global
ISSUE 9MOUNTING
EXCITEMENTALL EYES ON TOKYOFOR 2020 GAMESMAKING A DRAMA OF IT

NEW RIVALS JOIN GLOBAL STREAMING ARENABLOWING HOT AND COLDMIXED PROGRESS ON RENEWABLES

WHERE THE SMART MONEY IS
TAXING TIMES FOR WEALTHY CLIENTSThe networkfor doingbusiness

2 UHY GLOBAL January 2020

WORD OF WELCOME

IN THIS ISSUE

3PRIDE ANDPERFORMANCE
Racing towards
Tokyo 2020

4

ENTERTAINING
THE WORLDThe battle tocontrol global
entertainment

8

RENEWABLE
ENERGYPowering up for
global demand

11

CLIENT STORY
Whirlwind successof Viatec

12

PERSONALPROFILE
Meet Venancia
Wijono14

PERSPECTIVES
The complex needsof private clients

17

WORD OFWELCOME18

It is a great pleasure for me tointroduce issue nine of UHY
Global, our twice-yearly magazine
for businesses with a global
outlook. I welcome you as the newchairman of UHY’s international
network, a responsibility I was
delighted to accept just a few
months ago. I certainly relishthe opportunity of meeting thechallenges and expectations ofa successful, growing network
and I look forward to continuing
our exciting journey in this timeof unprecedented change.

GLOBAL NEWS
Roundup fromaround the world2020 VISION
What’s in store
for the year ahead

21

COGS & WHEELS
Challenges ofTransfer Pricing
regulation

22

CLIENT STORYThe Elton John
AIDS Foundation

23

SERVING CLIENTS,SERVINGCOMMUNITIESGlobal stories fromour remarkablepeopleI am reminded of how a young
Bob Dylan explained that The
Times, They Are A-Changin’ backin 1964, and of how his words
resonate as much today as they
did then. Embracing change
and understanding how this isa good and necessary thing, isa recurring theme throughout
this edition of UHY Global.
For example, in our feature 2020
Vision: Accounting for Change,
we take a look at what lies on ourown professional doorstep in theyear ahead, and how accountancy
must meet progress head-on, inorder to survive and thrive. Rapid
technology advance is a massive
agent of change for the profession,
but brings significant benefits toour clients. Implementing new,tougher international standards inaudit and tax will occupy all of us in
2020; and the shifting generationalbalance in accountancy’s
professional workforce
points to a transformativeand exhilarating future.
If there is one word that defines
the uncertain nature of commerce
it is probably disruption (just ask
Kodak). In responsive sectors,
one consequence is the rapid

redevelopment of alternative
business models, and we explore
this in the context of content
streaming in the media sector, in
our feature Entertaining the World.
Another shift in the balance ofpower is the growth of renewables.
Yet while the overall direction
is forwards, energy is still verymuch a two-speed industry,
as we find out in Renewable
Energy at the Crossroads. Many
UHY member firms work withrenewables clients, from wind andsolar construction and logistics
to biomass production, and I am
delighted to bring one of theseclient stories to this issue of ourmagazine. Wind Revolution
details how UHY member firms
are working together to help
a Polish turbine manufacturer
to expand across Europe.
Elsewhere in UHY Global, we
look at the upcoming Summer
Olympics and Paralympics inTokyo, the challenges of transfer
pricing for multinationals andthe changing expectations ofwealth and estate management
for private clients. We also takethe opportunity to celebratesome of our own remarkablepeople across the network.
I hope you enjoy this issue of
UHY Global – and if you would
like to read more on the topics wehave featured, or about our UHY
member firm contributors, thenwhy not browse our expanded
digital edition, at uhy.com/
publications. Meanwhile, please
let me wish you a very prosperous
2020 and much success.
Dennis Petri
Chairman, UHY International

ALL AROUND THE WORLDUHY GLOBAL January 2020 3

PRIDE ANDPERFORMANCEI

n a few short months, 15,000
top athletes will gather in Tokyo
for the 2020 Summer Olympics
and Paralympics. The world’s
biggest logistical and commercial
engine is already revving up.
A VIEW FROM THE CITY
The statistics come hard and fast, like asprinter ducking into the finishing tape.
Tokyo 2020 will feature competition in
55 sports, with over 15,000 top athletescompeting in nearly 900 Olympic andParalympic events. Around 5,000 medals
will be awarded over the two Games,
and in a new twist medals have been
forged from the recycled remains ofover six million mobile phones.
But the greatest Olympic test of all
still awaits the organisers, even aftervenues and athletes’ villages arecomplete. Their Herculean task? To guidethousands of athletes and millions ofspectators, support staff, media andassorted personalities through hundredsof events in scores of venues. To makeit all run on time and on budget.
It is a mammoth undertaking with aprice tag to match. A figure of USD
28 billion for total expenditure isconsidered a reasonable estimate.
There will be indirect costs, too. Many
Tokyo-based businesses will encourage staff
to work from home where possible during
the Games, to free up space on Tokyo’s
notoriously crowded public transportsystem. Then there is clean-up, security,environmental impact, to name just a few.
So will it be worth it? The cost of staging
the Games has rocketed in recent years.
In 2018, the New York-based Council
on Foreign Relations (CFR) claimed

that Rio de Janeiro, the 2016 host city,
was still struggling with debts incurredfrom its brief summer in the Olympic
spotlight. The debts accumulated
by Greece for the Athens Games in2004 helped bankrupt the country.
But Morito Saito, director, UHY FASLtd, Tokyo, Japan, believes 2020 will
be different. “I personally believethat real longterm benefits from the2020 Tokyo Olympics and Paralympics
can be expected,” Morito says. “Thereason being that the main sponsor is
the Tokyo Metropolitan Government.
And it has deep pockets.”Tokyo is a wealthy city with a highly
developed infrastructure. When Beijing
hosted the Games in 2008, more thanhalf of the record USD 45 billion budget
went on non-sports infrastructure.
Tokyo will not need to spend anywhere
near as much. Morito notes that Tokyo
has a total municipal budget thatexceeds that of New York City andeven the national budget of Sweden.
If Tokyo is unlikely to be plunged into
debt, it also expects long-term benefits
in terms of jobs and tourism. The Tokyo
Metropolitan Government predicts thecreation of 306,000 jobs as a direct
result of the Games, and many moreindirectly. The Japan Tourism Agency
has set a target of 40 million visitors in
2020, up from 31 million in 2018.
Morito believes these benefits will last wellinto the future. “The number of tourists
is increasing every year, and more foreign
tourists can be expected by introducing
Japanese culture at the Olympics,” he adds.
Tokyo may be an Olympic winner, after all.

A VIEW FROM THE TEAMAs Tokyo gears up for the Games,
so do the teams who will go
for glory in the summer.
They have been preparing for years,
and not just on the track and in thepool. It costs huge sums to send ateam of athletes to an international
event and in the case of the British
Paralympic Association (BPA), commercial
partners provide significant funds toensure the team is fully supported.
Subarna Banerjee is head of UK
member firm UHY Hacker Young’s
national charity and not-for-profit
group, and the BPA is his client.
“The BPA is reliant on privateorganisations,” says Subarna. “Ahuge part of its work is engaging withsponsors and potential sponsors.”
For that, like all non-profits, it has
to show that funds are properly
and productively used. Subarnaand his team ensure that the BPA iscompliant, transparent and in financial
terms an attractive proposition forpotential corporate supporters.
For everyone concerned, Tokyo
2020 is a labour of love, requiring
dedication, determination and large
sums of money. But as the excitementbuilds, scepticism falls away. Tokyo
promises to be a glorious summer. n
For more information about UHY’s
capabilities, email the executive office,info@uhy.com, or visit www.uhy.com

4 UHY GLOBAL January 2020

ENTERTAINING
THE WORLDA GLOBAL THIRST FOR CONTENT IS CREATING
UNPRECEDENTED OPPORTUNITIES IN THE
MEDIA AND ENTERTAINMENT SECTOR – BUT
NEW ENTRANTS NEED PROFESSIONAL BUSINESSSUPPORT TO REMAIN FINANCIALLY VIABLE

