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December 19, 2011

Top 30: Influencing the profession

Box out showing the top 30 list of judgesLeaders from professional bodies, firms, standards setters and regulators are among the 30 most influential people in the accounting profession. The Accountant has compiled the only truly global list of top influencers

This year The Accountant decided it was time to pay homage to the many people, from politicians, regulators and firm leaders to professional body chiefs, standard setters and chief financial officers who are currently influencing the accounting profession in some way.

We whittled down a list of more than 100 people with the help of eight expert judges (see right) to come up with our top 30. The list is broken down into three categories of influence: the top 10, 11 to 20 and 20 to 30. However, within those categories the list is not ranked.

Top 10

Photograph of Michel Barnier, European CommissionName: Michel Barnier

Nationality: French

Organisation: European Commission

Job title: Internal market and services commissioner

Michel Barnier is one of the most talked about men in accounting after issuing a number of EC proposals that could radically change the European audit profession.

The proposals include mandatory audit firm rotation every six years, further restrictions on non-audit services and a significant cap on audit firms providing financial audit services to clients.

Barnier’s influence on the profession could change the role of auditing and the business model of professional services firms as we know it.

Born in Savoie, France, Barnier launched his political career in 1973 becoming regional councillor for the Bourg-Saint-Maurice District, an alpine region in western France. He went on to become French Minister for foreign affairs and most recently the Minister of agriculture and fisheries.

In his current role, Barnier tells The Accountant he has a road map to put in place the commitments agreed to by G20 nations and to do it in an “intelligent way”.

“We have to act quickly because markets move much faster than democracy can do so at the end of November I put on the table of legislators all the legal proposals translating the G20 commitments from Pittsburgh and London in particular,” Barnier says.

“No market, no access, no instrument, no product, no territory shall remain without an efficient and intelligent regulation and supervision.

“In that context, I believe the audit industry shares with many others some of the responsibility in not seeing the crisis coming. That is why I believe lessons have to be learnt and reform is necessary.”

Barnier says the main objective of audit reforms is “more diversity, more access in the audit market, which is today very concentrated”.

“We also want to reduce conflicts of interest and introduce more transparency over what auditors are doing,” he explains.

“Of course, we also want to ensure that we have a well functioning internal market for auditors so they can work with a single license and a passport throughout the [European] internal market.”

Barnier hopes the EC recommendations, if adopted, will change habits, business models and institutions.

“I am confident the audit industry will be able to re-invent itself, clarify their mission and adapt to the new framework,” he says. “And with stronger and sounder foundations underpinning it, the audit industry will be even more competitive globally.”


Photograph of Mary Schapiro, Securities and Exchange CommissionName: Mary Schapiro

Nationality: American

Organisation: Securities and Exchange Commission (SEC)

Job title: Chairman

Mary Schapiro, who has served in various roles as a financial services regulator in the US government administrations of Bill Clinton, George Bush and Ronald Reagan, is the first woman to serve as the SEC’s permanent chairman. She was appointed by US President Barack Obama in 2009.

Schapiro began her role at the helm of the regulator in the midst of the global financial crisis and at a time when the SEC was fighting off criticism for not spotting the Bernie Madoff fraud and was due to give its decision on US adoption of IFRS.

Under Schapiro’s leadership, the decision of adoption was delayed until the end of 2011 and has since been delayed again until 2012.

The SEC’s decision could change financial reporting in the US and have wider repercussions globally if the US decides not to adopt as several countries have taken a ‘wait and see’ approach based on the US decision.

Schapiro is also a member of the International Organization of Securities Commissions (IOSCO).


Photograph of Hans Hoogervorst, IASBName: Hans Hoogervorst

Nationality: Dutch

Organisation: International Accounting Standards Board (IASB)

Job title: Chairman

Hans Hoogervorst stepped into the standard setters hotseat after former IASB chairman David Tweedy left the position in June. He is charged with guiding the accounting profession towards a single set of global accounting standards.

There is no doubt Hoogervorst has big boots to fill. Though not a qualified accountant, he brings a regulatory slant to the role and is the former chairman of the Netherlands Authority for the Financial Markets. The appointment of a non-technical chairman reflects the growing levels of diplomacy that is required to take the IASB forward.

Under his leadership, the IASB has a number of challenges ahead such as completing IFRS/US GAAP convergence projects in partnership with the Financial Accounting Standards Board (FASB); and encouraging the US to adopt IFRSs.

“Most of the world has already chosen to adopt IFRSs. What’s at stake is the future role of the US to influence, shape and contribute substantially to the future direction of accounting standards globally,” Hoogervorst tells The Accountant.

In the Netherlands, Hoogervorst is best known for his distinguished political career, which began in 1998 when he was appointed State Secretary for Social Affairs and Employment in the Dutch government. Prior to this, he spent three years as a banking officer for the National Bank of Washington.

