser&Visser has also built a tool that board of directors at DFK member firm gives it 360-degree customer view. “We can Alfa, says almost all his clients undertook an see all relevant aspects of a client from legal impact analysis of the crisis on their business contracts up to the filed tax returns, and for which they sought help from the firm. from data about employees up to their most “Accurate monthly and quarterly reports and recent turnover numbers,” says Klop. “By estimates of the impact on the coming year pulling all that data together, we are able to were highly sought after,” he continues. “The detect and point out potential risks as well as advisory branch, tax and legal had less work advising them in advance about opportunities. initially because almost all businesses had to Data-driven advice is an opportunity that the take stock of their position in the early stages, accounting market can explore much more but demand for advisory services increased extensively.” after just a month or two.” Recruitment has also been an important Since the start of the pandemic, BDO issue at Kreston Lentink Audit. Cid explains Netherlands has created a multi-disciplinary that prior to coronavirus, the firm had a team of specialists consisting of consultants,

GOVERNMENT SUPPORT

Erik Klop, Visser&Visser

legal and fiscal advisers, accountants and auditors to support clients on issues relating to Covid-19. “At the start of the pandemic, additional work primarily related to assistance with the technical details of government coronavirus grants and cash management issues, but it now also includes advice on how employees can work from home safely and effectively,” says Belfroid. “We are involved in assurance work on the settlement of government coronavirus subsidies. The professionals involved have been undergoing a special training programme and are now planning. This has also impacted our client onboarding possibilities as we have less capacity available for regular new audit work.” According to Sjoerd Kuiper, partner at MGI Worldwide member firm Verstegen auditors and consultants, while the firm created a team to help clients apply for the support measures which were put in place, the biggest part of the work of accounting for subsidy funds is still to come. “When the coronavirus outbreak started in the Netherlands, we saw that business acquisitions were put on hold, so demand in our corporate finance and mergers and acquisitions department was somewhat lower,” he says. “Luckily, we recovered pretty fast and went back to business as usual, so in general we do not see any specific changes in demand for our various types of service this year.” Veenenbos says his firm has supported clients by facilitating remote audits with working from home using digital solutions. “We have also been flexible where possible in terms of planning,” he concludes. “Of course, we have assisted all customers with temporary emergency scheme for job retention applications, and will later on support them with the application for determination and with control activities if necessary.”

www.internationalaccountingbulletin.com | 21

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iab rankings | netherlands

netherlands

Networks & associations: fee data

Networks

Rank

Name

Fee income last year (EURm)

Growth (%)

Fee split (%) Audit & Accounting assurance services

Tax

Advisory

Other

Year end

;Ń´obÂ‚;Ĺ–

1,015.0

967.0

May-20

PwC* (1)

949.8

884.1

2019-20

EY*

859.8

832.4

n.d

Jun-20

KPMG* (e)

692.0

659.3

n.d

BDO*

293.8

282.0

Dec-19

Moore Global*

127.1

121.7

Dec-19

Mazars*

107.2

97.3

10%

Aug-19

-h;u $bŃ´Ń´Â‹ m|;um-ŕŚžom-Ń´Ĺ–

94.5

103.0

-8%

Dec-19

;ÂŠb- m|;um-ŕŚžom-Ń´Ĺ–

82.5

78.4

Jun-19

Crowe*

61.8

55.1

12%

Dec-19

RSM* (2)

59.4

50.5

18%

Dec-19

u;v|om m|;um-ŕŚžom-Ń´Ĺ–

59.2

57.5

Oct-19

Grant Thornton m|;um-ŕŚžom-Ń´Ĺ–

56.6

52.7

Sep-19

HLB*

53.7

48.5

11%

Dec-19

m|;um-ŕŚžom-Ń´Ĺ–

25.5

24.9

Jun-20

ETL Global* (3)

25.5

18.1

41%

n.d

Dec-19

Russell Bedford m|;um-ŕŚžom-Ń´Ĺ–

20.5

18.6

10%

Dec-19

UHY*

18.2

15.4

18%

Dec-19

( " m|;um-ŕŚžom-Ń´Ĺ–

13.3

12.2

Dec-19

Auren*

6.9

Dec-19

!;-m7- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć‘Ĺ‘

0.6

0.3

114%

Dec-19

TGS Global*

n.d

9.3

n.d

4,622.8

4,395.2

Total fee income / growth

Associations

Fee income (EURm)

PrimeGlobal*

144.6

138.2

May-20

! m|;um-ŕŚžom-Ń´Ĺ–

142.7

133.9

n.d

n.ap

Praxity*

107.2

97.3

10%

n.ap

m|;um-ŕŚžom-Ń´Ĺ–

88.0

80.0

10%

Sep-19

MGI Worldwide with CPAAI*

34.0

n.ap

Morison KSi*

26.8

27.4

-2%

Dec-18

Allinial Global*

21.2

20.7

Dec-19

Abacus Worldwide

11.8

n.ap

Dec-19

m|;]u- m|;um-ŕŚžom-Ń´Ĺ–

9.4

Dec-19

Antea*

9.2

Dec-19

" m|;um-ŕŚžom-Ń´Ĺ–

6.6

n.ap

Dec-19

Inpact* (2)

5.2

3.2

61%

Dec-19

m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć“Ĺ‘

3.8

2.2

72%

Dec-19

IAPA*

3.7

3.8

-3%

Dec-19

614.3

525.3

Total fee income / growth

22 | No N November vember e 2 2020 020 | Internatio International o nal Acco Accounting o un unti ting ti ng B Bulletin ulle ul eti tn

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iab rankings | france

france Networks & associations: fee data

Networks

Rank

Name

Fee income last year (EURm)

Growth (%)

