5
7
57
feAture
“IT IS veRy DIFFICuLT
got a judgmental aspect. It is the
TO FIND exPeRIeNCeD
judgmental aspect that makes the
AND TRAINeD PeRSONNeL
difference. A difference in view doesn’t
IN MACAu, IN PARTICuLAR
necessarily mean there is an error. Of
TO geT SOMeONe whO ReALL y
course, you will receive objections
hAS A gOOD uNDeRSTANDINg
from clients saying: “Wow, the previous
OF The IFRS”
auditor didn’t raise that question.”
you have to be able to explain all the
business owners want to hire quality rationale behind the audit and why you
services. Gradually, we are seeing a are making this judgment call.
diminishing trend in outsourcing.
how do you see Ernst & Young’s
w ere audit firms’ reputations operations in Macau?
damaged by the financial crisis? We see Macau as one of the strategic
Cashing in
the crisis began in America and i locations in Greater China. With Although Macau lags behind the rest of the
question whether the feeling about the backing of China, Macau has world, the concept of corporate governance
the level of trust in auditors has good potential and room for further
is gaining ground here, providing local
come all the way to the east. there development. We are here, we have
lawyers with a fresh source of business.
is still a high level of reliability in about 30 people based here and we
Corporate governance is already one of
the most burning issues for in-house lawyers
an independent auditor’s report are expanding our service capability.
around the globe - especially in listed
in this part of the world. Banks
companies - who must ensure that the firm
do look at who the auditor is and What are your expectations for the
complies with regulatory requirements.
how trustworthy they are. With the Asian audit market? However, many corporate governance
financial crisis, auditors have stepped the recent developments are quite recommendations made by international
up on their level of work and clients positive and we are seeing obvious
reports envisage a role for external support.
also understand we are extending recovery in demand. Public listings are
this can be made, for instance, through non-
the scope of our work to be able to coming back, for instance.
executive directors and risk committees.
this situation creates opportunities for
provide a higher level of confidence.
private practice lawyers to assist as external
Are environmental audits a trend for
advisers.
Why is the methodology followed by the future?
in fact, corporate governance gives
different audit firms so dissimilar? We have recently introduced a lawyers a key role in guiding corporations to
Accounting and auditing is unlike new group in e&y focusing on do the “right thing.”
it was in the past when the rules environmental-related issues, like
traditionally, legal ethical codes have
were very simple. nowadays, when carbon credit audits. this area is still
permitted lawyers to exercise independent
you look to IFRS and other financial in its early stages but we definitely see
professional judgment, and to render advice
not only about the law, but also to take other
reporting standards, they have also potential in it.
considerations such as moral, economic,
social and political factors into account.
For that, lawyers need to have sufficient
Watching the books
knowledge of the local legal system, as well
as an understanding of how business gets
done in Macau.
Ernst & Young’s Agnes Chan says that auditing financial statements of Macau
in the case of subsidiaries of international
companies can be a bit of a challenge over financial reporting standards.
companies, lawyers need to be able to
Locally firms must follow the Macau Financial Reporting Standards
coordinate local corporate governance
(MFrs), yet, in the case of subsidiaries of multinational companies, their practices using the rules followed by the
parent companies must comply with the international Financial reporting jurisdiction where the parent corporation
standards (iFrs).
is based – usually Hong Kong. Only
“Because MFrs have only partially adopted iFrs, there are
that enables them to make an effective
convergence issues which we need to tackle,” says Chan.
contribution.
When choosing a private practice
But that is not all. “Macau’s Commercial Code has certain rules which,
lawyer to advise on corporate governance,
in practice, may not be totally followed by local companies”, she says.
a company looks for a mix of technical
One example is how dividends are distributed and recorded.
knowledge and experience in Macau.
in the case of casino concessionaires, they don’t pose any special Good relationships with regulatory bodies
audit problem, insists Chan. Although Macau has built up an international are also a plus, especially in Macau where
reputation for being a more “relaxed” jurisdiction than Las Vegas and, now,
investors regularly complain about too much
singapore, the auditing of local gaming companies “is not really that much
bureaucracy and red tape.
easier,” she adds.
Corporate governance as a source of
business for local lawyers will probably
“you have rules to follow. i don’t know if it is a misconception that
increase in the coming years, following the
Macau’s gaming industry is less regulated – in fact, it’s pretty regulated.”
gradual exposure of the local economy to
international best practices.
March 2010
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