“People want an independent standard setter but also one that listens and responds to input in a transparent manner,” Hoogervorst says. “You need to consult, to listen carefully to what you hear and to be clear in how you have responded to this feedback. I intend to use my political skills to help keep accounting as apolitical as possible.”

Hoogervorst has held a number of regulatory leadership positions such as chairman of the International Organization of Securities Commissions technical committee.

In the wake of the global financial crisis, he became co-chair of the Financial Crisis Advisory Group, comprised of high level business leaders with experience of international markets who advised the IASB and the FASB on their joint response to the financial crisis.


Photograph of Baroness Sarah Hogg, FRCName: Baroness Sarah Hogg

Nationality: British

Organisation: Financial Reporting Council (FRC)

Job title: Chairman

Baroness Sarah Hogg has been chair of UK FRC, a regulator and standard-setter responsible for corporate governance, financial reporting, audit, accounting and actuarial.

Hogg has had a successful and varied career from being a journalist to becoming the head of former prime minister John Major’s policy unit. She was the first female chair of a FTSE 100 company.

Her political experience means she is familiar with the challenges of trying to influence debates across different regulatory regimes, something Hogg tells The Accountant is “very useful” when she comes back to European arguments.

Not only is Hogg helping to shape the regulatory environment in the UK, she is also a shining example of a woman who has beaten the ‘glass ceiling’, which is still particularly prevalent at senior leadership positions in the accounting profession today.

“It’s clear that there aren’t as many women on corporate boards as I would like to see,” Hogg says.

“In the [UK] corporate governance code last year, [the FRC] developed one of the principles with respect to board selection which said that board members should be chosen against objective criteria, on merit and with regard for the benefits of diversity, including gender diversity.”

Hogg notes the FRC is planning to expand the next version of the code by requiring companies to explain what their policies are on diversity.


Photograph of Mervyn King, IIRCName: Mervyn King

Nationality: South African

Organisation: International Integrated Reporting Committee (IIRC)

Job title: Chairman

Mervyn King is a leading figure in the world of corporate governance, spearheading the King Committee on Corporate Governance since 1993, which has subsequently issued three reports in South Africa.

King’s commitment to corporate governance was recently recognised by the World Federation of Exchanges which gave him an award for excellence on the back of his work with many stock exchanges around the world that have adopted his recommendations in their listing requirements.

Most notably, in 2010 the Johannesburg Stock Exchange adopted the King Code of Governance III, which recommends listed companies produce an integrated report in place of an annual financial report and sustainability report, or explain why they are not.

This requirement was implemented ahead of any formal or legal standards for an integrated report within South Africa and globally.

King who is chairman of the IIRC is championing integrated reporting as he says the current state of corporate reporting is “no longer fit for purpose in the changed world and we need to integrate the financial and non-financial information and show how the business is going to sustain value”.

“My vision is that the integrated report will be 30 pages long and if you want to put some detail on the financials you will drill down into the IFRS statement that will be online,” King explains.

“If you want some more on sustainability issues you will drill down on the G3 guidelines sustainability report online. In the information age we must use [the internet].

“Meanwhile, the collective mind of the board would have articulated the critical financial and the sustainability issues – how one is impacting on the other and how they have embedded sustainability into their strategic thinking and planning. So, for example, the trustee of a pension fund can make an informed assessment about sustainability of the business.”

King, who is a former senior counsel member and Judge of the Supreme Court of South Africa, is not only influencing the current business world, he is also helping to shape the minds of the next generation as a professor at the University of South Africa on corporate citizenship.


Photograph of Dennis Nally, PwCName: Dennis Nally

Nationality: American

Organisation: PwC International

Job title: Chairman

Dennis Nally joined PwC US in 1974 and became a partner in 1985. During his 38-year career he has taken on many leadership roles including vice chairman of the US firm. He is now chairman of PwC International, the world’s largest accounting network, and has steered it successfully through the most recent financial crisis.

In 2011 under Nally’s leadership, PwC wrestled back the number one spot from Deloitte reporting double digit growth of 10% to $29.2bn despite the dire state of the economy in two of the biggest markets; the US and UK.

In the next five years, Nally expects more than 40% of PwC’s revenue will come from emerging economies, indicating where the networks drivers of growth are.

Nally tells The Accountant the biggest challenge of being a leader in today’s profession is dealing with significant change and in particular “the changes that are facing the profession… and how do you keep an organisation really focused on what it is we are doing day-to-day”.

He says you do this by serving clients, serving the capital market and attracting and retaining talent.

Nally is also a frequent speaker and guest lecturer on issues affecting the accounting profession and global capital markets.

On European Commissioner Michel Barnier’s current audit reform recommendations, Nally questions whether they will “really enhance and improve audit quality and…actually enhance the relevancy of the profession itself”.