Fee split (%) Audit & 11oÂ†mŕŚžm] assurance services

Tax

Advisory

Other

Year end

;Ń´obÂ‚;Ĺ– Ĺ?;Ĺ‘

1,445.9

1,377.0

n.d

EY*

1,175.0

1,164.0

Jun-20

KPMG*

1,143.0

1,074.0

n.d

Sep-19

PwC* (e)

1,015.4

967.0

n.d

Jun-19

Mazars*

405.3

383.6

Aug-19

HLB*

194.0

176.7

10%

Dec-19

Grant Thornton m|;um-ŕŚžom-Ń´Ĺ–

190.7

179.6

Sep-19

u;v|om m|;um-ŕŚžom-Ń´Ĺ–

160.0

157.8

Oct-19

BDO*

154.9

145.5

Dec-19

Crowe*

125.9

115.3

Dec-19

-h;u $bŃ´Ń´Â‹ m|;um-ŕŚžom-Ń´Ĺ–

125.4

116.6

Dec-19

RSM*

115.0

106.6

Jun-20

;ÂŠb- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć?Ĺ‘

105.4

95.5

10%

Jun-19

TGS Global*

101.8

89.2

14%

Sep-19

m|;um-ŕŚžom-Ń´Ĺ–

28.0

27.6

Jun-20

Russell Bedford m|;um-ŕŚžom-Ń´Ĺ–

20.6

20.0

Dec-19

Moore Global*

19.1

18.8

Dec-19

( " m|;um-ŕŚžom-Ń´Ĺ–

5.3

5.0

Dec-19

Total fee income/growth

Associations

Fee income (EURm)

6,530.8

6,219.8

Praxity*

415.4

393.3

n.ap

PrimeGlobal* (2)

280.9

244.9

15%

May-20

Allinial Global*

149.7

162.2

-8%

Dec-19

MGI Worldwide with CPAAI*

46.5

n.ap

Morison KSi* (3)

46.0

59.7

-23%

Dec-18

m|;um-ŕŚžom-Ń´Ĺ–

29.0

29.1

Dec-19

m|;]u- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć?Ĺ‘

28.1

8.3

239%

Dec-19

m|;um-ŕŚžom-Ń´Ĺ–

18.4

17.0

Sep-19

" m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć“Ĺ‘

16.6

10.3

62%

Dec-19

IAPA*

13.1

13.3

-1%

Dec-19

Abacus Worldwide* (1)

8.1

1.8

350%

n.d

Dec-19

Inpact*

6.3

6.1

Dec-19

Antea*

4.1

4.0

Dec-19

1,062.3

950.0

Total fee income/growth

24 | No N November vemb ve mber er 2 2020 0 0 | In 02 Int International te rn n at atio iona io nall Ac na A Accounting cco c un co ntii n ng gB Bulletin u le ul leti tin n

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iab rankings | italy

italy

Networks & associations: fee data

Networks

Rank

Name

Fee income last year (EURm)

Growth (%)

Fee split (%) Audit & Accounting assurance services

Tax

Advisory

Other

Year end

EY* (1)

351.3

390.7

-10%

n.d

Jun-19

KPMG* (2)

234.7

214.3

10%

n.d

Sep-19

PwC*

224.0

230.0

-3%

n.d

Jun-20

;Ń´obÂ‚;Ĺ–

167.8

157.9

n.d

May-20

BDO*

85.2

75.3

13%

Jun-20

Grant Thornton m|;um-ŕŚžom-Ń´Ĺ–

43.2

38.9

11%

Sep-19

Crowe*

39.0

35.1

11%

Dec-19

HLB*

36.8

34.3

Dec-19

-h;u $bŃ´Ń´Â‹ m|;um-ŕŚžom-Ń´Ĺ–

36.1

32.5

11%

Dec-19

RSM*

28.5

25.2

13%

Dec-19

;ÂŠb- m|;um-ŕŚžom-Ń´Ĺ–

26.6

25.1

Jun-19

Mazars*

22.6

25.4

-11%

Aug-19

Moore Global*

15.7

15.6

Dec-19

u;v|om m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć’Ĺ‘

10.1

14.0

-28%

Oct-19

m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć“Ĺ‘

8.8

9.0

-2%

Jun-20

( " m|;um-ŕŚžom-Ń´Ĺ–

8.8

9.1

-3%

Dec-19

Russell Bedford m|;um-ŕŚžom-Ń´Ĺ–

7.8

8.3

-6%

Dec-19

!;-m7- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć”Ĺ‘

3.0

1.3

120%

Dec-19

TGS Global*

n.d

1.4

n.d

1,349.9

1,343.2

0% Dec-19

Total fee income / growth

Associations

Fee income (EURm)

Allinial Global*

92.7

98.0

-5%

Praxity*

74.6

77.4

-4%

n.ap

Inpact*

12.7

12.6

Dec-19 May-20

PrimeGlobal*

10.7

11.3

-6%

m|;]u- m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć’Ĺ‘

7.2

10.6

-32%

Dec-19

! m|;um-ŕŚžom-Ń´Ĺ–

7.1

6.9

Dec-19

MGI Worldwide with CPAAI*

7.1

n.ap

& + m|;um-ŕŚžom-Ń´Ĺ– Ĺ?ŃľĹ‘

3.9

6.0

-35%

Dec-19

Antea*

3.6

3.5

Dec-19

Morison KSi*

3.3

3.6

-8%

Dec-18

Abacus Worldwide*

2.8

2.3

20%

n.d

Dec-19

m|;um-ŕŚžom-Ń´Ĺ– Ĺ?Ć•Ĺ‘

2.7

1.0

184%

Sep-19

m|;um-ŕŚžom-Ń´Ĺ– Ĺ?ŃśĹ‘

1.9

1.5

23%

Dec-19

" m|;um-ŕŚžom-Ń´Ĺ–

1.8

1.7

Dec-19

UC&CS Global*

0.2

Dec-19

IAPA*

n.d

16.3

n.d

232.4

253.1

-5%

Total fee income / growth

2 | No 26 N November vemb ve mber be err 2 2020 02 020 2 0 | In Int International tern r at rn atio iona n l Ac Acco Accounting coun unti ting ng B Bulletin ulle ul leti tin n

