Without giving anything away, can you describe the setup at Ernst & Young Romania, in so far as numbers of staff and what they do? How does that compare with Poland, from whence you have come?
I've no hesitation to share with you and the readers of Vivid how we are doing. We are just in the process of recruiting a large group of university graduates and as of 1 September our total headcount will be around 275. Most of them are working in the Audit and Assurance Department. We have over 30 professionals working in our Tax Department and over 20 in our associated law firm, David and Associates. Some 12 staff are working in our Transaction Advisory Department. In Poland, Ernst & Young is bigger with a total headcount of more than 900. Also the proportions are different. When I compare the two practices I would say that relatively speaking, we will grow faster in Tax, Legal and Transaction Advisory Services than in Audit and Assurance.

In an interview with Business Review you considered that barring any dramatic event occurring in the global economy, Romania's EU accession would take place on the set date. Some commentators believe that there is a great danger that the EU will accept Romania before vitally important reform of, for instance, the judiciary and corruption takes place. What do you say?
I recognise the concern and it is a valid one. Again referring to my Polish experience however, similar concerns were raised there and it was shown that things can change and be adjusted quickly when the right pressure is put from outside and from inside. I am sure that the outside pressure from the EU will stay strong and until the final moment. The challenge for the Romanian politicians and authorities is of course to benefit from the momentum and follow the road to implement the required reforms in the fields mentioned and in many others. And that will be a big challenge since the elections in some of the recently joined member states have shown that the voters did not really reward the ruling governments for the accession. Bringing the country to the EU does not necessarily pay the political dividend. Please note also that in some of the older member states corruption problems are obstinate unfortunately.

The Sarbanes-Oxley legislation, which basically says that your tax and/or legal adviser cannot be your auditor as well, has had a major impact on consulting firms. How has it, and other legislation like it, affected Ernst & Young?
You are pretty well informed, but the Sarbanes-Oxley rules are a bit more sophisticated. First of all be aware that a professional services firm such as Ernst & Young does not only have to deal with Sox, but also with even more stringent rules in France and other European national rules on corporate governance. On top of that the EU will issue directives that will go in a similar direction. These rules are not created to regulate our profession and industry but they are to restore public trust in the corporate world for shareholders and all other stakeholders: banks, employees, tax authorities, etc. This is good. It is a process Ernst & Young strongly supports. In the slipstream of this vast legislation in all these jurisdictions, audit firms are facing certain restrictions. Yes, we are not allowed to provide certain services that we were allowed to provide in the past. For example, providing legal services to SEC-registered companies and all their subsidiaries and affiliates wherever in the world is now prescribed if you are the auditor of one of those entities. Tax advisory services for SEC audit clients are allowed, provided we follow certain procedures.

These regulations and the increased awareness of corporate governance issues have affected our profession. That is absolutely true. Our world has changed. But I would say for the good. It has in many cases forced us to redefine our relationship with clients and re-establish their expectations and our deliverables. In most countries, and also in Romania we see an increase of demand for audit services. Tax and legal services are of course in high demand but that market shows some shifting.

We are on top of these changes and try to benefit from the movements in the markets, making sure that our clients are in full compliance with the new rules and that Ernst & Young continues to be their business partner for solving problems in all our fields of expertise.

With Sarbanes-Oxley type legislation there is far less scope for false accounting and reporting. How important is it that similar legislation is implemented in Romania ?
It is important that the Romanian authorities and the Romanian business community are aware of the importance of public trust and proper corporate governance. And that should be reflected in domestic legislation. I strongly believe that such legislation can best be developed in close cooperation with or at least after proper consultation with the business world and audit firms. Diligent and transparent reporting of the financial results of Romanian companies, giving a fair view of how these companies are doing is absolutely crucial for the development of the economy in this country. It drills down to the very heart of doing business.

What changes to reporting procedures would you like to see take place here, that would ensure businesses run smoother?
Romanian statutory accounting rules are not fully in line with the International Financial Reporting Standards (IFRS). But changing the Romanian rules and adjusting them fully or more to the IFRS will not mean that things will become simpler. The difference will be in the outcome. Reporting according to IFRS will in most cases deliver more information than reporting according to applicable Romanian rules. Higher quality reporting will ultimately have a positive impact on the way businesses are run. If that requires more effort and input from the accounting department and the auditors, I would say that is worth it.

What about everyday paperwork that the state deems necessary, such as factura fiscalas and chitantas? If I had a dollar for every minute spent waiting to receive a handwritten invoice I could afford to buy my own island.
These specific examples are probably some leftovers from the communist legacy and they will disappear I am sure. Having said that, we have to appreciate that there is no economic, administrative and tax system that can operate without elements of control. And your factura fiscalas is one of those elements that help to sustain a fair system in which every citizen pays his fair amount of taxes and can justify his deductions of allowable expenses. I am pretty sure that the Romanian state, as well as almost every state, can improve efficiency and be more user friendly. The Romanian state could make a difference and improve attractiveness for foreign investors by implementing simplifications and reducing administrative burdens where possible.

How conscious are you of your main competitors, the other Big Four consultants? Is it so important to be the biggest in town?
We operate in the same market and we need to work closely together to further develop the profession in Romania of excellent certified auditors, tax and legal advisors. Our firms offer fantastic job and career opportunities for young and bright Romanians. We know our colleagues from the other firms and jointly we need to be aware of the reputation risk we all run if we do not work according to the high standards the market and the regulators have set.

And, yes we are also competitors in an economic sense. From my perspective as the managing partner of Ernst & Young here it is important to be the biggest in quality and service delivery and to have the best reputation as a result of that. Size matters ultimately but it is not the most important. Rod Grant, my predecessor left me a practice to lead with all the good elements to be a leader in the field.