“There has been for a long time what I consider to be a real expectation gap – what the various constituents out there expect from auditors and what it is we actually do in terms of professional standards,” he says.

“I would hope that through the discussions that are taking place that we really begin to narrow the expectation gap and so doing hopefully increase the relevancy of what it is we do for the capital market.”


Photograph of James Doty, PCAOBName: James Doty

Nationality: American

Organisation: Public Company Accounting Oversight Board (PCAOB)

Job title: Chairman

Texan-born James Doty is a regulatory expert who began a career at the US Securities and Exchange Commission in 1990. His current role as chairman of the PCAOB sees him at the helm of one of the most influential oversight bodies in the world. Despite being just 12 months into the role, Doty has already begun to influence the US regulatory environment.

In the past six months, Doty has launched a number of audit consultations that aim to improve auditor independence, transparency and the auditor’s reporting model. Some of the proposals, such as mandatory audit firm rotation, could change the face of the profession in the future.

Doty tells The Accountant audit is at the “core of what should be a better investment decision, a better business decision and the audit firm therefore the most important and the very heart of it”.

“The world of audit – it’s fit for purpose in the way that large engines are fit for ships – it’s the essential part of it,” he says.

“The auditor’s role is more critical to the business world and the prosperity of people, the continued confidence of investors and the flow of capital. The complexity means that auditors have to be ever more skilful in the designing and the implementing of the audits.”

In 1969, far from the cries of Woodstock, Doty began a successful legal career practising securities and corporate law and counselling boards of directors and audit committees on regulatory and compliance matters, including matters arising from the Sarbanes-Oxley Act of 2002.

One of Doty’s most influential cases is his representing the PCAOB in a landmark challenge to its constitutionality at the US Supreme Court, which he won.


Photograph of Liu Yuting, Chinese Ministry of FinanceName: Liu Yuting

Nationality: Chinese

Organisation: Chinese Ministry of Finance (MoF)

Job title: Director general

As the Chinese MoF’s accounting regulatory department director general Liu Yuting is tasked with reforming the country’s accounting profession.

Since beginning his role in 2009, Liu has been at the forefront of the MoF’s plans to develop 5 to 10 ‘super big’ domestic public accounting firms within the next decade to take on the Big Four in China.

The ultimate aim is to double the size of the Chinese public accounting profession to combined audit revenue of CNY60bn ($9.4bn) with 200,000 licensed accountants and 500,000 firm employees.

Liu has also promoted the internationalisation of Chinese accounting firms through a scheme that allowed a number of national CPA firms in China to audit H-share companies.


Photograph of Edward Nusbaum, Grant Thornton InternationalName: Edward Nusbaum

Nationality: American

Organisation: Grant Thornton International

Job title: Chief executive

Edward Nusbaum has been chief executive of Grant Thornton International since 2010. Since his appointment the network has adopted a global strategy that is being executed consistently and collaboratively throughout its member firms across the world.

Nusbaum was the chief executive of Grant Thornton US, which under his leadership tripled in size with annual revenues growing from $400m to $1.2bn, more than double the growth of any of its major global competitors during this eight-year period.

Prior to this, Nusbaum served as the firm’s national managing partner of professional services, managing partner of the Philadelphia office and national director of assurance services based in New York.

Nusbaum is a member of the International Integrated Reporting Committee and the Securities and Exchange Commissions Advisory Committee on Improvement to Financial Reporting charged with advising how the financial reporting system could be made more useful for everyone who relies on it.

Nusbaum is also a thought leader in the profession and has written and spoken on the need for stock-option expensing; prohibiting auditors from also performing internal controls work; the need for principles-based accounting; and revising lease accounting rules.


Photograph of James Turley, Ernst & YoungName: James Turley

Nationality: American

Organisation: Ernst & Young (E&Y) global

Job title: Chairman and chief executive

James Turley began his career with E&Y in 1977 at the US firm’s Houston office.

During his accounting career he has held a leadership positions throughout as New York area managing partner in 1998 and national deputy chairman in 2000.

In July 2001, Turley was appointed global chairman and chief executive of E&Y – the third largest professional services network in the world – and has helped lead the firm through one of the most turbulent periods for the global accounting industry, which suffered widespread revenue contractions in fiscal 2009/2010.

Turley has also led the firm through the fallout from former client Lehman Brothers collapse, which has been a testing time for the global firm.

Turley has led the firm’s engagement with many stakeholders as part of its commitment to enhancing the public’s trust in professional services firms and in the quality of financial reporting.

Turley has encouraged dialogue with key stakeholders across the globe regarding the many changes facing the world capital markets, including the Sarbanes-Oxley Act in the US, the introduction of IFRS and the overall movement toward greater convergence of global auditing standards and global governance.

Turley is also a member of the International Integrated Reporting Committee.

For 11-20 group see: Top 30: Influencing the profession Part 2

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