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Inter n a t i o n a l A c c o u n t in g Bu lletin repor ts on regul ator y im p o v e m e n t s t o b oost Fi nan ci al S ecur i ty i n Ch i l e

IAB Rankings feature | chile

chile focuses on

regulatory improvements to boost financial security Tax and regulatory reform has been the focus of the accounting profession in Chile this year, as the government seeks to boost an economy already negatively impacted by social unrest. Paul Golden reports

ven allowing for the upheaval caused by coronavirus, Chile has experienced significant change during 2020. In February, a law was published that modifies the calculation of estimated monthly provisional payments for business income, and a new invoice payment law stated that all invoices issued after 1 April 2020 must be paid within a maximum of 30 calendar days from receipt. Outlining the changes, Diego Garcia, a partner at CMS LatAm, note that taxpayers had the right to choose to be subject to the new tax regimes established within this year’s tax reform on or before 30 September. Miguel Ossandón, principal partner at BKR International member firm Ossandón Consultores, says the new regime will mean a significant decrease in tax rates for small businesses. The areas that have grown the most in recent years relate to tax issues – including comptrollership and tax compliance – since the country has undergone changes with new tax reforms in a very short period due to changes of government explains Marcelo Obregón, senior partner at DFK member firm Obregón y Asociados. “We have realised that the areas that have been affected are related to services to foreign clients who wish to invest in Chile, since in some cases they distrust the tax system that we have today and any changes that are carried out in the short term, modifying procedures and forms of taxation,” he says. “This has meant that many foreign clients have made the decision to take their investment to another destination in the region.” Aside from tax reform, the most significant developments have been related to the

adoption of international accounting rules – mainly NIIF 9, NIIF 15, NIIF 16 and IFRIC 23 – according to Viviana Rojas Hormazabal, partner at MGI Hernán Espejo y Asociados. “From a local regulatory perspective it would be important to mention the restructuring of the former Superintendencia de Bancos e Instituciones Financieras [Superintendency of Banks and Financial Institutions] into the Comisión para el Mercado Financiero [Commission for the Financial Market],” she says. This entity now regulates and supervises the insurance, banking and financial markets in Chile.

REGULATORY SUPERVISION The merger means Chile has a single autonomous government entity for regulatory, supervision and sanctioning aspects, observes Sergio Bascuñan, international liaison partner at Crowe in Chile. “We have seen measures focused on fiscal support, liquidity, operational continuity of companies and regulators, supervisory activities and regulatory flexibility,” he says. “There has also been a focus on regulatory improvement in banks, securities and insurance.” Since the start of the pandemic, measures to contain its effect on the economy have been implemented by the Ministry of Finance, the Central Bank of Chile and the Commission for the Financial Market. Crosscutting risks in the financial industry are monitored by the Financial Stability Council, a body that includes the three institutions referenced above and the Superintendency of Pensions. Juan Marín, managing partner at Kreston Macro Consultores Auditores, explains that

since October 2019, initially in response to social disturbance and latterly due to the effects of Covid-19-prevention measures, companies have been forced to increase levels of teleworking in order to minimise employees’ exposure to civic disorder, protests and physical risks. This activity has generated a huge amount of digital information, both in relation to accounting backups and certificates of compliance, he says. “Over the last five years or so, a digitisation process for accounting has been ongoing in Chile through the issuance of electronic invoicing, service tickets and electronic vouchers fees, all of which has been centralised annually through processes of remote and electronic tax returns, including monthly and annual sworn returns, dividend returns and withholding tax payments and foreign investment returns and transfer prices,” adds Marín. As a consequence, he suggests that around 99% of tax operations in Chile are now completed electronically, which has forced accountants and auditors to be familiar with digital services, use compatible software and meet clients virtually rather than in person. Accounting outsourcing and payroll are two service lines showing a rise in requests by clients, observes Marcelo Cabezas, managing partner at PrimeGlobal member firm Kennedy Auditores Consultores. “In our case, the traditional auditing area of financial statements has had a low demand due to strong competition,” he adds. Marín observes that services related to logistics have been greatly strengthened by mining development and the requirement to transfer products relating to coronavirus in large quantities.

16 | September 2020 | International Accounting Bulletin

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Inter n a t i o n a l A c c o u n t in g Bu lletin repor ts on regul ator y im p o v e m e n t s t o b oost Fi nan ci al S ecur i ty i n Ch i l e