FEATURE – ENTERTAINING THE WORLDUHY GLOBAL January 2020 5

W

hen the Apple TV+ content streaming service launchedin November 2019, it entered a crowded market. Netflix
currently has over 151 million global subscribers. Amazon
Prime, which bundles a TV, movie and music streaming service
with two-day delivery on products from its retail marketplace,hit 100 million subscribers in the US alone in early 2019.
Other major players are coming on
stream. Disney’s own service, Disney+,
debuted a few weeks after Apple TV+.
NBCUniversal and WarnerMedia will bothlaunch streaming services early in 2020.
The proliferation of streaming services
is a global phenomenon. iQiyi is often
called the Netflix of China, though it has
ambitions to be far more. “We want to bea one-stop entertainment platform,” saidiQiyi’s chief content officer Wang Xiaohuirecently. “We want to match users withmore entertainment options, so they
don’t have to leave our platform when
they want to read books or play games.”
MORE THAN MOVIESAs those words suggest, digitisation is
not just disrupting the movie and TV
business. Spotify and its challengers
are changing the way we consume
music, while traditional paper-and-ink
newspapers are beginning to look likequaint throwbacks to a sepia-tinged
age compared to their fast-moving,
online multimedia counterparts. Few
industries – perhaps retail is one –have undergone such a thoroughtransformation since the dawn of theinternet age as media and entertainment.
“Streaming platforms have definitelychanged the shape of the media/
entertainment sector and have moved
us into the digital transformation age,”says Patrick Farrelly, principal and media
specialist at UHY Advisors NY, Inc, Albany,
US. “No one wants to listen to or watch
commercials anymore. They want to live
stream music, shows, movies, news…”
The upshot of this is an almost
unquenchable thirst for content. iQiyi
has set aside up to USD 7.3 million
for each of six new feature films – butthat is a relatively small amount whencompared to the USD 6 billion Apple
reportedly spent on original showsand movies ahead of its launch. Netflix
splashed USD 3.74 billion on originalcontent in just the third quarter of 2019.
A GOLDEN AGE FOR PRODUCERS

That sort of money needs to go
somewhere, and these lean digitalorganisations often do not have thein-house content-making infrastructure
to do it all – or even that much ofit – by themselves. Nor do they want
to. MoneyWeek magazine recently
reported that “producers have thrived
on the back of the growth in demandfor content, thanks to an array of
new clients to make shows for.”Patrick agrees: “All this has led to new
players in the media and entertainment
sector, and increased acquisition activity.
Entities with large financial means realise
they cannot engineer everything in-house.
These companies weigh the cost benefitsof producing in-house versus acquiring
these services (from third parties). The
upshot is a huge boost in the number of
new content production companies.”
This is far from just a US trend. Aroundthe world, companies are springing up toservice the new demand for content. “Iwould say that the general trend is thataudiences and therefore advertising budgets
are moving from content created by big TV
channels and newspapers to that createdby start-ups,” says Nikolay Litvinov, directorof audit and consulting at UHY Yans-Audit
LLC in Moscow, Russia. “It now requires alower business entry threshold to open a
media company, which often starts as thebrainchild of an individual entrepreneurwith just five to ten employees.”

Audiences andadvertising budgets
are moving fromcontent createdby big TV channels
and newspapers

to that createdby start-ups.

Andrea D’Amico, partner at UHY Audinet
Srl in Rome, Italy, says that big players
like Netflix and Amazon are dominating
the streaming sector and are formulating
clever business strategies that will secure
their position for the long term. “Thebig players, as well as creating productsof great quality, have also developed
industrial integration strategies such as,
for example, the recent arrival of Netflix
on the Sky TV platform,” he says.
In response, he believes further
opportunities will emerge for nonmainstream channels organisingalong sharing economy lines. The
upshot is a content requirement thatshows no sign of diminishing.

6 UHY GLOBAL January 2020

AWASH WITH OPPORTUNITY
Whether mainstream or otherwise, the
new media and entertainment landscapeis awash with opportunity, and not justto serve local markets. The globalisationof media and entertainment means evensmall producers are granted access to
global audiences in a way that was notpossible when national broadcasters
dominated the TV schedules.
Bernard Fay, co-managing partner at
UHY’s member firm in Spain, UHY Fay& Co, believes language barriers are
crumbling as streaming companies
increasingly push for worldwide
audience share. “There is an explosionof new platforms competing to gain
market share, and Netflix has noticed
the entry of giants such as Amazon,Apple and Disney,” he says. “This hascreated a huge demand for content,
and language does not seem to be abarrier anymore – one example is theextraordinary success of Casa de Papel,
which in English is Money Heist.”
Casa de Papel is a Spanish language
series that has become one of the mostwatched Netflix shows in any language.
When the third series debuted in 2019,
over 34 million people around the world
tuned in, in the course of just one week.

FEATURE – ENTERTAINING THE WORLDUHY Fay & Co has first-hand experienceof the phenomenon of truly globalised
film-making. One of the firm’s clients is
Dreamlight International Productions,a Madrid-based media production
company with an international outlook.
Led by a Spanish media veteran anda renowned author and businessman,
Dreamlight understands that the future
for independent production companies
lies in satisfying international demand
for multilingual, multicultural content.
“Dreamlight is now fully dedicatedto its new project – a historic series inEnglish with a native English speaking
cast – which will soon start shooting
in several countries,” says Bernard.
A GLOBAL OUTLOOKIn Russia, too, says Nikolay Litvinov,“we see Russian media firms creating
popular exclusive content and looking
for opportunities to sell it in othercountries.” In the US, Patrick says media
and entertainment companies are
increasingly looking beyond domestic
audiences and the traditional export
markets of Europe and Australasia,
and towards hundreds of millions ofpotential new content consumers inSouth America, China and Africa.

It is easy to see why. This is a landscapein which the BBC’s famous wildlife
shows, fronted by the ever-popular David
Attenborough, are made with global
rather than British audiences in mind.
It is one where traditional broadcasters
are scrambling to meet the challenge of
nimbler streaming services and webbased competitors, by partnering withthird-party production companies oncontent with cross-border appeal.
SOLID FISCAL FOUNDATIONS

If this sounds like a golden age
for independent content producers,
it is not without pitfalls. New entrants
to the sector might bring a wealthof creativity and content-making
experience, but far less in the wayof financial and business acumen. It iseasy to forget that creative industries,
like any other, live or die on theirability to make money. Professional
services providers can help to provide
the solid fiscal foundations uponwhich great content is built.
“Research shows that a large percentage
of movie projects actually lose money
instead of creating a profit,” says
Andrea D’Amico. “Our goal is to help
profitable films become the rule andno longer the exception. We can assist

UHY GLOBAL January 2020 7

film studios and distributors with theirgreenlighting decisions by providing
assessments of film financing, producing
and releasing. In addition, Italy provides
specific tax relief for movie making.”

Our goal is tohelp profitablefilms become therule and no longer
the exception.

industry regulations, tax complianceand cash flow management.
“That’s where we can help – by helping
companies address such challenges with ahands-on, highly communicative style ofservice delivery. We are there every step of
the way to help grow these businesses.”
In Russia, Nikolay wonders if the sector isunderregulated, and will perhaps become
subject to more government scrutiny overthe coming decade, again necessitating
first-rate business advice. “Other issues
that professional consultants can help
with is protecting exclusive copyrights
and cybersecurity protection,” he adds.
INTERNATIONAL SUPPORTPatrick Farrelly also believes UHY
member firms have a fundamental roleto play in the new media landscape, bygiving creative people the freedom theyneed to make the very best content.
“These dynamic new companies havegrown their businesses from the groundup,” he says. “They understand theirproduct, their customers, and where
the industry is trending. However,they may lack understanding when it
comes to factors like government andAs a global network, working with anincreasingly global sector, UHY is in abetter position than most to offer thekind of support entertainment businesses
need. In Spain, Dreamlight was foundedwith the ambition to quickly become a
global player. “UHY Fay & Co is helping
Dreamlight with the professional services
required, but it is likely that other UHY
members will be needed to support
Dreamlight’s activities in the different
countries where they will shoot theseries, and then in the post-production
sales efforts,” says Bernard Fay.

