IAB (International Accounting Bulletin) journalist Zoya Malik interviewed Mr. Huang Jinhui, chairman of the board of Reanda International on the successful model and experience of Reanda International. In the interview, Mr. Huang Jinhui introduced the internationalization experience and future development strategy of Reanda International. The interview was featured in the February 2020 issue of the publication.
IAB（International Accounting Bulletin）记者Zoya Malik就利安达国际的成功模式和经验，向利安达国际董事局主席黄锦辉先生进行了采访，采访中请黄锦辉先生介绍了利安达国际的国际化经验以及未来的发展方向。此篇采访被撰写成专栏刊登在IAB杂志的2020年2月刊上。
Zoya Malik: Reanda International celebrates its 10th anniversary this year. Can you tell us about the network’s growth over this time, and the significant macroeconomic influences?
Huang Jinhui: Reanda International, a China-branded international accounting network,was initiated by Reanda Certified Public Accountants (Reanda China) in Beijing in 2009. Back then, Reanda International had two member firms from Mainland China and Hong Kong only. As of 2019, Reanda International has 41 members across five regions: EMEA, America, Asia and Oceania, South East Asia and South Asia. There are more than 147 offices and 4,500 staffs worldwide to provide professional services to clients. In 2019, Reanda International recorded an aggregated fee income of $233.2m.
Over the past decade, it has blazed a unique new path to achieve internationalization, adopting the top-tier networks'business models while maintaining our home-grown expertise, when creating our own international brand. The network has made it to the international accounting arena in providing quality, efficient and professional cross-border professional services to global clients, and we have been working meticulously towards becoming a trusted business service partner.
ZM : How much tech investment has been made to strengthen the network ’s capacities toattract member firms?
HJ: In 2018, Reanda International applied for Forum of Firms (FoF) and became anaffiliate effective 1 January 2019.
The network is now actively promoting the global monitoring review programme, and is devoted to adopting international standards on global audit engagements, as well as meeting other requirements on members' compliance in terms of following international standards of quality,and the code of ethics for professional accountants.
In order to meet the requirements to become a full member of FoF, Reanda International has also updated its Technical Manual in e-version, and promoted its application with overseas members. We are also endeavoring to grow a database of clients from member firms, and to work with large software developers to develop work management software in order to strengthen internal communication between member firms by the exchange of files, video or voice messages.
The network has already invested more than$ 1m in the above projects and will continue to invest further.
ZM:Where do you see regional growth markets for clients?
HJ:There are many uncertainties from global geopolitics, and entrepreneurs will be tracking related policy changes in order to identify business opportunities. We see that clients will be seeking growth in the following countries or regions:
China's neighbours：There will be many business opportunities in countries along the Belt and Road route, due to China’s sustainable development initiative.
India: The Indian government has lowered corporate tax and the tax rate from 30% to 22% in order to boost economic growth by stimulating private investment. It is believed that the above policy will attract more companies to invest in India.
Macau: According to Chinese government policy, Macau will act as a commercial and trade cooperation service platform,and a bridge between corporates in China and Portuguese-speaking countries.
Great Bay Area: Take Guangdong Province as an example: its GDP reached more than $1.52tm in 2019. Compared with 2018 GDP data from the World Bank, Guangdong Province, will rank 13 in the world'slargest economies.
Guangdong Province’s 2019 GDP surpassed that of Australia, which ranked 13th with a GDP of $1.43trn, only slightly below South Korea, which had a GDP of $l.62tm. It shows that there is a huge potential in the development of the Greater Bay Area.
ZM: What are the challenges in expanding into Europe versus South East Asia and South Asia, and which specialist practice growth areas will receive the greatest investment by Reanda?
HJ:Firstly, the standards of CPA firms in Europe are more in line with international accounting standards and are relatively mature in their adoption, whereas firms in South East Asia and South Asia are at a different pace, as every country and local firm meets different quality-control requirements.
Therefore, we are paying greater attention to this and are finding it easier to identify European fims that are running along professional standards and that share a similar philosophy and approach to Reanda International.
