Jean Stephens, CEO, RSM International, is the only lady heading a top global accounting firm. The London-based Stephens, who gorges on parathas when in India, was recently on her “perhaps 20th trip”, observing “the business environment here and understanding what we can do with our partners.” She spoke with Khyati Dharamsi on how companies are gearing up to move to International Financial Reporting Standards (IFRS) from the existing Indian GAAP in a couple of years. Excerpts:

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RSM has recently climbed the ladders…Yes, we are No. 6 now, right after the Big Four in China and the US.

How have the practices changed at RSM?We were formed in 1964 as an audit network in US. It is now a network of independent firms all round the world. But now, a major part of our work focuses on non-audit services such as GAAP, risk management, corporate governance, counselling and advisory to companies. But most interesting for me, because that’s where we can serve very large corporate houses and India is very critical for that. The economy is huge and continues to grow at a good rate. There are many opportunities.  

What has been the learning from India?IFRS is coming up. The rest of the world has already gone through it, there is a lot that we can bring together to help make the transition easier. With professionals, we can share knowledge.

We were talking about the government and the political environment. It seems steady and stable now, which is good. That, ideally, is the base on which business would grow.

We were also talking about investing dollars. Partner a larger company, to test somewhere else outside or come into India. You are probably more open right now, in terms of capital flows from the other parts of the world. The US is just starting to come on, the UK is a bit slow, other parts of Asia - Hong Kong are also open. We were also talking about IT and opportunities for businessmen there to use IT to help them drive their business.

That would be another big area where we can add value to other companies. In that part of the world RSM International does look into audit, corporate governance advisory, internal audit. That also means transparency of market, confidence in a market. If the focus from the company perspective could be on strong corporate governance, strong corporate reporting then we could help them do that.

How will your global experience help Indian companies on the IFRS transition?We have IFRS experts around the world. We also have many publications that could be made accessible to Indian companies. I have an IFRS champions group, who are people technically specialised in IFRS. Then there are those who are specialised in parts of IFRS or in one area of IFRS. Of course, if the business here is great enough, the people will be stationed here advising a particular company.

Is a phased implementation of IFRS better than a complete shift?There have been experiences in other countries, where they started with it and then focussed on parts. That makes sense. Standardisation will benefit everybody, especially investors. The quicker you move to full compliance with IFRS, the easier it is, because you don’t face the valuations problem, that affects businesses, constantly. 

How was the initial reaction to IFRS elsewhere?It is too early, so people find the change challenging. But they understand that as globalisation continues, it makes sense. It is better and easier for markets and investors. It is just the fact that you have to have a change. The scandals also have helped raise the idea that having more standardised approaches helps everyone.

Does transacting with India help once IFRS is here?Yes, it will. With IFRS, companies know they are going to a (country having) similar system. It will help support capital flows in the country.

In Greece and other areas, will there be distressed assets available for Indian firms. Should they wait or buy?There certainly will be opportunities. Greece has issues, so does Portugal. But in other mature markets such as the UK and Germany, there are opportunities.  There are very good prospects among grown companies in Central and East Europe. There is going to be some interesting developments about eastern European companies starting work into India. That hasn’t happened yet.