In the same vein, Nikolay says this crossborder activity “provides possibilities
for professional consultants to help
(content businesses) with international
taxation issues and legal support in theircommunications with foreign colleagues.”
With the internationalisation of media
and entertainment showing no signs ofslowing, it is likely that opportunities forcollaboration between UHY member firms
will also grow. The shift to a globalised
industry appears unstoppable. With a hostof new companies emerging to satisfy
that growing demand for content, thesupport of professional service providers
has never been more important. n
For more information on UHY’s capabilities
in the media and entertainment sector,
email the UHY executive office,info@uhy.com, or visit www.uhy.com

8 UHY GLOBAL January 2020

RENEWABLE
ENERGY AT THE
CROSSROADSWHETHER THE SECTOR IS SPEEDING AHEAD
OR CRAWLING ALONG DEPENDS ON NATIONALCIRCUMSTANCES – BUT OVERALL GLOBALPROGRESS IS REAL AND SUSTAINEDFEATURE – RENEWABLE ENERGY AT THE CROSSROADS

R

enewable energy is nota fad and it is not goingaway. That much is clear fromthe latest annual Renewables
Global Status Report (GSR),
released by the Renewable
Energy Policy Network forthe 21st Century (REN21).
The report reveals that more than one
third of global installed power capacity is
now renewable, and that over a quarterof the global electricity supply comesfrom renewable sources. Upwards of
11 million people around the world are
employed in the renewable energy sector.
While all this sounds like good news forthe environment there is a very long way
to go. Many countries – 169, according
to the REN21 report – have createdrenewable energy targets, but far fewer
have targets for the use of renewables inheating and cooling or transport, which arehuge energy consumers. In fact, 60% of
the total energy used in buildings in 2018
occurred “in jurisdictions that lacked energy
efficiency policies,” the report states.
MOVING IN THE SAME DIRECTION
Nevertheless, the direction of travelappears to be set, even if countries are
moving at different speeds. Environmentalpressure plays a part, along with theactions of groups like Extinction Rebellion.
But countries across the globe are also
waking up to the economic potential ofrenewable energy. One study calculates
that doubling the share of renewablesin the global energy mix by 2030
would increase global GDP by up to
1.1%, or USD 1.3 trillion, while adding
13 million new jobs in the sector.
The carrot of economic growth ismatched by the stick of public pressure,pushing governments into action. Someare forging ahead. In 2018 renewableenergy supplied 37% of Finnish energy
demand – making Finland second in theEuropean Union for renewable energy use.
Harri Laurikka, CEO of the Bioenergy
Association of Finland – a client of Finnish
UHY member firm UHY TietoAkseli –says that Finland has to follow European
legislation on climate change mitigation,
but also must go further, investing inresearch and development in the sector

UHY GLOBAL January 2020 9

and introducing a number of additional
subsidies for renewable energy companies.

to a more environmentally sustainable
and diverse electricity sector.”“Overall, the public has supported
public investment in renewable energy
and companies operating in thatbusiness, as well as domestic energy
taxes for non-renewable fuels,” hesays. “Climate change has become amajor concern for Finnish people, andrenewable energy enhances energy
security and provides jobs – often inregions where they are most needed.”

UHY United already has two clients in the
renewables sector, and expects to attract
more as the Egyptian government works
to fulfil its ambition to increase the supplyof electricity from renewable sources
to 20% by 2022 and 42% by 2035.

Harri adds that renewables also havebroad parliamentary support and thatthe accelerating decline of fossil fuel use
is widely accepted. “It is acknowledgedthat the role of fossil fuels will significantly
decrease in the coming decades,” he says.
A GLOBAL MOVEMENT
In countries around the world,
governments are encouraging renewableenergy generation, to a greater or lesser
extent. In Egypt, Ahmed Hegazy, tax
lead partner at UHY United in Cairo,
says the government has encouraged
investment in wind power by offeringhigh prices for the generated power.
“The price for the electricity generated
from solar power is also very competitive,
which has attracted many investors
and encouraged international
institutions to finance its development– and that has also created many
new job opportunities,” he adds.

The price forelectricity fromsolar power is very
competitive, which
has attracted

many investors.

“The government is aware of the needfor a sustainable energy mix to bothaddress increasing demand, and to move

INCENTIVES AND INVESTMENT
Egypt’s targets may look modest by
Finnish standards, but like many countries
in the developing world – it relies ona mix of government incentives andprivate and foreign investment to drive
renewable energy development.
To the south, Uganda still suffers fromoccasional but prolonged power outages,
and most of its heavily rural population
relies on the burning of biomass (likewood) for energy. Reliable electricity fromany source is the most pressing issue
for the majority of Ugandans, with only
22% of the population enjoying accessto electricity in 2018. Most of that iscurrently generated from hydropower.
How will Uganda meet the increasing
electricity demands of businesses andcitizens? Dipak Lakhani, accounts and tax
director at UHY Thakkar & Associates,
Kampala, Uganda, points to a number ofgovernment incentives that are helping
to kickstart a nascent renewables sector,
in the hope that it may go some way tomeeting the electricity needs of currently
underserved Ugandans. Uganda isrichly endowed with renewable energy
sources and, says Dipak, solar andhydropower are particularly important.
“The government gives tax holidays andrebates for renewable energy projects,
and has also formed the Uganda Energy
Credit Capitalisation Company (UECCC),”he says. “It is responsible for coordinating
funding from the Ugandan government,international development partners and theprivate sector, to invest in the renewableenergy infrastructure in Uganda.”
In countries where there
are more pressing social,economic or politicalconcerns, progress
towards renewable goals
is predictably circumspect.

10 UHY GLOBAL January 2020

But as the Ugandan example shows,progress is happening almost everywhere
to some degree. Developing countries
are recognising that renewableenergy must play a significant role inany future energy mix, even where
electricity is an unreliable resource.
WHERE COAL IS STILL KING
Electricity is not an unreliable resource
in Australia. Indeed, the Australian
government recently celebrated reachingits 2020 renewable energy target early,
with 23.5% of electricity generation met
by renewables in September 2019.
While that sounds impressive, it is a relatively
modest target and figures show thatinvestment in renewable energy in Australia
is actually falling. Michael Coughtrey,
managing partner at UHY Haines Norton in
Sydney, says that although the government
encourages the renewables sector withsubsidies and infrastructure funding,Australia remains dependent on coal.
“Coal produces about 65% of ourelectricity,” says Michael. “We needcoal and there is a vigorous debate here
about developing new coal-fired plants,
as some are about to close down.”
Progress on renewables is often slower incountries with large and powerful fossil
fuel interests. Finland has been able toforge ahead, as Harri Laurikka accepts,
partly because it does not produce its
own fossil energy: the coal, oil andgas it uses are imported. In Australia
and elsewhere, politicians must weighenvironmental concerns against the jobs
and investment that major internationalcoal, oil and gas companies create, andtheir significant lobbying power.
RENEWABLES ON THE BACKBURNER
The pressure these giant conglomerates
can bring to bear is seriously slowing
the development of renewable energy
sectors in some countries. At UHY ECA
in Poznań, Poland, partner Piotr Wozniak

FEATURE – RENEWABLE ENERGY AT THE CROSSROADS

says the Polish government has shownno will to embrace renewables, and thatany progress that has been made is theresult of legislation imposed by the EU. In
Poland, coal is king, providing 80% of thecountry’s electricity needs and supporting
thousands of jobs. The government’s
energy policy is focused accordingly.
“The result of such policy has beencatastrophic for ecology,” says Piotr.
“Among others, the development ofonshore wind energy was stopped, solar
farms were neglected and investments inrenewable offshore energy sources (whichin the Polish climate would be an idealenergy solution) were not even started.
The important role of coal in the Polisheconomy is continually emphasised.”

In Poland, coalprovides 80% of thecountry’s electricity
needs and supports
thousands of jobs.

UHY ECA has a client, Viatec, that
constructs and maintains turbines foronshore wind farms. Significantly, Viatec
quickly realised that the domestic Polishmarket alone would not be enough to meet
its ambitious targets, and has employed
UHY’s international network to swiftly build
a presence in other European countries.
Poland does offer encouragement for
renewable energy businesses, throughloans to entrepreneurs and programmes
to promote small-scale solar energy
generation, for example. Anotherimportant initiative is the ‘Polish Energy
Policy until 2040’ project, which aims

to support the development of cheap
offshore wind energy, thereby increasing
the country’s energy security andreducing the need for energy imports.
But these initiatives are piecemeal at best.
“As confirmed by the recently released
National Plan for Energy and Climate
sent by the Polish Ministry of Energy
to Brussels, our country will not beable to meet the minimum 15% goalof renewable energy sources in totalenergy consumption,” says Piotr.
A GROWING OPPORTUNITY
Finland and Poland are both European
nations and members of the EU, but on
renewable energy at least the countries
seem worlds apart. Their contrasting
situations exemplify the two-speed
nature of renewable energy adoption.
Most governments are doing something,but the extent of their support is heavily
dependent on local circumstances.
However, while the speed of travel differs,
the destination is set. UHY member firms
are seeing a clear upswing in renewableenergy clients. The plethora of subsidies,tax incentives and loans that support
the sector, and the scrutiny it attracts
from pressure groups and public bodies,mean that professional service providers
have a key role to play in the continuing
growth of renewable energy generation.
As Harri Kanerva, partner at UHY
TietoAkseli in Finland explains, being
able to outsource to UHY intricate tasks
like compliance and reporting, is vitalfor renewable energy clients as they
establish a presence in the sector: “Wehave a number of renewable energy
clients, and they get to concentrate on
their own field of expertise. That saves
them a lot of time and money.” n

For more information about
UHY’s capabilities in the energy
sector, email the executive office,info@uhy.com, or visit www.uhy.com

CLIENT STORYUHY GLOBAL January 2020 11

WIND
REVOLUTION

UHY MEMBER FIRMS ACROSS EUROPE HAVEHELPED A POLISH WIND TURBINE COMPANY
ACHIEVE AMBITIOUS INTERNATIONALGROWTH THAT IS SET TO CONTINUE

UHY is a trusted
partner for

high-growthcompanies.

