Call for a regulatory body for professional accountants

The major plus point for such business is the trust in running the business as they were run by family members and even with lax controls in the beginning, they continued to grow.  However, disadvantages mainly arise from family feud, death of the elders sometime leading to family disputes in distribution of estate and so on.

Later on the commercial transactions became some what complicated mainly in financial sector, by introduction of forward, swap and derivate transactions, which meant  employment of professionals in all types of business activity including construction.

Still there is need for more professionally trained managers in all fields particularly in finance and information technology. Finance is the hub of every business venture, hence a strong, qualified professional who is accountable to his professional body, can help growth of business in a planned manner.

Should they continue as family businesses?

I personally feel after the take off stage of business and when it has reached to middle tier family business, it would be prudent to divide into units of smaller size  to be managed by family members as independent companies. This would then mean, less difficulties later on in the life as some of the inheritance issues can be very complicated and sour in family life.

In any case, if a family business is allowed to continue as a large group, then its better to convert this into public shareholding company by inviting public subscription of shares. This would undoubtedly mean giving part of the control (minority shareholding) or majority control to outsiders. But the advantage is that the equity which otherwise would remain locked, can be disinvested and used for other purposes.

How do we compare UAE companies with UK and Africa, where you have work experience?

The professional management gap is still there, although over the years it has narrowed considerably. Information technology, computerisation have gone a long way in reducing this gap. Also more professionally qualified staff is available all around. Obviously this varies from country to country within Africa.

How would conversion to IFRS (international financial reporting standards) based reporting system help the businesses?

This is a very important question. As already mentioned above, there is uniformity required in the training and education process of accountants, the ultimate goal being common understanding of the issues and problems and their solutions.

In the same context, IFRS (international financial reporting standards) are produced to have similar reporting requirements throughout between the member countries.

Thus, the reader of financial statements issued in one country can easily compare the financial statements of the same entity in another country in case of multinational companies, (exception being some local regulatory requirements) for better understanding.

In a global enterprise environment, this goes a long way to assist the investors, lenders and other interested parties.

How is your company AuditEx different from other firms?

All professional firms would tend to offer the same service. The difference would lie only in the experience of the management, their understanding of the local regulatory system and that of the countries they are dealing with.

Indeed, a professional who has served the economy over a number of years cannot be compared with a new comer for local regulations etc., and for professional experience. The trust and confidence matters a lot.