iab rankings feature | chile

ones including the recent social unrest have impacted the dynamism of the economy as a whole,” he continues. “Services such as M&A – buy-side and sell-side mandates, due diligence and so on – in a small market like Chile have been deeply impacted, with M&A deals down by almost 40% in volume and value during the first seven months of 2020 compared with the same period last year. Other services, like audit and tax advice, have been facing a decrease in rates rather than in volume, so while they are less affected no growth has been observed.” Miguel Ossandón, Ossandón Consultores Cabezas recognises that social unrest has negatively impacted clients, especially those “There has also been a good development in the food services sector such as restaurants of innovative start-ups linked to bio and pubs. The BBC reported earlier this year -development, as well as IT,” he says. “We have that Chile has seen significant social unrest developed advice and consultancy services since October 2019, when protests first in the field of business reorganisations, both erupted over a planned rise in metro fares. from a corporate and labour perspective.” Growing anger over low wages, high costs In terms of audits, Marín refers to an of living and inequality sparked months of increase in demand derived from the unrest, and though this initially subsided as displacement of companies usually served Covid-19 spread, tension over food shortages by the Big Four, as well as from expanding during lockdown led to further protests. sectors such as investment funds. Hormazabal says the impact on her firm has been relatively limited, since her clients mainly operate in business areas not directly affected by these situations. “The main areas According to Hormazabal, the main areas that that have been impacted – whose sales rates have grown in value over the last few years for have been diminished as a result of protests auditing companies are BPO services, as well – are related to tourism, hotels, food service as digital transformation and data analysis in and entertainment, such as events organisers IT, while Ossandón says sectors where growth and leisure facilities.” was evident before Covid-19 included real “In general terms, we have not had estate, retail, food services, entertainment and customers massively and negatively affected IT consultancy and training. by this problem,” adds Marín. “However, we Bascuñan paints a gloomier picture, cannot fail to mention retail and restaurants suggesting that there is no service area as those affected by these conditions and where demand is growing, as a result of the that, as a result of the pandemic, have seen economy suffering a fall in the order of 13% their income decrease to zero, thus creating of GDP in the last 12 months. “Global a situation where many companies in this factors – such as coronavirus – and local segment are facing bankruptcy.” While the social unrest has affected almost all businesses, clients from specific industries, including construction and transport, have been particularly heavily impacted as they have faced direct consequences in the form of violence, vandalism and theft. That is the view of Bascuñan, who adds that it is relevant to note that the effects have been mainly limited to companies with their main operations in Santiago, where the core of the conflict has occurred. “However, this situation has impacted the expectations of consumers and businesses, so the wider Viviana Rojas Hormazabal, economic effect was higher than actual MGI Hernán Espejo y Asociados financial impact,” he explains.

GROWTH AREAS

Marcelo Obregón, Obregón y Asociados

Obregón adds that many businesses have been negatively impacted by the suspension of events to promote tourism in Chile. “Over the last 12 months, social unrest has significantly affected areas such as retail, restaurants, entertainment, transport and education, which have further been affected by Covid-19,” observes Ossandón. “Even though it is the case that the government has been too flexible and not very assertive in handling the situation, the perception that exists is that larger companies have not suffered too much from the social unrest. “There is even the impression that their situation is good and that when the current pandemic is over their equity will not be substantially affected, and they could be found to be in the same situation in which they were before the unrest began.” However, Ossandón adds that this is clearly not the case for small and mid-sized companies, for which the social unrest has significantly affected their businesses and assets, resulting in the sector having to lay off employees at a significant rate over recent months. “Chile’s growth for this year is not expected to exceed 2.9% according to official statistics,” he concludes.

Marcelo Cabezas, .HQQHG\ $XGLWRUHV &RQVXOWRUHV

www.internationalaccountingbulletin.com | 17

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In te r na ti o n a l A c c o u n t i n g Bu lletin repor ts on i mpl emen tati on o f re g u la t o r y fr a m e w o r k s rel ated to IF RS an d NIA S i n Col ombi a

iab rankings feature | colombia

colombia

strengthens its accounting standards Although not a recent development, the application of financial reporting standards continues to exercise the minds of Colombian accounting firms and their clients. Paul Golden reports

olombia has been working on the implementation of regulatory technical frameworks related to IFRS and NIAS for more than a decade. This process has forced accountants to change long-established practices. “An example of this is the calculation of the impairment of accounts receivable, which was previously generally linked to the provisions of the Colombian fiscal entity DIAN,” says Harley Andres Moya López, audit supervisor at HLB International member firm Peñalosa Consultores. “Generally, companies did not perform the calculation of this type of request because it did not affect the period’s results.” Colombian industry is made up largely of small and mid-sized companies, which to an extent has facilitated the implementation of IFRS, as these are entities that are not listed. Andres Moreno Ramirez, managing partner at PrimeGlobal member firm Astaf, notes that over the last two years the Technical Council of Public Accounting, as an advisory and consultant body for technical regularisation of accounting standards, financial information and information assurance, has developed a number of studies and pronouncements related to the application and interpretation of the new accounting and auditing principles under international standards that came into force in Colombia in 2016, and on the development of accounting activity. “The implementation of financial reporting standards in the country has opened up new markets, strengthened foreign investment and helped Colombia meet the requirements to join the OECD,” says Nancy Bermúdez Caraballo, partner at MGI Páez Asociados. “By simplifying the tax regime and unifying the standards for presenting accounting information, companies have gained the opportunity to enter new markets with ease.”

“Over the next 12 months we expect that the government will update the regulation of accounting activity in Colombia and all sectors are currently defining methodologies and work schedules,” says Carlos Molano, managing partner Mazars Colombia. “Audit activity will have a transformation in terms of technological updates and to adjust and establish better practices defined by international standards.”

IFRS 17 Another point of particular interest will be the regulation of IFRS 17 regarding new practices in the insurance industry, which requires many technological, actuarial and accounting changes and is expected to be a challenge for the accounting market. Molano observes that the Colombian government has made several critical regulatory changes to simplify taxation, including automatic tax refunds whereby taxpayers who are not classified as high-risk will receive their balances in favour within 15 days of completing the process, and suggested

Harley Andres Moya López, Peñalosa Consultores

income tax returns for individuals, which allows the cross-checking of information to identify the veracity of the taxpayer’s operations. “Previously, taxpayers had to comply with different formal tax obligations such as income tax, VAT, industry and trade tax and payroll,” he says. “Thanks to the simple taxation regime, some taxpayers can settle only a single tax. The filing of this return can be done electronically, which generates savings in transaction costs, and the simple taxation regime states that the taxpayer who is in this regime will not be subject to any withholding tax.” Crowe Colombia CEO Jorge Castelblanco agrees that strengthening the transition process for the adoption of IFRS and international standards of auditing has been the most significant development in the Colombian market in the last 24 months. “In terms of service areas, tax and BPO services have been growing due to the complexity of regulations,” he says. “Enterprises want to transfer responsibility for compliance to third parties to make them responsible in case of a requirement from a regulator.” It is important to clarify that developments in the accounting services industry do not necessarily imply digitising, and that firms can also innovate by offering new services as differentiators in the market. That is the view of Hector Fabio Mejia Herrera, consulting director at MGI VIA Consultoría, who adds that businesses require simple and easy-toimplement accounting solutions which move in the same direction as the regulatory bodies. “In the case of Colombia, the last Tax Reform Law 2010 of 2019 (Economic Growth Law) seeks to stabilise the country’s economy to raise money and cover the budget deficit,” he explains. “The coronavirus