V

iatec is flourishing in the wake of Europe’s booming demand for sustainableenergy. Based in Poznań, Poland, with operations in seven European
nations, the company constructs and maintains wind turbines for onshore
wind farms, offering a turnkey service that includes the onsite installationand servicing of tower sections, generators, blades and cabling works.

ENERGY EXPANSION
The need to generate energy from wind
has created a vibrant industry acrossmuch of Europe, enabled by friendly
EU and local regulations. Countries
such as Germany, Denmark and the UK
have forged ahead in designing andbuilding of offshore and onshore windfarms, but until recently Poland lagged
behind due a lack of necessary skills andinfrastructure. Viatec was founded witha goal to lead wind energy generation
efforts in Poland, but quickly realised thatthe domestic market alone would not beenough to meet its ambitious targets.
Viatec financial director Olga Kazmierska
says, “The strategy of Viatec wasto build competence and presence
in foreign markets. And that meant
there was a natural requirement fora professional accountancy firm witha wide EU network, alongside tax
advisory competencies and a thoroughunderstanding of high-growth SMEs.”
Viatec partnered with UHY’s Polishmember firm, UHY ECA, represented bypartner Piotr Wozniak and his team. UHY
ECA’s expertise and experience of helping
other high-growth SMEs, combined with
its central position in a highly connected
network, has proven invaluable – andViatec has been able to fulfil its ambition
to quickly forge a presence in burgeoning
wind turbine markets across Europe.

“We know Piotr and UHY ECA have agood reputation for tailoring services
for SMEs, as well as offering a rangeof services,” says Olga. “We havebeen recommended by UHY ECA toa number of UHY member firms. We
can always count on a full exchange of
information and detailed discussions
between UHY ECA and local UHY
member firms in each location to arriveat the final solution for Viatec.”
CROSS-BORDER EXPERTISE
Viatec’s partnership with UHY, alongside
its own expertise and determination,
has seen business operations spreadquickly across the continent. Assisted
by several other UHY member
firms – UHY BusinessCollegia LLC,
Belarus; UHY TietoAkseli, Finland;
UHY GVA, France; UHY LLC, Georgia;
Govers Accountants/Consultants, theNetherlands; Revisorgruppen AS, Norway;
UHY Fay & Co, Spain; and Winthers
Revisionsbyrå AB, Sweden – the company
has proved, without question, that amarket for its products and services
existed beyond Polish borders.
“We know there will always be athorough knowledge regarding
accounting, audit, tax and businessadvisory, alongside a thoroughunderstanding of the nature of
SMEs and the flavour of a high-growth company. Importantly, there
is also the ability to see and consider
issues in perspective,” says Olga.
“UHY has helped us achieve compliance– with regard to both customer
requirements and local regulations –and has aided our ability to grow thebusiness overseas. I would describe
UHY as a trusted partner for highgrowth companies like us.”Viatec’s pioneering attitude tointernational expansion is unlikely to end
there. The company has had preliminary
communications with other UHY member
firms including UHY Audit CD S.r.l.,
Romania and UHY UZMAN Sworn in
CPA and Independent Auditing Inc.,
Turkey, and is considering a move beyond
Europe’s borders. UHY member firms
remain on hand to help its integration
into local markets around the world.
“We rely on the quality and accuracy ofthe services UHY member firms provide
when considering approaching newmarkets with our services,” says Olga.
“We are encouraged to see the ongoingdevelopment of the UHY global network –the recent addition of an Iranian member
firm, Hadi Hesab Tehran, for example – as
we look forward to further expansion.” n

For further information, please contact
Piotr Wozniak, partner, UHY ECA, Poznań,Poland: piotr.wozniak@uhy-pl.com

12 UHY GLOBAL January 2020

A WOMANWITH
HEART ANDAMBITION
A

ccounting has come a long way in Indonesia
over the last 30 years. Venancia Wijono has
been on every step of the journey but has neverlost sight of what matters most – people.
Venancia with her
granddaughter

When Venancia Wijono, partner, KAP Hananta
Budianto & Rekan, Indonesia, was deciding
which career to choose after graduating fromhigh school, she could not decide whether toembark on a degree in dentistry or economics.
At that time it was possible to register for
two different subjects so she opted for both
until she was accepted on to the faculty of
economics and chose to major in accounting.
“As a child I had thought I would becomea dentist because I was very good withmy hands but looking back, I am glad I
became an accountant. It is a profession I
love, and I have met so many inspirational
people through my work,” says Venancia.
When she first qualified in the 1980s, Venancia
remembers that accountants were still rare in
Malaysia. “We had to work hard every day toearn people’s trust in our profession. It waslargely unregulated at the time, but we havecome so far in the last 30 years, and now our
reputation is secure and we move from one
success to another. My motto has always beenthat every challenge is an opportunity and I
have embraced that throughout my career.”

Venancia (centre) with her running club friends

As an accountant who also has a backgroundas a lecturer in accounting management andauditing, Venancia has always maintained a
special interest in working with charities andaid bodies. One of her proudest achievements
is that she created a consulting team thatoffers accountancy training and advice
exclusively to not-for-profit organisations.

PERSONAL PROFILE“In this field donors have to be absolutely
sure they can trust any organisation
they are supporting so it is critical that
we look after them and show them at
every level that we can be relied on andthat all beneficiaries are worthwhile.
“We set up a separate entity for
non-governmental organisations –through which we provide training andworkshops to help them to improve theirgovernance. Nowadays, several donors
have appointed us to give training
to the local partners they support.
“I get a thrill from knowing that ourexpertise contributes to the ongoing
success and viability of many donorfunded projects, including Bread for theWorld and Cordaid,” says Venancia.
Recognising that happy and satisfied
clients and colleagues are her member
firm’s most effective marketing tool,
Venancia invests a lot of time in building
strong, enduring relationships withthe people she works with and thebusinesses and organisations she advises.
“Contented employees and well-serviced
clients are our best referral systembecause they go on to recommend us toothers and the power of word of mouth
cannot be overestimated,” says Venancia.
“I always stick to my motto that every
challenge is also an opportunity andI think that has served me well whentackling any more difficult situations.”

Contented employees
and well-serviced

clients are our bestreferral system.

The appeal of accountancy is obviously
in the family’s blood. Not only are
Venancia and her husband accountants
but all three of their children now also
work in the fields of accountancy andfinance. Her two daughters both majoredin finance and accountancy and now
run their own related businesses and

UHY GLOBAL January 2020 13

her son, Revano Hananta, a charteredaccountant, spent three years working
at UHY Haines Norton, Sydney,
Australia, before returning home tohelp to develop UHY in Indonesia.
“I am very proud of all our children,”says Venancia, “and now I have awonderful granddaughter too who
is very cute and very smart and has
just started talking, which makes melaugh a lot. I wonder if she too willgrow up to be an accountant!”
Although Venancia loves her work
she also recognises the importance ofrelaxing with friends and family. Walking,jogging, travelling and a variety of sports
are essential parts of her life too.
“I consider myself fortunate to havesuch a close, loving family and to bepart of the UHY network too. Having
member firms across the world to refer
work to and to receive referrals fromis hugely beneficial and the regional
and annual meetings every year arealways very positive experiences forall of us. There is nothing better
than interacting with people from somany different countries to share ourexperiences and learn from each other.

