Indian entrepreneurs continue to display indifference towards employing professionally qualitied accountants, thereby exposing their businesses to higher risks, says a senior Chartered Accountant and Finance expert.
Minoo Master, Financial Controller at Medtech Global Limited, a leading health information technology company with offices in New Zealand, Australia, India and the USA and Associate Director, D’Mello Chartered Accountants, believes that people of Indian origin can achieve higher levels of productivity and profitability with better financial management, accounting systems and procedures.
“Modern businesses are constantly exposed to risks, fierce competition, and other extraneous factors which can be addressed through financial discipline and sound financial reporting. In each of these, the presence of a professionally qualified and competent accountant is imperative,” he said.
While listed companies and large enterprises understand the importance of sound financial practices and internal controls and audits, small enterprises do little to secure their financial positions and hence become vulnerable, he said.
The World Bank has ranked New Zealand as the Number 1 Country for ease of doing business but monetary pressures created by money laundering, rising terrorism and increasing economic fraud have obliged enforcing authorities including the Reserve Bank of New Zealand, Financial Markets Authority and Inland Revenue Department (IRD) to enforce stringent procedures and financial reporting standards, he said.
“Next year, New Zealand’s IRD will be effecting changes in compliance which would surely impact businesses and people offering only basis accounting and tax services. There is however a serious shortage of professionals to work with business owners on commercial and financial fronts, including risk assessment, succession planning, asset protection, internal controls, due diligence, and funding. Firms that can deliver quality value add services at reasonable costs will do extremely well in the future,” Mr Master said.
As Greek Philosopher Heraclitus said, “There is nothing permanent but change. Changes in financial reporting, revenue recognition and lease accounting will become effective next year- these in turn will influence the functioning of companies,” he added.
Born in a family of four children, Mr Master lost his father at tender age of seven. A keen interest in finance and accounting led to him to obtain qualifications as a Chartered Accountant and Company Secretary in India and later as a Chartered Accountant at the New Zealand Institute of Chartered Accounts, which is now known as Chartered Accountants Australia and New Zealand.
His career in the profession took him to Asian Paints, a listed Company in India, and later to Bahrain and Dubai.
He considered it an immense privilege to be deputed to FedEx, a Fortune 500 Company as Financial Head to establish operations in India. Migrating to New Zealand, he has had the splendid opportunity of working at Medtech Global Company Limited (listed in Australian Stock Exchange) and now as Associate Director, D’Mello Chartered Accountants.
Married to Diana, the couple has a son, now in London on Overseas Experience and a daughter living in Auckland.
According to Mr Master, New Zealand suffers from paucity of good, quality professionals who can provide sound financial and commercial advice and act as business partners by delivering value creation and addition to small and medium enterprises.
“Our SMEs face a real problem of getting timely and accurate information which can assist them in the decision-making process. The reason is that a large number of small accounting and tax service providers are not New Zealand qualified; besides, they focus on providing basic accounting and tax-saving services covering only compliance, instead of partnering at a holistic level and assisting value creation,” he said.
Mr Master cited the example of a person who had recently started a freight company.
“He bought an expensive car in the company’s name for personal use. He said that his aim was to claim back GST and treat it as an asset, using 100% for business (for FBT purposes). His accountant had told him that was a brilliant idea! Clearly, the repercussion of such an erroneous action and claim for a significant GST refund was not understood. I wished him good luck,” Mr Master said.
Acting on incorrect opinions from unqualified and unscrupulous practitioners (not covered under a professional Ethical framework like Chartered Accountants Australia New Zealand) exposes individuals to significant financial risks with IRD and banks covenant compliance, if applicable, he added.
“Community-based associations should hold user group-type meetings and invite a professional to share information and clarify doubts. It could help if the speaker can talk in Hindi or other Indian regional languages as I have seen that some people feel more comfortable while addressed in their native language,” Mr Master said.
Mr Master acknowledged the increasing awareness of the importance of accountability and transparency in recent years.
“There is a significant increase in successful businesses owned and managed by Indians. Sharing these success stories regularly with Indian Newslink and participating in Awards Ceremonies to recognise entrepreneurs of Indian origin have bene helpful. Knowledge follows awareness at such events due to the networking amongst Indians in business,” he said.
Professional firms like D’Mello Chartered Accountants have the ability to change the way SMEs perceive accountants and their services.
D’Mello has the distinct advantage of Mr Master’s senior level industry experience of more than three decades, while Director Joel Ram has a strong background in public practice. This combination will strengthen the firm to offer a one-stop-shop service to SMEs in New Zealand.
“There are currently very few small professional firms providing this type of service. The market is dominated by big and medium-sized accounting firms only. Unfortunately, they are very expensive and hence not used by most SMEs. Our firm would deliver value for money and quality service. Our Goal is to help Small to become Medium to become Large,” Mr Master said.
Photo Caption: Minoo Master