The FINANCIAL — Grant Thornton targets dynamic organisations that want to grow, that are going through change and that need its help.
“Dynamic organisations vary in size and industry sector but they show some or all of the following characteristics: they are growing or have the potential to grow, they have an international capability or plans for cross border expansion, they have the ability to adapt to different market conditions, they are dealing with complex events or transactions such as raising capital for mergers and acquisitions, restructuring or tax planning, they are open to and value integrated service solutions. To put it in other words, we focus on helping dynamic organizations navigate the complexity in their business operations,” Nelson Petrosyan, the Director and Partner of Grant Thornton LLC, told The FINANCIAL.
According to Mr. Petrosyan, in order to maintain this market and service focus they unite the right people who can offer the right service to the right organisations. “That is why at Grant Thornton we create an environment that attracts, retains and inspires the best people – people who want to make a difference every day,” he said.
Grant Thornton is one of the world's leading organizations of independent assurance, tax and advisory firms. Over 31,000 people in 500 offices across 100 countries are focused on making a difference to clients, colleagues and the communities in which they live and work.
Grant Thornton has being working in the Georgian market since 2001. In 2005 company established Grant Thornton Georgia and in 2010 it became a full-fledged firm staffed with professionals having in-depth local expertise and profound international experience.
In an exclusive interview with The FINANCIAL, Nelson Petrosyan, the Director and Partner of Grant Thornton LLC, talked about the mission and values of the company and shared the lessons that financial crisis has taught markets.
Q. What is your mission and what are your values?
A. Everyone at Grant Thornton shares 6 global values which we call CLEARR – Collaboration, Leadership, Excellence, Agility, Respect and Responsibility. These values are the foundation for the way we behave towards our clients, our colleagues and our communities.
Q. As we know, it is already a couple of years since the European Commission launched large-scale discussions on the policy changes related to the audit industry – the so-called Green Paper. These discussions were aimed at focusing on the lessons learnt from the losses incurred due to the global financial crisis. At what stage are these discussions today and what is Grant Thornton’s standpoint on the Green Paper?
A. Grant Thornton welcomes the Green Paper. I think it’s good to look at not just the auditing profession on the audit market but all the stakeholders which are involved in financial reporting, in capital markets, in regulation. So we welcome the debate, we take a fresh look in terms of the positions which are in the Green Paper, we welcome stronger dialogue and communication between the auditor and all other stakeholders, particularly, between the auditor and shareholder, for example. This way the auditor can answer questions of the shareholders and improve communication between auditors and the audit committee of the audited entity, and certainly improve communication between auditors and regulators.
Another area that needs to be changed is restrictive governance where we have certain shareholder requirements or loan arrangements which require that only the largest accounting firms to be the auditors of the entities which have received the loan.
Q. In your practice, have you come across such situations in Georgia?
A. I have to admit, unfortunately, yes. Often times in the banking sector. Management and shareholders may tell you about ‘requirements’ for audits by large firms. Curiously, sometimes clients find it difficult to tell apart the large firms that they ‘require’.
Obviously, the market forgoes the opportunity to benefit from the value for money that the mid-sized audit and advisory firms offer. For example, in the post-soviet regions, Grant Thornton has extensive experience of auditing financial institutions – over 20 commercial banks, 2 national banks, large number of insurance companies and micro-finance organizations. And this is not even taking into account our operations in the Russian market.
Q. One of the markets where Grant Thornton expected to see significant growth was the post-soviet region. Although, for many foreign investors this region still remains politically unstable. Could you underline the main factors which make you remain optimistic towards the post soviet region?
A. You are right that political stability and democratic processes are important factors affecting investor confidence and business optimism. I would make a general comment about the post-soviet region and then will be more specific about Georgia.
Post-soviet economies are still emerging markets and, often times, investors seek opportunities which may not be available in more developed economies with saturated markets.
When we talk about Georgia, I think a key factor attracting foreign investment is the overall direction of the government policy on economic development, monetary and fiscal policies. I don’t want to sound naïve and say that everything is perfect and flawless. There is certainly room for improvements, especially at the level of policy implementation, where further progress and clarity may be achieved in commercial, tax and customs legislation.
I am optimistic about this progress in Georgia because of the ongoing constructive dialogue between public and private sectors, where business associations and chambers of the commerce raise their viewpoints and propose improvements. Legislative changes need to be balanced and rational. I understand that in an emerging economy such as Georgia legislative acts are living documents, sort of like a work-in-progress, which undergo continuous improvements. However, on the other hand, too frequent changes in legislation may also make future investment decisions difficult.
Q. In your opinion what procedures should guide businesses in today’s conditions in order for them to operate properly? What should businesses consider while preparing financial information?
A. There are two lessons learned from the financial crisis. The information being made available by reporting entities is not necessarily meeting investor expectations. Investors are seeking more transparency among the business model observing the risks and opportunities as well. The big question is to what extent the auditor can provide the same level of assurance for the kind of information we can give in financial statements. So it’s about financial reporting which investors are looking at. Financial statements are mostly looking backwards and capturing the conditions as they are as of the balance sheet date but the decision making is based on future expectations – where the business is going in the future.
The second thing is: measurements. We have a lot of volatility when it comes to pure fair value measurements applied in financial statements.
Q. What makes Grant Thornton different from other companies?
A. I think Grant Thornton is different in the way we provide professional services and meaningful, actionable advice in the areas of assurance, tax and advisory. First of all, these services are delivered through approachable partners, supported by proactive teams with genuine interest in the client. Secondly, we use business discussions to offer acumen and instinct to solve complex client situations. In other words, we bring clarity and insights to client issues.
Grant Thornton people are agile and responsive to changing situations. Respectful, responsible and collaborative, we focus on what matters most to our clients, our colleagues and our communities.
Let me try to put all this into more plainer words. Our professional standards and ethical rules may prohibit us from doing certain things or performing certain services, but they can never restrict us from thinking about our clients. If there is one thing we do not compromise on, it’s our service quality. Quality is not negotiable. We are not about doing a ‘not bad’ job, we are about doing a great job. All this could be summarized into Grant Thornton’s brand promise.
Q. So now, according to you, what is Grant Thornton’s brand promise?
A. Let me take a step back and then I will come to this. All People make decisions for both rational and emotional reasons, don’t they? These are two factors that affect many of our decisions. Often times these two factors go side by side and are intertwined. An instinct for growth is our way of recognizing the legitimate role of both rational and emotional factors in business decisions. So “Instinct for growth” is our brand promise. We do our work to help dynamic organisations unlock their potential for growth.