“Here in Indonesia things are looking
very buoyant too. Our new government
is working hard to introduce new
initiatives and technological advances– all of which should really boost our
economy and improve our beautiful
country’s prospects to flourish.” n

To find out more about KAP
Hananta Budianto & Rekan,
visit www.hananta.com

There is nothing better
than interacting withpeople from so manydifferent countries
to share ourexperiences and learn
from each other.

Venancia with her family

14 UHY GLOBAL January 2020

MAKING WEALTHWORK HARDER
AROUND THE WORLD, UHY MEMBER FIRMSSERVICE THE INCREASINGLY COMPLEX NEEDSOF PRIVATE CLIENTS AND THEIR FAMILIESF

or those looking for insight
into the current needs andpriorities of high net worth
individuals, the most recent
Knight Frank Global WealthReport provides interestingreading. According to thecompany’s research, wealthy
individuals are more mobile
than ever, with a record
number (26%) planningemigration in 2019.

At the same time, the report notes
an increasing anxiety on the part ofgovernments around the world withregard to tax evasion and avoidance(often mistakenly conflated withlegitimate wealth management), and thetightening of rules in some jurisdictions
in relation to foreign nationals andproperty investment. All in all, the reportsuggests that while high net worth
individuals are, increasingly, citizens of

the world, lawmakers are scrutinising
their financial activity in ever finer detail.

on how best to approach tax, wealthprotection and estate management.

Staying compliant while legitimately
protecting wealth can be fraught withcomplexity for private clients. Tax efficiency,
cross-border compliance, personal andfamily finance, succession planning andwealth protection are all of concern.
Coupled with this, the individuals
involved may not necessarily be very
wealthy, but simply people who wantto protect the money they have earned
and make it work harder on their behalf.
We asked a panel of UHY experts fromour member firms in Costa Rica, the Isleof Man, the UK and the US about theirapproach to supporting private clients.

“Individuals and families often create
trusts for wealth and estate protection,
as well as for confidentiality reasons.
Trusts are a good way to pass on thefamily business, protect assets fromcreditors, and pass on wealth in a
careful, considered way,” says Nigel.

TRUST AND CONCERN
Nigel Rotheroe, director at UHY
Crossleys LLC, Isle of Man, believes thatthe increased complexity of tax andcompliance laws, in the UK and abroad,is behind an increase in the number ofprivate clients seeking professional advice

The recent establishment of UHY Trust& Corporate Services Limited, a joint
initiative between UHY Crossleys and
UHY Farrelly Dawe White Limited,
Ireland, designed to aid the formation
and administration of companies,
trusts, foundations and partnerships in
Ireland and the Isle of Man, is helping
to support this, Nigel explains.
In the US, Joe Falanga, managing
director, UHY Advisors NY, Inc, agrees
that while private clients approach him
for a variety of services – personal tax
strategy management, life management
services (such as asset management),PERSPECTIVESUHY GLOBAL January 2020 15

and philanthropic planning andadministration among them – some of
their concerns are more acute today
than they have been for many years.
“Private clients face economic uncertainty,changing tax laws, issues with children andinheritance, and geopolitical issues,” says
Joe. “Add to that an increasingly complex
cross-border trade and tariff situation – andof course they still want their wealth towork for them, to generate the highest
returns while managing risk. This is why
they need the best professional advice.”

Private clients

face economic

uncertainty, changing
tax laws, issues
with children andinheritance, andgeopolitical issues.

THE RIGHT RELATIONSHIPS
Joe emphasises that finding the rightsolution is based on developing theright kind of relationship with the client,which requires rather unique skills andknowledge. Discretion and sensitivity iskey, because to delve into the financial
affairs of individuals and families is
to open a window into their lives.
“Private clients do not want to trust
another professional with their financial
information unless that individual ispersonable, real, smart, understands
family dynamics and has empathy forthem,” he says. “To understand a privateclient, whether an individual or a family,
you need to build the relationship andbuild trust. We, as professional advisors,need to show that we understand wealthand how the responsibilities associatedwith it are important. And we need toshow a human side – clients like to knowwhat an advisor does outside the office.”
Joe and Nigel also agree on anotherimportant aspect of working with privateclients: the necessity of working withother professional services providers.
“The type of work we undertake
often involves lawyers, accountants,
other professionals and financial
institutions,” says Nigel. “One has to bea team player, especially if the service
a client is seeking is to be provided ona timely and cost effective basis.”“You have to be able to work with aclient’s full team of advisors, which might
include an investment manager, a solicitor,
an insurance advisor and bankers,”
says Joe. “We might recommend
solicitors to draw up paperwork fora transaction, prepare wills and trust
agreements.” Joe acknowledges that
this is beneficial to all involved – but
most importantly, this collaborative
approach is key in enabling clients toaccess the precise expertise they need.
AN INTERNATIONAL OUTLOOK
Neela Chauhan, private client tax
partner, UHY Hacker Young, London,
UK, has also built up trusted contacts
in a number of areas, from banking toproperty. Based in the city that claims
the world’s largest population of ultrahigh net worth individuals (people
whose net worth exceeds USD 30
million, excluding the value of theirprimary residence), she believes thatworking across national borders will
also become increasingly important inproviding services to private clients.
The world is shrinking, according to
Neela. Wealthy individuals lead anincreasingly international lifestyle, as theKnight Frank report suggests. They might
live in several countries over the courseof a year, or work in one jurisdiction
and live in another. By doing so they
inevitably encounter the complexities
of divergent tax systems. Without theright advice, this can lead to double
taxation and an excessive tax burden.
“As an example, a US citizen renting out
a property in the UK must absolutely
obtain the right advice, or they may end
up paying income tax in both countries
without unilateral relief, as there is amismatch in the domestic reliefs available.
This also applies to capital gains tax on
the sale of the property,” says Neela.
She also points to similar mismatches
between tax systems in various
European countries and the UK, too.
Individuals who reside, invest or work
abroad need specialist advice or risk
paying far more than they need to. This
is not tax avoidance, Neela adds – it issimply organising tax affairs so as to
avoid punitive charges when overlapping
between different fiscal regimes.

16 UHY GLOBAL January
July 20192020

GLOBAL AND LOCAL
Nigel Rotheroe also notes the increasinglyinternational nature of private clients,
which he says puts an onus on membersof a global network like UHY towork together to offer the very best
private client service. “Crossleys has
provided assistance in relation to client
structure work to other UHY member
firm offices, and has in recent years
assisted UHY offices in Ireland, Israel,
Italy, Malta, the UK and the US withvarious client offerings,” he says.
Neela adds: “The advantage of being partof the UHY network is that, while you
can only ever expect to be a true expert
in the tax regime of your home country,
if I need information about the nuancesof the tax system in another country, I
can quickly pick up the phone and ask
a colleague in that part of the world.”
This is especially important, because
it is not just the arcane details of tax
or property law that differ between
jurisdictions. The culture of wealthprotection and inheritance practice ishighly dependent on local circumstances.
Around the world, UHY member firms
offer private client services shaped by
local priorities. In Saudi Arabia, forexample, UHY Abdul Jabbar specialises
in establishing ‘family offices’, a typeof financial device to manage family
wealth, plan for family financial futuresand provide other services to membersof the family under their ongoingoversight. In Australia, UHY Haines
Norton has expertise in the creationand management of Testamentary
Trusts, which provide more control
over the distribution of assets tobeneficiaries, as well as tax advantages.
In Costa Rica, Omar Pérez, partner at UHY
Auditores y Consultores, S.A, explainsthat the estate planning services his
firm offers to private clients, in someways, is fundamentally different fromthat offered in Europe or America.
Omar says: “The interesting thing with
Latin America is most people manage
their personal wealth through theircompanies. I am pretty sure that is
because we do not have a liquid stock
exchange in Costa Rica, so if you haveyour money in a personal bank accountor personal investments, you will not

GLOBALPERSPECTIVES
NEWS

have the same return as if you have it
in a business. And it is so much easier
to handle inheritance this way too. It is
important to remember that the majorityof businesses here are family businesses.”
AN INFORMED CHOICE
Both high net worth individuals and lesswealthy individuals keen to make themost of their money are increasingly
well informed. “People are morefinancially astute, with information
being more readily available throughadvanced technology and media
coverage,” says Neela Chauhan. “Theyknow that there are more ways tomake their finances more efficient.
They realise they have more choice.”
It is against this background that UHY
member firms around the world aredeveloping specialised private client
services. The number of financially literate
individuals and families seeking to exploit
new opportunities, while remaining fullycompliant with ever more complex rules
and regulations, is growing. They demandreal expertise and a relationship with
their advisors that is built on trust. n
For more information about UHY’s
capabilities in private client services,
email the UHY executive office,info@uhy.com, or visit www.uhy.com

People are morefinancially astute,information is more
readily available

through advanced
technology andmedia coverage.