20 | September 2020 | International Accounting Bulletin

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In te r na ti o n a l A c c o u n t i n g Bu lletin repor ts on i mpl emen tati on o f re g u l a t o r y fr a m e w o r k s re l ated to IF RS an d NIA S i n Col ombi a

iab rankings feature | colombia

â€œThis work covers the technical monitoring of the execution of contracts of different types and also refers to the administrative, financial, accounting and/or legal aspects of the contract,â€? she explains. â€œWe have identified slower growth in demand for statutory audits where competition has been growing and increasing the difficulty in obtaining contracts, while there has also been a downward trend in prices.â€? Herrera also refers to pricing challenges. â€œVAT is a major problem when a prospective client has to choose between an accounting services company and an independent professional who will carry out the same Jorge Castelblanco, Crowe Colombia work,â€? he says. â€œAn independent professional will not charge VAT and does not have the pandemic means that the laws will require same operational costs, so they are much further adjustment.â€? cheaper to engage.â€? According to Alfredo Jose Lopez, managing â€œWe consider that at this time and based partner at Allinial Global member firm on the declaration of a state of economic, Alfredo Lopez & Company, the effects of the social and ecological emergency as issued pandemic are already evident in a number of by the national government in response to service areas, for example business lines such the coronavirus pandemic, the demand for as administrative and financial BPO services integrated accounting and financial services where demand has increased given the takes on greater importance and relevance as benefits that outsourcing of processes brings, it contributes to the countryâ€™s development including the targeting of expertise allowing and economic growth,â€? adds Caraballo. management to focus on the core business. â€œOn the other hand, demand for consulting services also shows growth as the need for firms to reinvent themselves in the face of new market challenges and new realities In Colombia the statutory auditor is a state create demand from entrepreneurs for advice delegate who must ensure that companies on strategy, processes and technology,â€? he says. comply with the rules in general, as well as Lopez observes that advisory services aspects related to social responsibility. The relating to the transition to IFRS have functions delegated to the statutory auditor decreased in demand because most companies include making sure that the operations have already completed this transition. â€œOn carried out on behalf of the company comply the other hand, tax services have acquired with the requirements of the statutes, the greater relevance in the market, not only due decisions of the general assembly and the to the need to save or optimise the tax burden, board of directors. but also because of the need to interpret the This person must also give a timely account new tax regulations that result from IFRS to the assembly or board of partners, the accounting regulations,â€? he adds. board of directors or the manager of any Natalia Mora, international relations irregularities in the operation of the company manager and partner at Kreston RM and in the development of its business, as well Colombia, says that in addition to external as collaborate with government entities that audit and consulting, there is also growing carry out inspection and surveillance of the demand for contracts audit. This is a service companies and render any reports requested. that is engaged by a state entity in three â€œFiscal reviewers are burdened with specific cases: responsibilities, which makes this work less â€˘ When the law has established the and less attractive for accounting firms to the obligation to have this figure in certain extent that the Big Four have begun to offer contracts; more and more the external audit service and â€˘ When the follow-up of the contract not that of statutory auditor since it is less requires specialised knowledge in the risky for the development of the profession,â€? subject matter thereof; says LĂłpez. â€œProof of this is that in 2019, the â€˘ When the complexity or length of the Superintendency of Companies published contract justify it. a study which concluded that 80% of fiscal

REGULATION

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auditor services in Colombia are provided by independent accountants, with small firms representing another 15% and the Big Four only 5%.â€? According to Ramirez, the accounting profession has a great opportunity to transform its strategic role for the development of Colombian companies with an international vision. He suggests the areas of greatest potential growth over the next decade are: â€˘ Financial advisory and investment banking, since comprehensive knowledge of the financial situation of companies under international standards allows for accounting to make valuations of assets, businesses and companies using global criteria as well as financial projections that make it possible to strengthen strategic decisions for capitalisation, acquisition, sale and merger of companies domestically and internationally; â€˘ Audit aimed at verifying processes with a high technological component, using robotics tools, data analytics, data mining and business intelligence; â€˘ Evaluation of cyber-risks and cybersecurity policies of new digital businesses, to measure and validate the design and safe interaction of new information technologies. â€œTraditional and labour-intensive accounting, auditing and tax services are in less demand as many public accountants are being replaced by sophisticated technological platforms and robotics processes,â€? he concludes. â€œTraditional accounting services are being replaced by more sophisticated processes of strategic consulting and business intelligence, which entails a great challenge for our accounting profession to adapt to these changes.â€?

www.internationalaccountingbulletin.com | 21

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International Accounting Bulletin interviews Steve Heathcote on the nature of webinars, knowledge share and supporting its member firms during coronavirus

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Focus Article

Communicating During a Crisis COVID-19 Proves Proper Planning Prevents Poor Performance Richard Shippee and Brunella Reid

There are times when a marketer’s role in crisis communications is so crucial it becomes a defining career moment. The COVID-19 pandemic and ensuing quarantine has been one of those moments.

