Frans Samyn was appointed chief executive of BDO International in October 2002, having been managing partner for the previous 23 years of the Belgian BDO member firm, now known as BDO Atrio.  Educated in Belgium, the U.S. and the Netherlands, Samyn is proficient in five languages. He will step down in September 2008 when his term comes to an end. BDO has appointed Jeremy Newman, managing partner at U.K. member BDO Stoy Hayward, to take over effective October 1. However, Samyn is still in charge at the firm's global coordination office in Brussels. BDO International is the fifth-largest accounting network in the world and includes member firm BDO Seidman in the U.S. Samyn sat down recently to discuss recent trends in the accounting profession with WebCPA.

Q: Do you expect that the convergence process between IFRS and GAAP will go smoothly for firms like yours?

A: The first thing about the convergence of the standards is that it's an amazing step forward in the world of accounting. For the first time we know that everyone is going to use the same reporting language worldwide. That is an advantage for the businesses that use it. It is also of course an advantage for the auditors who have to audit the accounts because the same standards will be used worldwide. In other words, it means that you'll be able to spread the education and training of your staff people and the expertise that you have in-house all over the world on a consistent basis, so they will be able to deliver consistent quality. Will the implementation go smoothly? For the countries that are already committed to the adoption of IFRS worldwide, this is already a process going on in Europe, the base of BDO. We have had experience with IFRS for many years. We definitely do have the capabilities of spreading it around to the United States and other countries that will now be adopting IFRS.

Q: It seems like professional judgment is going to play a greater role in setting standards and in giving leeway to accountants. Do you think that needs to be codified in some way by the SEC or by other regulators?

A: IFRS is principles-based. There are much fewer rules. Somebody has explained that there are two inches of IFRS prescriptions and principles, while there are two feet of rules in the U.S. governing the same issues. To the extent that principles are not being worked out, they require more judgment from the auditors. The auditors also want quite urgently for the standards on auditing to be converged as soon as possible so auditors are using the same ways of arriving at their judgment. The judgment they should arrive at will not be prescribed, but it should prescribe what the objective and the process are, and what the caveats are. There will be criticisms sometimes on judgment, which is normal. There will be alternative views, and that is why it will be important for the profession to have a framework under which we can operate when expressing these judgments so they're not being contested or subsequently revised.

Q: Do you think there needs to be a legal safe harbor for accountants in exercising their professional judgment?

A: There has been a lot of discussion in the past that is still ongoing about liability limitation. It is an issue that we believe is part of the debate on the sustainability of firms. In terms of unlimited liability, we are operating at the moment in a wide-open structure, and we have to come to a workable arrangement so that the firms are sustainable. It's not only from a competition standpoint. That's sometimes mentioned as a threat, that one of the firms will disappear. It's also to be able to attract the talents necessary to maintain auditing by audit firms as a system in the future, in order to have private organizations for a public function.

Q: Does there need to be as much of an emphasis on the convergence of auditing standards as well as accounting standards?

A: The scope of standards on audit is different. It deals with audit firms, whereas International Financial Reporting Standards deal with businesses worldwide. The international standards on auditing already have been adopted as the basis for local auditing standards. They are to some extent different from the auditing standards, GAAS, used in the United States. Convergence on a worldwide scale, including in the United States and other places, is not as far advanced, but I'm sure the effect of the adoption of IFRS will also speed up the process of convergence internationally of the auditing standards.

Q: Could you tell me about the process of meeting with the other audit firm CEOs in roundtable discussions?

A: The Global Public Policy Committee is a committee consisting of the Big Four plus two - Grant Thornton and ourselves - largest accounting firms. It has a very intense program of everything that is related to global public policy, not only public policy in the United States. My personal involvement is that I am part of the committee of the CEOs of the Global Public Policy Committee, who meet four times per year. I also am very much involved in the activities this year. The CEOs also were involved in the roundtables that were held.

Q: So in previous years, it was mostly local people at the firms who were participating?

A: There has always been a great degree of CEO involvement. High-level partners are also participating in the GPPC. They have two working groups: a standards working group and a regulatory working group. So it's high-level partners and the network has two representatives.

Q: You mentioned about the Big Four plus two. Do you expect to see a day when BDO will be part of a Big Five, at the level of the Big Four?

A: BDO has chosen to be part of this group because we have as an ambition that we serve trans-national clients. We are operating internationally and we want to deliver quality services to clients consistently wherever in the world they are. Anything that is related to global public policy is part of our business. We call ourselves "the Big Four plus two." One of the issues we find is that there is a perception in the market that size means quality. We say, "Let there also be quality without that [large size]." Of course, you do need a certain magnitude and a certain volume of business in order to have a sustainable network operating worldwide. It requires a lot of investment, quality, training, risk management and governance of firms. We don't have the ambition to be a Big Five firm. We just want to be an alternative for clients operating internationally. By joining this organization, we want to show there is an alternative, that there is also a BDO and a Grant Thornton that can supply those services.

Q: Are you finding that you have been able to get many engagements that used to go to the Big Four firms?

A: I don't know the exact statistics, but it is a fact that in the larger capital markets there is a net movement away from the Big Four toward firms like BDO.

Q: What do you think is going to be the trend in the accounting profession in the year ahead? Will it be a lot more involvement in tracking the sub-prime meltdown or other concerns like fraud detection?

A: We want to be able to deliver what the ultimate client expects. The client is the investor, the shareholder. We want to deliver value to the shareholder. Part of that is there is a higher expectation in relation to fraud detection. Now it is not exactly clear what they do expect, but they do expect more than is being delivered today. The other thing is that, with our present sub-prime issue, there is also of course the question of what is the role of the auditors in that? It is also clear that it was an event that occurred in the second quarter of  '07. There weren't indicators in the first quarter. The ratings agencies are involved, the banks are involved, and so forth. What we believe, though, is that this will have an effect on businesses that have been investing just as investors in these products without really being involved. And it will be widespread. The GPPC has already issued a statement to the public firms on what is expected of them. We have been actively participating and will continue to do so. It is a choice to be a part of this group.

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