GLOBAL NEWSNEW CHIEF
JOINS IMF

UHY GLOBAL January 2020 17

DUBAI DELIVERS NEWREAL ESTATE LAWS
Dubai started 2020 with a raft ofmeasures in place to regulate andmanage its real estate market.
In September 2019, Sheikh
Mohammad bin Rashid Al Maktoum,
vice president of the United ArabEmirates (UAE) and ruler of Dubai,
announced a new Higher Committee ofReal Estate, aimed at balancing supply
and demand to ensure that construction
projects add real value to the economy.

© World Bank Group/Grant Ellis

Bulgarian economist Kristalina Georgieva
became the second female managing
director of the International Monetary
Fund (IMF) in October 2019 – the first
IMF leader from Eastern Europe and an
emerging market economy.
Georgieva has worked for the World Bankand European Union (EU). She joined
the World Bank as an environmental
economist in 1993, leaving in 2010 tobecome European commissioner forhumanitarian aid and crisis response. She
was named European of the Year andCommissioner of the Year by European
Voice newspaper for her leadership in the
EU’s humanitarian response to crises. She
was EU commissioner for international
cooperation and humanitarian aid during
the Euro area debt and 2015 refugee
crisis. In 2017, she returned to the WorldBank as its CEO.
Georgieva acknowledged the challenges
of slow economic growth, trade tensions
and historically high global debt. “Ourimmediate priority is to help countries
minimise the risk of crises and be readyto cope with downturns,” she said. “Yetwe should not lose sight of our long-term
objective – to support sound monetary,
fiscal and structural policies to build
stronger economies and improve people’s
lives. This means also dealing with issues
like inequalities, climate risks and rapid
technological change.”
Georgieva replaces Christine Lagarde,
who left the IMF in September 2019.

The city of Dubai, the most populous
in the UAE and a major regional andinternational business hub, is renowned
for its large-scale construction
projects and opulent hotels. Despite
contributing 13.6% of GDP to Dubai’s
economy in 2018, the oversupply of
property has led to a reduction in thevalue of real estate in recent years.

Sheikh Mohammed stressed the needfor ‘quality projects’ built at a pacethat brings value to the economy. Witha membership including the General
Secretariat of the Dubai Executive
Council, the Dubai Land Department
and senior representatives of major
property developers, the committee
was welcomed by industry experts, who
believe that restoring balance in Dubai’s
real estate market will consolidate its
position in premium global real estate.
The committee forms part of abroader regulatory framework toboost competitiveness and enhanceinvestment in Dubai real estate.
This includes new laws on joint
ownership and reorganising theReal Estate Regulatory Authority.

HUMAN TOUCH FOR
EMERGING TECH
The World Economic Forum (WEF)
has announced a Global Technology
Governance Summit in April 2020,
aimed at shaping a human-centred
approach to the governanceof emerging technologies.
The summit follows the first meetingof the WEF’s Global Fourth Industrial
Revolution Councils at the Centre
for the Fourth Industrial Revolution(CFIR) in San Francisco, US, in 2019.
It brings together stakeholders fromgovernment, business, civil society,startups and international organisations.
CFIR was established in 2017 as a hub
for stakeholder cooperation in developing
policy and collaborations that accelerate
the benefits of science and technology.
The councils align with CFIR’s core focus
areas – artificial intelligence, autonomousand urban mobility, blockchain, drones
and aerial mobility, the Internet ofThings, and precision medicine.

Governing emerging technologies
to benefit business and society while
minimising risks, is one of four urgent
global issues to be discussed at theWEF Annual Meeting in Davos inJanuary 2020. Next-generation lifesciences, smart cities, mobility, robotics
and human labour and advanced
computing in the light of artificial
intelligence and machine learning
are themes likely to be significant.
The announcement comes as otherinternational organisations aim to shapepolicy and governance around emerging
technologies in a societally-focused way.

18 UHY GLOBAL January 2020

2020 VISION:ACCOUNTINGFOR CHANGE

WHAT DOES THIS YEAR HAVE IN STORE FOR A
PROFESSION STEEPED IN TRADITION BUT AS
VULNERABLE TO CHANGE AS ANY? WE LOOK AT
SOME OF THE LIKELY DIRECTIONS OF TRAVEL

E

xtraordinary transformation sweeping through societies,
economies and cultures means that long-term planningfor many businesses amounts to little more than a journey into
the unknown. Driven primarily by rapid technology advance,changing attitudes and expectations and a new wisdom thatto disrupt is good, businesses and consumers inhabit a worldof uncertainty. The accounting profession, like most others,
is not immune to change. So what is the profession expectingfrom 2020?
It is likely that this year will be rememberedless for watershed moments or rulings,
than for the relentless need to embracechange. To turn challenges and threats
from disruptive technologies into
opportunities for growth. To implementchanges required by tougher regulationand international quality standards. To
manage the talent pool and workplaceskills mix through astute recruitment,
development and succession planning.

EMBRACING TECHNOLOGY
Cloud accounting has been the
breakthrough success story of the last few
years. Moving from the desktop to thecloud has benefited clients enormously
in terms of speed, accuracy, efficiency
and a closer collaborative relationshipwith accounting providers. Governments
have also assisted in accelerating
uptake through online policies, suchas the UK’s Making Tax Digital rollout
which will continue through 2020.

Unsurprisingly, the biggest agent ofchange for the profession in 2020 andbeyond continues to be technology, andin particular artificial intelligence (AI)and robotic process automation (RPA).
These will continue to impact on data
analysis, generating better predictions,deeper insights, reducing risk andcutting the cost of human error in audit
and assurance. However, the rate ofadoption by businesses and advisors
in 2020 will depend not only on the
choice and accessibility of cost-effective
analytics tools and their potential returnon investment, but also on the morenuanced issues of trust and humanjudgement, and having the capabilities
to implement change effectively.
Tools such as CaseWare’s IDEA analytics
product is an example of an establisheddesktop and cloud accounting software
provider now incorporating AI to enable

FEATURE – 2020 VISIONa step change in what accountants
can achieve through precision analytics
and the value this adds for the client.
Described by AICPA (the American
Institute of CPAs) as the dynamic audit
solutions of the future, products like
IDEA enable data collection from any
source – and the more data you have,the more insight you build. An RPA-based
workflow engine quickly generates all the
workpapers auditors need, and advanced
AI-based analytics launching in 2020
will make possible additional substantive
testing of datasets, with limitless inputs,
resulting in a scalable and rigorous
solution for client engagements. The rightproduct choice is an important one foraccountants to make but so also is when
to make it. Each firm’s circumstances andmotivations to change will be different,
but an increasing client expectation thattools such as these will be deployed bytheir external auditors means uptake ismore likely to be sooner than later.
Looking further ahead, the practicalimplementation of real-time distributed
ledgers (blockchain technology) is
unlikely to be widespread by the endof this year, or the next. However,infant technologies often surprise,so the profession is not taking its
collective eye off the ball, and there
continues to be significant investment inblockchain development by many large
professional service providers and systems
integrators with the financial capacity
to trailblaze. Mainstream adoption isalmost inevitable, but perhaps not yet.
KEEPING UP STANDARDS
According to Tom Seidenstein, chairof the IAASB (International Auditing
and Assurance Standards Board) in his
October 2019 address to the ICAEW
conference in London, UK, “Setting
standards at the international level is themost effective way to respond to therelentless globalisation of business.” In2020, audit firms will begin preparations
for implementing a new raft of IAASB
measures aimed at improving audit
quality standards still further, andexpected to come into force in 2021.
The revisions to existing international
standards and the introduction ofbrand new measures come after five
years of planning and consultation.