But while COVID-19 might be one of the most severe crises in the past few decades, another disaster eventually will emerge, and firms and marketers that pay close attention learn from this situation. With every challenge comes an opportunity. Professional service marketers now, more than ever, are the voice of the firm, and their contributions will not only impact how they are seen as strategic leaders but also how they create long-term value and engender client loyalty. Gorana Stojanovic, global executive director of communications and strategy of PrimeGlobal, a Top 5 global association of independent accounting firms, said firms should focus on being trusted advisors in a time like this. “We are noticing that across all our firms, the trusted advisor status has been considerably enhanced, which will have a positive impact for years to come,” Stojanovic said. “Firms should use this to their advantage to show real value for their clients, but make sure to help out in a way that’s meaningful, not opportunistic.” Stojanovic recommends firms cancel previously scheduled posts and adjust

their content, keeping it simple and relevant. “Government policies and advice are changing daily and sharing relevant information can be a great resource for clients if done right,” she said. “Communicate about how you can support clients’ most immediate needs, particularly access to financial relief. Corporate transactions are not on the agenda right now, so teams are providing advice to build financial resilience long term, providing huge value and building client loyalty. This is the message that needs to shine through in all comms.” She also advises firms to be mindful of tone deafness or pushy paid digital advertising right now and to show empathy in all messaging, “especially when you need clients to take action during this difficult time.” While many professional services marketers might feel better prepared in leveraging appropriate content, most feel unprepared and downright nervous when dealing with crisis communications. Jackson Spalding, one of the Southeast’s largest independent marketing communications agencies, has helped clients navigate these difficult times. When asked about the biggest mistake firms make in a time of crisis, Bryan Harris, who manages crisis projects for a number of the firm’s clients, says firms should stay away from making predictions in the moment based on limited knowledge. “Many leaders made bold proclamations at the beginning of this situation related to its impact on the

country or their business that now look naive,” Harris said. “Leaders need to be honest with their people, especially in a crisis.” Firms should ensure not to create a “trust gap” where leaders have to “fall back on those original words,” he added. Focusing directly on the COVID-19 crisis and the steps CPA firms have taken over the past several months can provide us with a roadmap. “Agility and responsiveness are key,” said Jill Jacobs, chief marketing officer at Friedman LLP. “In a crisis situation, it is hard to predict where things will go next, so you should plan for different scenarios and be willing to adjust course quickly.” Drilling down, Jacobs said the COVID-19 crisis had its unique characteristics. “We asked, ‘what are the communications objectives, who are the stakeholders we need to reach, and what problematic scenarios do we want to avoid?’” Here’s how Friedman segmented their audiences: •

•

Employees: They zeroed in on steps taken to keep workplaces safe, then quickly moved to communications about remote working arrangements. As the crisis unfolded, they addressed new goals, such as keeping team spirits up while working apart for an extended period of time. Clients: Reassuring clients was key, including service continuity, how to reach key personnel and how to send records securely. It was Continued on page 19

Growth Strategies Summer 2020

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I n t e r n a t i o n a l A c c o u nt ing B u l l e t i n re p o r t s o n h o w PrimeGlobal is Leading Recovery Beyond Covid-19

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I n s i d e P u b l i c A c c o u n t ing re p o r t s o n T h o m s o n R e u t e r s a n d P r i m e G l o b a l Te a m i n g U p f o r V i r t u a l Ev e n t s o n D i v e r si ty

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Acco u n t a n c y A g e i n t e r v i e w s S t e v e H e a t h c o t e a n d o t h er as s o c i a t i on a n d n e t w o r k l e a d e r s a b o u t t h e f u t u re o f t h e i n dustr y

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Acco u n t a n c y A g e i n t e r v i e w s S t e v e H e a t h c o t e a n d o t h er as s o c i a t i on a n d n e t w o r k l e a d e r s a b o u t t h e f u t u re o f t h e i n dustr y

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Acco u n t a n c y A g e i n t e r v i e w s S t e v e H e a t h c o t e a n d o t h er as s o c i a t i on a n d n e t w o r k l e a d e r s a b o u t t h e f u t u re o f t h e i n d ustr y

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In ter national Accounting Bulletin interviews PrimeGlobal CEO

Steve He a th c ote on how PrimeGlobal firms are leading digital transfor m at i on

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In ter national Accounting Bulletin interviews PrimeGlobal CEO

Steve He a th c ote on how PrimeGlobal firms are leading digital transfor m at i on

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In ter national Accounting Bulletin interviews PrimeGlobal CEO

Steve He a th c ote on how PrimeGlobal firms are leading digital transfor m at i on

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T h e P ro g re s s i v e A c c o u n t a n t re p o r t o n T h o m s o n R e u t e r s and Prim e G l o b a l a g re e i n g t o P ro d u c e a s e r i e s o f I n t e r n a t i o n a l E vents

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We b W i re re po r t o n T h o m s o n Re ut e r s a n d P r i m e G l o b a l â€™s new G loba l S trat e g i c P a r t n e r s h i p t o P ro m o t e I nc l u s i v i t y a nd D i v er sit y i n t h e A c c o unt i ng P ro f e s s i o n

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CPA P r a c t i c e A d v i s o r re p o r t s o n T h o m s o n R e u t e r s and P r i m e G l o b a l P a r t n e r i n g t o P ro m o t e I n c l u s i v i t y a n d D i ver si ty

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CPA P r a c t i c e A d v i s o r re p o r t s o n T h o m s o n R e u t e r s and P r i m e G l o b a l P a r t n e r i n g t o P ro m o t e I n c l u s i v i t y a n d D i ver si ty

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A c c o u n t i n g To d a y re p o r t s o n T h o m s o n R e u t e r s and P r i m e G l o b a l â€™s n e w m u l t i - y e a r d i v e r s i t y - f o c u s e d p a r t n er shi p

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A c c o u n t i n g To d a y re p o r t s o n T h o m s o n R e u t e r s and P r i m e G l o b a l â€™s n e w m u l t i - y e a r d i v e r s i t y - f o c u s e d p a r t n er shi p

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In t er n ati o n a l A c c o u n t i n g B ulle t in re p o r t s o n h o w P r i m e G l o b al i s a s si s t i n g m e m b e r s i n t h e f a c e o f t h e C o v i d - 1 9 c r i s es