Secondly, English is one of the most commonly used languages in Europe; however, in South East Asia and South Asia,where English is not widely used, language can be a barrier. In 2019, Reanda International’s growth in Europe and Asia was 12% and 2% respectively.
We believe that Reanda International has to develop and invest more resources in fields such as M&A, BEPS, transfer pricing and taxation. Additionally, according to Reanda lnternational's development plan for the next 10 years, the network will further echo the Belt and Road initiative. Its Belt and Road Finance,Tax and Law Supporting Centre will cooperate with our members along the Belt and Road route to assist Chinese enterprises that are ‘going global' on their regulatory and compliance issues, with our extensive knowledge of local accounting and taxation laws and regulations.
ZM: How are you working with accounting industry regulators in China and across jurisdictions in raising industry standards for better audit assurance?
HJ : The new Technical Manual version offers a global professional standard for memberfirms to meet quality levels set out by their respective local regulators. Our members pay regular visits to their local regulators in order to exchange nsights and keep them informed about the capabilities of their firm and Reanda International as a whole.
Our Reanda China member firm reports regularly to the Chinese Institute of Certified Public Accountants and the China Securities Regulatory Commission, and maintains excellent communications and relationships with the local regulators.
ZM: How is Reanda differentiating from the Big Four on the geographies andjurisdictions where they operate? What can your network offer?
HJ:Reanda International is based on an unique Chinese culture, whilst as a network wehave adopted the business model of a first-tier international accounting network.
Over the past 10 years, Reanda International, as an independent Chinese brand and an international accounting network from Asia, has exemplified the way that Chinese accountants can go global
and the network has formed its distinctive development strategy.
Being headquartered in Beijing and with membership headquarters in Hong Kong, we are well positioned to offer professional cross-border services.As Reanda China was established by the Ministry of Foreign Trade and Economic Cooperationin 1993, we maintain very good connections, with Chinese embassies and official associations abroad, whilst holding a strong knowledge of China.
During this time, Reanda China has serviced many prominent clients, including large and supper-large state-owned enterprises, listed companies, foreign companies, foreign-invested enterprises and large private enterprises. To name a few, Reanda China acted as reporting accountant for Metallurgical Corporation of China, Sinochem Group and China State Construction Engineering. Our China founder firm has a vast network of client resources, both nationally and internationally.
To serve Chinese enterprises abroad, Reanda International has kept two main focuses: to improve client development and service quality and to establish effective and positive communication with local Chinese Embassies and Chinese enterprise associations.
Reanda International has also facilitated the set-up of regional administrative offices, and encouraged overseas members to set up China desks in their offices.
We believe it is indeed an effective initiative to minimize the cultural barriers between overseas members and Chinese enterprises. The initiative also enables our overseas member firms to leverage on their local resources, connections and extensive knowledge of local rules and regulations, and to provide smart solutions for Chinese enterprises in respect of their difficulties, encountered in relation to accounting, tax and legal aspects when conducting business in overseas.
When recruiting new firms, we see that the quality of the firm's services and competitive pricing are very important criteria for clients choosing a service provider and network. We strive to promote Reanda International to clients as an option besides the Big Four.
ZM: How has the outbreak of the Coronavirus impacted company trading, travel and services to clients?
HJ：The coronavirus occurred during the Chinese New Year in China, and the Chinese overnment extended the public holiday by three days, until Sunday 2 February,to keep the public at home.
The staff at our China member firm in Mainland China - aside from offices in Hubei City, the epicentre of the outbreak,where staff will work from home as a temporary measure- have returned to the office..
For the time being, there is no actual effect on Reanda China operations at the office so far. In accordance with Reanda China policy, after returning to work, staff are advised to minimize face-to-face client meetings and to use alternative channels such as via telephone, video conference and electronic media, for example Whatsapp and Wechat.
Staff at Reanda Hong Kong returned to work on 30 January, and will not travel to Mainland China for work until further notice. Depending on the situation,we are likely to postpone business trips abroad.
Reanda Hong Kong has also put a variety of other measures in place, with employees that have travelled to the mainland over the past two weeks being instructed to stay at home for 14 days.