UHY GLOBAL January 2020 19

In recent years the quality and efficacy
of audits and auditors has been brought
into question by a spate of high-profile
corporate failures, including – mostrecently – the collapse of UK travel giant
Thomas Cook. So heightened scrutiny ofa company’s books in the public interest
will be seen as a welcome development
and the profession must engage with andbe ready to deliver on the new standards.
Jerry Townsend, audit and assurance
partner at UHY LLP in the US, UHY Board
member and head of UHY’s global audit
special interest group, believes that audit
firms – and especially those operatinginternationally – must begin to tackle thesechanges now. “Working with colleagues
to deliver cross-border client audits tothese new and revised standards, could
mean a substantial overhaul of existing
quality and quality review systems for allparties, to consistently mirror the newrisk-based approach,” he says. “We will
also need to assure engagement quality at
the front end of the process rather thanafterwards, which is not traditionally theway it has been done. There are significant
implications for engagement partners
and every audit firm will need to evolveits governance to suit. This could easily
take a year or more to implement.”
The International Ethics Standards
Board for Accountants (IESBA) develops
and promotes ethical standards andguidance for professional accountants.
It also has been consulting on revisions
for accountants to meet more stringent
public expectations on role and mindset(professional scepticism), in a projectaiming to complete in 2020. Together
with a 2021-targeted initiative toextend the ethics code to non-assurance
services, there will be plenty to occupy
the profession in the year ahead onthese vital public interest goals.
TAXING THE DIGITAL ECONOMY
The many-faceted anti-BEPS (baseerosion and profit shifting) programmefrom the OECD continues to gather
momentum with an increasing numberof countries signing up to the actions
and the multilateral instrument to help
ensure fair and proper distribution ofmultinational profits to the jurisdictions
in which they are made. In the US,
businesses and professional services
providers are still navigating the Tax
Cuts and Jobs Act (TCJA) and thiswill continue through 2020 as the IRS
implements its tax code reform.
But tax repatriation issues for technology
operators in the digital economy –where physical trading presence is
not a measuring point of economic
activity – have taken longer to address.
Despite the digital economy being
Action Plan 1 out of 15 action plansin the BEPS framework, the OECD’s
detailed proposals for tackling online
sales have only recently been publishedfor consultation, to a mixed reception.
The proposals aim to force the tech giants
to pay tax in the countries where they
make the sales, rather than transferring
to offshore or other low-tax jurisdictions,but some critics believe the measures do
not go far enough; and in particular, thatthe exchequers of poorer or developing
economies will continue to largely missout on tax income they should have.

20 UHY GLOBAL January 2020

Some countries have bypassed BEPS
altogether with digital economy
discussions of their own. Andrew
Snowdon, partner and head of tax, UHY
Hacker Young, London, and chair of
UHY’s global tax special interest group,says the UK is at an advanced stage
already. “The UK government’s Digital
Sales Tax will be introduced on revenues
earned from April 2020,” he says.
“There has been an appetite for sometime now to bring the large internetcompanies into line, and the new tax will
target search engine companies, online
marketplaces and social media platforms,
that derive value from UK users.”
It is clear that internet-based
businesses will be working hardin 2020 with international tax
specialists to understand and deal
with the impacts of the proposals.
CULTURE AND CREDENTIALSThis year will also see accounting firms
and professional bodies continuing todevelop their people policies to more
appropriately reflect the realities ofchange: specifically the need for broader
IT and business development skills, anda recognition that the workplace and its
associated culture cannot stand still.
The influence of the millennial generation(25 to 40 year-olds) is well documented.
More tech-savvy than their predecessors,less traditional, and more open to new
ideas, they are more visual and would
prefer to learn from YouTube than fromFEATURE – 2020 VISION

an instruction manual. They expect a
digital workplace. In the US, there is
now a majority of millennials in work.
In many countries and industries theneeds and expectations of this workforce
are outpacing the provision – and withgrowing competition for talent across theboard it is incumbent on employers tounderstand this and invest accordingly.
The accounting profession, like others,
is finding opportunity in changing
generations, because technology advanceis forcing the issue. Embracing AI and
RPA means realigning the organisation
skills base and the development pathof partners, managers and staff. In
2020 firms should be focused on
managing the declining need for clerical,
repetitive or data-heavy duties, with thegrowing one for systems and analytics,
interpersonal skills and leadership. The
accountant of the future will be a trusted
advisor to the client of the future.
Professional bodies are also stepping
up. In the US, a joint initiative between
two heavyweight authorities promises totransform the career licence of tomorrow’s
accountants. The American Institute of
CPAs (AICPA) and the National Associationof State Boards of Accountancy (NASBA)
are developing a new framework for the
CPA licence of the future. It recognises theneed to train and test in technology skills,
business intelligence and IT governance,
as well as accounting, and will offer
candidates options for specialisation,such as in audit, or cybersecurity.

Dennis Petri, partner, UHY LLP in
the US, and chairman of UHY
International, believes the evolving
licensure requirements will be influential
around the world. “The CPA profession
must adapt quickly,” says Dennis.
“Change like this must be rapid,transformational and substantive.
Technology and analytics expertiseis essential; the qualification will testan accountant’s ability to use andreview systems. It is an exciting –and necessary – step forward.”
The new licence, once redesigned,
will replace existing initial licensure
requirements but will not require therelicensing of existing CPAs. Instead, it isa benchmark for the future generationof accountants. “There is no completion
date set yet,” says Dennis, “so this is
not something we should expect in2020. But it does mark a significant
preparation for the future, and willplay a big part in encouraging talented
young people into the profession.” nCOGS AND WHEELSUHY GLOBAL January 2020 21

INTERCOMPANYCONNECTIONI

n this issue our Cogs and Wheels section looks at
the challenges multinational enterprises face fromtougher regulation on intercompany transfer pricing– and how UHY member firms can help.

TRANSPARENCY COMES AT A PRICE
When the OECD/G20 countries revised
guidelines on transfer pricing (TP), partof the 2015 BEPS report (anti-baseerosion and profit shifting to reduce tax
avoidance) they raised the bar considerably.
Since implementation began over
130 countries have signed up to newinternational framework measures.
In the same period, the US brought into
law the 2017 Tax Cuts Jobs Act (TCJA)
which affects existing US transfer pricing
provision and like BEPS, raises scrutiny toprotect the US tax base. However theselaws are not part of OECD guidelines
or BEPS recommendations and do
not apply equally to all countries.
Action 13 of the BEPS programme
includes a three-tiered approach to TP
documentation: the Master File, the Local
File and Country-by-Country reporting.
Its aim is to improve transparency anddeter companies from exploiting tax
loopholes. The US TCJA also introduces
new reporting requirements for intangibles
as well as complicated international tax
concepts. As a result, multinationals
are overhauling their TP policies andprocess – a painful journey for many.
A NEW SYSTEM UNDER BEPS
Businesses facing a greater
compliance obligation have had toallocate more resources for the extra
collection of data, its validation andanalysis, and preparing reports.

Under BEPS, businesses transacting with
their operating entities in other countries
must now disclose to tax authorities
a full account of operations, financial
activities and transfer pricing policies, forgoods and services (the Master File) as
well as providing detailed intercompany
transaction data from each businessin each country (the Local File).
To complete the three-tiered requirement,a Country-by-Country Report is compiled,comprising an enterprise’s aggregate
data on the global allocation of income,profit, taxes paid and economic
activity among all the tax jurisdictions
in which it operates. The report isshared with tax authorities in thesecountries for use in high level transfer
pricing and BEPS risk assessments.
GLOBAL CONNECTED SOLUTIONSGiven the changes, the challenges andcross-border nature of transfer pricing,the involvement of local tax authorities(whether in the US, or operating under
BEPS TP provisions, with their different
legislative implementations and guidelines)
it makes sense for multinationals totake advice from professional specialists.
Transfer pricing can be an effective
tool for international tax planning, so
it makes sense to outsource analysis,
documentation and planning to a trusted
advisor with international connections.
The UHY network operates in over 100
countries and is constantly expanding

to meet the increasing global needs ofclients. A key competitive differentiatorof the network and its member firms is
its longstanding collaborative culture andstrategic goal of working together – withclients and with each other. The result iseffective, seamless and high quality work,and transfer pricing is a typical example.
KEEPING CURRENT
UHY strongly values knowledge-sharing
between firms in different countries.
UHY’s TP specialists collaborate weekly,
meet and exchange ideas via formal
meetings, working together on client
engagements – despite borders.
The network’s global tax special interest
group infrastructure facilitates this andenables member firms to stay current
and offer the most authoritative advice.
Plus two specialist transfer pricing
centres of excellence representing the
US and the BEPS jurisdictions ensurethat TP knowledge sharing and effective
client support is a key priority during
this time of regulatory change.

CLIENT CAPABILITY
UHY member firms offertransfer pricing support toclients in the following areas:• Documentation and compliance•	Design and implementationof TP policies• Benchmarking services• Defence files and dispute handling•	Analysis for highly leveraged entities• Valuations for tax and TP purposes
For more information about UHY’s
capabilities in global tax and transfer
pricing, email Andrew Snowdon,
global tax special interest groupchair, a.snowdon@uhy-uk.com,
or the UHY executive office, info@
uhy.com, or visit www.uhy.com.