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I n t e r n a t i o n a l A c c o u n t i n g B u l l e t i n re p o r t s o n P r i m e G l o b al a ppoi n t i n g a n e w E x e c u t i v e D i re c t o r f o r A s i a P a c i f i c

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Ve r i t a s ( M exico ) art icle: Inp ut f rom PrimeGlob al memb er s J ua n I. R i v e ro (Rivero & Olivares , LA) & M a ri o Ga rc í a (C alvetti Fergus on, N A)

SALUD FISCAL

C.P.C., M.I. Y P.C.FI. Juan Ignacio Rivero Celorio Socio de Rivero y Olivares Contadores Públicos S.C. De la comisión Fiscal Internacional del Colegio Mario García Socio de Calvetti Ferguson, P.C., en Houston, Texas

INVERSIÓN

EN INMUEBLES EN EUA

y la reforma 2020

JUNTO CON EL CRECIMIENTO DEL PAÍS, AUMENTÓ LA OPORTUNIDAD DE QUE MEXICANOS INVIERTAN EN BIENES RAÍCES EN EUA. ¿CUÁLES SON LAS OBLIGACIONES FISCALES EN AMBOS PAÍSES? EN ESTE ARTÍCULO SE ANALIZAN DOS CASOS FRECUENTES.

as inversiones de mexica nos en bienes inmuebles en Estados Unidos de Améri ca (EUA) persiguen diferentes objetivos. Están quienes buscan una residencia para vacacionar, quienes quieren una casa de oportunidad en caso de necesitar o planear vivir allá, o los que consideran una gran opción de inversión por los beneficios económicos que su mercado de bienes raíces ofrece. Sin embargo, es importante saber que el hecho de invertir en ese país, y contar con un convenio para evitar la doble imposición e impedir la evasión fiscal en materia de impuestos sobre la renta, no elimina otras obligaciones que se puedan tener al ser propietario de una inversión inmueble de estas características. Así, se debe establecer que al adquirir una propiedad como individuo extranjero en EUA, se pueden generar impuestos de por encima de 40% al momento de transferirla, regalarla, venderla o heredarla, aparte de los costos de mantenimiento. Elaborar una estructura legal y fiscal para dicha inversión es un traje a la medida, aunque en la práctica,

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entre los clientes se pueden encontrar con que ya efectuaron una estructura que puede no ser la adecuada o la óptima. Por ejemplo, se debe saber que el Internal Revenue Service (IRS) de EUA obliga al inversionista extranjero a cumplir con el Foreign Investment in Real Property Tax Act (FIRPTA), así como a retener

impuestos cuando hay un intercambio de la propiedad, y a cumplir con los formatos relacionados. Por lo tanto, el FIRPTA debe ser considerado en conjunto con la estructura legal. En ese tenor, existen una diversidad de casos para dichas inversiones, pero el presente artículo

CASO 1. INVERSIÓN DIRECTA Cuando un inversionista sea propietario directo del bien raíz o de una sociedad considerada como transparente en EUA, que a su vez sea propietaria del bien como sigue: Inversionista / LLC (transparente) / Bien raíz

Inversionista / Bien Raíz

Inversionista

LLC (transparente)

Bien raíz

34 VERITAS FEBRERO 2020

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De esta manera, cuando se tiene la inversión en directo en el bien raíz, éste será sujeto del ISR cuando se enajene o se tenga algún ingreso relacionado, como lo pueden ser el arrendamiento, en el momento del ingreso, y sobre las reglas aplicables en México, con la posibilidad de acreditarse el impuesto pagado en el extranjero. Al invertir en entidades transparentes, que a su vez son propietarios de los bienes raíces, el título VI de la LISR establece que se tienen dos obligaciones al tener ingresos:

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Considerarlos como si fueran suyos, y acumularlos sobre la base mundial de rentas, como lo establece el artículo 1.º de la LISR. Presentar una declaración informativa sobre dichas entradas y los bienes mantenidos. Como se puede apreciar, el principio de Renta Mundial es aplicable en ambos casos, ya sea en directo o a través de la entidad transparente. Sin embargo, las obligaciones son diferentes, ya que en la inversión de entidad transparente también se involucra la declaración informativa, y la aplicación de otros preceptos que no se tienen como persona física. Como parte de la reforma fiscal para 2020, se establece que el concepto de entidad transparente se encuentra localizado como independiente. Actualmente obliga a entidades transparentes y figuras legales extranjeras a ser gravadas como personas morales y pagar el ISR. Cabe mencionar que por medio de una disposición transitoria, la tributación de dichas entidades se hará hasta el 1.º de enero de 2021. Dentro de la reforma fiscal no se modificó la obligación de la persona mexicana propietaria de la entidad transparente de también efectuar el impuesto, ahora sólo basta el hecho de acreditarse lo que se ha pagado

se enfocará en las tradicionales o más frecuentes: El concepto de transparente se generaliza para las entidades que en EUA eligen ser ignoradas o disregarded, las cuales varían de estado en estado, pero pueden ser Limited Liability Companies (LLC), partnerships, entre otros. Ahora, si se considera que el régimen fiscal mexicano no cuenta con un régimen de empresas transparentes, es importante clarificar el concepto de transparencia, que significa que los socios son responsables de acumular los ingresos de la sociedad de manera directa, y a su vez, la empresa ignorada indica que para propósitos fiscales ésta no existe y no tiene ninguna obligación en el país vecino. Es por ello que el obligado es la persona inversionista. Una vez aclarado esto, es necesario establecer que este tipo de inversiones de manera directa o a través de una sociedad transparente genera en EUA, entre otras, ciertas obligaciones para el inversionista:

Impuesto sobre la renta (income tax), cuando hay ingresos por arrendamiento, enajenación o venta del inmueble. Impuesto sobre la herencia. Registro en EUA y cumplimiento de declaraciones. Declaraciones informativas al IRS sobre la actividad con partes relacionadas, en caso de una transparente. Retención de 15% sobre los ingresos de la venta para el comprador en una venta del activo bajo FIRPTA. Por otro lado, es importante establecer que, a su vez, por la parte mexicana también se tienen ciertas obligaciones. En este sentido, vale la pena recordar el concepto de Renta Mundial, el cual establece que las personas residentes en México están obligadas a pagar el impuesto sobre la renta (ISR) respecto de todos sus ingresos, sin importar la fuente de donde procedan. Este precepto es aplicado en el artículo 1.º de la Ley del Impuesto Sobre la Renta (LISR).