22 UHY GLOBAL January 2020

CLIENT STORYSTAR CHARITY PARTNERSHIP
S

pecialist sector knowledge and global reach enables UHY toprovide expert support to a leading HIV/AIDS charity foundedby Sir Elton John.

The Elton John AIDS Foundation(EJAF), is one of the world’s foremost
independent charities working to support
people affected by, or at risk of, HIV
or AIDS. The organisation is backed bymany high-profile and internationallyrenowned patrons and trustees, frommusicians like Sting and Annie Lennox,
to tennis legend Billie Jean King.
With operations in both the UK and theUS, EJAF is the fourth largest philanthropic
funder of global HIV grants. As of 2018, it
has raised over USD 400 million to support
HIV-related programmes across Africa,
Asia, the Americas and Eastern Europe.
SPECIALIST KNOWLEDGE
In 2017, after seven years working
with the same auditor, and following
recognised good practice, EJAF’s UK
arm undertook a review and tender
process. Fiona Russell, global financedirector at EJAF, says, “Having worked
with the same auditor for several years,
and despite getting a very good service,
we felt it was time to see what othernetworks could offer. We invited several
auditors, including the incumbent firm,
to submit tenders. We focused on
networks that offered experience withcharity accounts and grant foundations

and, due to the consolidation of our
UK and US operations, we wanted tofind an audit partner who could offer
us a global service. We did not consider
one of the Big Four networks.”
The specialist expertise presented by audit
partners Subarna Banerjee and Daniel
Hutson, UHY Hacker Young, London, UK,alongside the UHY network’s global reach,provided the solution that EJAF needed.
“We were impressed by the fact thatUHY Hacker Young was a larger firm withmore experience in giving specialist advice
about VAT, not-for-profit organisations
and other queries, plus the fact that we
could use the same network to build
a relationship with UHY member firms
in the US for the audit of EJAF there –which is something we acted on very
quickly when Subarna put us in touchwith Michael Burke, audit partner at
UHY LLP, New York, US,” says Fiona.
“The UHY team had the expertise andexperience to help EJAF move forward
and our trustees were immediately
impressed by their enthusiasm.”
TRANSATLANTIC PARTNERSHIP
Since their engagement in 2017, UHY
Hacker Young in London and UHY

LLP in New York, have successfully
carried out audits of both EJAF UK and
EJAF US. They have also supported
EJAF UK through the government’s
Making Tax Digital programme andthey offered specialist VAT advice foran event which took place in France.
Fiona says, “Working with Subarna andhis team has made the year end audit
efficient, smooth and straightforward.
Despite the Board meeting date moving
forward by a few weeks, both the US andthe UK financial statements were readyin time for sign-off. Subarna, as our maincontact, is always extremely helpful andresponsive. We look forward to building
on our already strong partnership which
has a great cultural and commercial fit.”
For more information, contact Subarna
Banerjee, UHY Hacker Young, London,
UK: s.banerjee@uhy-uk.com

UHY had the expertiseand experience
to help EJAF

move forwards.

SERVING CLIENTS, SERVING COMMUNITIESUHY GLOBAL January 2020 23

LEADERS IN THE MAKING
Every year, UHY Haines Norton(Auckland), New Zealand offers
local students a chance to win astudy scholarship for a commerceor business studies degree. It
recently announced its 2019
winner as final year student Steven
Philalom, who excels academicallyand within his community.

BIG DRIVE FOR
FUTURE TALENTW

hen audit partner Steve Wendling,of UHY LLP in St Louis, Missouri,
US, realised his son’s love of golf was
more than a passing fancy, he had no
idea it would lead to a sponsorship deal
and platform for nurturing future talent.

Steve was first introduced to the American JuniorGolf Association (AJGA) through his son Steven’s
participation in AJGA tournaments throughout the
US and Canada. The AJGA regularly held eventsin St Louis and Steve, who was responsible forbusiness development in the Midwest, saw potential
for a partnership to help young players develop
their skills. Two years later, UHY LLP is the official
accounting firm of the AJGA – sponsoring seven
tournaments annually and supporting an annual
accounting internship at the AJGA’s headquarters.
“UHY LLP’s relationship with the AJGA began witha local agreement to serve as the title sponsor of its
St Louis tournament in 2018,” says Steve. “It wasnamed the UHY St Louis Junior Championship, andin our first year as sponsor the tournament hosted
78 junior golfers from 22 states and seven countries.”
UHY LLP became a national sponsor of AJGA
tournaments, combining support with communityand charitable activity. A new three-year agreement
began in 2019, and Steve now administers the
UHY Prep Series, junior golf tournaments thataward exemptions for entering the AJGA JuniorChampionships, opening opportunities to moreyoung golfers.
Funds raised through the initiative will support
AJGA’s grassroots ACE (Achieving Competitive
Excellence) Grant programme, as well as helping
young people pursue scholarships throughthe Evans Scholars Foundation. The non-profit
organisation Vets Returning Home, rehabilitatingsoldiers returning to civilian life, will also benefit.

The scheme is about identifying
future entrepreneurs, managers or
CEOs. “Winners are not necessarily
top students but those who apply
themselves and set examples toyounger students and peers,”
says Debbie. “Steven works hard
at school but also gives up histime to volunteer, fundraise andmentor younger students.”
Steven, whose Laotian parents
met in a refugee camp, works with
anti-bullying groups to help raiseawareness for youngsters struggling

The scholarship is open toschools in West and Northwest
Auckland. Debbie Robson, thefirm’s marketing coordinator says:“It is a way we give back to ourcommunity. There are not manyscholarships like this locally.”
Steven plans to undertake a
Bachelor of Commerce at Auckland
University, majoring in accounting
and information systems.

© Waldemar Majek

Steve Wendling (right) withyoung tournament winners

with mental health issues. When
asked what is important to him hesaid, “Family, friends, good mental
health, a sustainable future.”

CHARITY FUNDRAISERIS A SMART MOVEUHY ECA in Poland has areputation not just for professional
excellence – ranked as one of
the best audit firms in Poland– but also for its charity andcommunity engagement.
Since 2018, UHY ECA has
sponsored a chess tournament in
Warsaw to raise awareness of thelife-limiting disease cystic fibrosis(CF). Grandmasters and amateurs
take part while learning about
CF’s symptoms and treatments.
The entry fee for the 2019 event
was donated to the Polish Society
for the Fight against Cystic Fibrosis(PTWM), the main CF charity
to which UHY ECA offers pro
bono support. PTWM volunteers,
mainly parents of sufferers, gave

presentations and information,
while coffee and cake boosted
funds to PLN 15 880 (USD 4,120).
Competitors played in two
groups: under-13s and an ‘anyone
else’ regardless of age or skill.
Eleven grandmasters competed,including legends of Polish chesssuch as Bartosz and Monika
Soćko, Radosław Wojtaszek,
Kacper Piorun, Mateusz Bartel
and Michał Krasenkow.
“This cause is so close to our hearts
and we were delighted to support
the work of PTWM,” says Michał
Kołosowski, partner. “It brought
the community together andWarsaw TV and radio attended.
We hope the next challenge will
be even bigger and better!”LET US HELP YOU ACHIEVEFURTHER BUSINESS SUCCESS
To find out how UHY can assist yourbusiness, contact any of our member
firms. You can visit us online atwww.uhy.com to find contact details
for all of our offices, or email us at
info@uhy.com for further information.

UHY is an international network of legally independentaccounting and consultancy firms whose administrative
entity is Urbach Hacker Young International Limited,a UK company. UHY is the brand name for the UHYinternational network. Services to clients are provided
by member firms and not by Urbach Hacker Young
International Limited. Neither Urbach Hacker Young
International Limited, the UHY network, nor any
member of UHY has any liability for services provided byother members. © 2020 UHY International Ltd.
The editorial opinions expressed in the magazine may
not necessarily be those of UHY International Ltd
or its member firms. Every effort is made to ensure
accuracy but the publishers cannot be held responsible
for errors or omissions. No part of this magazine may
be reproduced in any form without prior permissionof UHY International Ltd. We thank all contributors.
Design: Flex with UHY International. Editorial: Flex
with UHY International. Photography supplied by UHY
member firms, their clients and from stock.
Front cover: Xinhua News Agency/​Shutterstock

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