VERITAS FEBRERO 2020

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Ve r i t a s ( M exico ) art icle: Inp ut f rom PrimeGlob al memb er s J ua n I. R i v e ro (Rivero & Olivares , LA) & M a ri o Ga rc í a (Calvetti Fergus on, N A)

SALUD FISCAL

con antelación. Sin embargo, es importante recordar que mientras no se tenga ingreso, no se tiene impuesto, pero aun así la reglamentación y las obligaciones cambian para declararse.

CASO 2. INVERSIÓN A TRAVÉS DE UNA COMPAÑÍA EN MÉXICO Cuando un inversionista es propietario de un bien, a través de una sociedad mercantil mexicana, que a su vez es propietaria de una sociedad en EUA, y también sea propietaria del bien raíz como sigue: Inversionista / Compañía (blocker) / LLC (transparente) / Bien raíz Inversionista

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Compañía (blocker)

LLC (transparente)

Bien raíz

Al considerar que en la actualidad se mantiene una sociedad transparente, las obligaciones principales con EUA, entre otros aspectos, son: Genera un income tax cuando hay ingresos por arrendamiento. Considera una sucursal sujeta al branch profits tax además del ISR a la sociedad mexicana.

Aplica income tax en caso de la enajenación o venta del inmueble. Requiere registro con el IRS en EUA y efectuar declaraciones. Debe presentar declaraciones informativas al ISR sobre la actividad con partes relacionadas. Una diferencia importante es que, al momento de la herencia o sucesión, la materia heredada son las acciones de una sociedad mexicana, lo que ayuda a no considerar la aplicación del impuesto sobre la herencia en el país vecino. Por lo tanto, es necesario aclarar el aspecto de sucesión familiar, ya que es común que los inversionistas originales hagan donaciones de las mismas. Razón por la cual dicha estrategia ha venido a suplantar el caso anteriormente descrito. Se mantienen hasta 2019 las obligaciones establecidas en el título VI de la LISR, y se establece que se tienen dos obligaciones cuando hay inversiones con ingresos a través de entidades transparentes:

Considerarlos si fueran suyos y acumularlos sobre la base mundial de rentas como lo establece el artículo 1.º de la Ley del ISR. Presentar una declaración informativa sobre éstos y los bienes mantenidos.

Una diferencia importante es que dicha obligación es de la persona moral, y en caso de tener ingresos, debe ver cuáles serían los efectos de una distribución hacia las personas físicas. Existe la posibilidad de que la entidad mexicana pudiese invertir en el

bien raíz de manera directa, lo que haría que la aplicación de las obligaciones para la sociedad mexicana sean similares que para la persona física, ya que la misma persona moral será sujeta del ISR cuando se enajene o se tenga algún ingreso relacionado, como el arrendamiento, en el momento del ingreso, y sobre las reglas aplicables en México, con la posibilidad de acreditarse el impuesto pagado en el extranjero. De la misma forma que para las personas físicas, las reformas fiscales en términos de las entidades fiscalmente transparentes, en la cual ahora obliga a las entidades transparentes extranjeras y las figuras legales extranjeras ser gravadas como personas morales y pagar el ISR.

Conclusiones

Los inversionistas de este tipo de bienes no suelen tener un ingreso o una preocupación sino hasta el momento de una enajenación, cuando se considera que podrían reducir el impacto del posible impuesto sobre la herencia. Por medio de una disposición transitoria, la tributación de dichas entidades se hará hasta el 1.º de enero de 2021 y la reforma fiscal que atañe al tratamiento de las entidades transparentes puede modificar el propósito para el que dichas estructuras fueron creadas, por lo que es importante ver y asesorarse de posibles cambios en la propiedad.

36 VERITAS FEBRERO 2020

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I n s i d e P u b l i c A c c o unt ing i n t e r v i e w w i t h S t e v e H e a t h c o t e , P r i m e G l o b a l C EO

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I n s i d e P u b l i c A c c o unt ing i n t e r v i e w w i t h S t e v e H e a t h c o t e , P r i m e G l o b a l C EO

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Ne w P r i m e G l o b a l m e m b e r a n n o unc e m e n t s

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A c c o u n t i n g To da y re p o r t s P r i m e G l o b a l e x p a n s i o n a n d i n t e r v i e w s n e w C EO

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A c c o u n t i n g To da y re p o r t s P r i m e G l o b a l e x p a n s i o n a n d i n t e r v i e w s n e w C EO

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A c c o u n t i n g To da y re p o r t s P r i m e G l o b a l e x p a n s i o n a n d i n t e r v i e w s n e w C EO

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A c c o u n t i n g To da y re p o r t s P r i m e G l o b a l e x p a n s i o n a n d i n t e r v i e w s n e w C EO

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I n t e r n a t i o n a l A c c o u n t i n g B u l l e t i n i n t e r v i e w s P r i m e G l o b al â€™s n ew C E O S t e p h e n He a t h c o t e a n d i t â€™s G l o b a l e x p a n s i o n a m bi ti o ns

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I n t e r n a t i o n a l A c c o u n t i n g B u l l e t i n re p o r t s f ro m t h e P r i m e G l o b a l NA P a r t n e r L e a d e r s h i p C o n f e re n c e

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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P r i m e g l o b a l m e nt ions o n s o c ia l m e d ia

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Ne w P r i m e G l o b a l m e m b e r a n n o unc e m e n t s

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