CEO and current Chairman of Morison Menon Chartered Accountants firm recounts to Joyce Njeri his incredible journey that led to the founding of one of the region’s mid-tier leader in business consultancy…
GROWING UP in a sleepy village deep in the townships of Calicut, Kerala, Raju Menon embraced the early-rising, hardworking life of a diligent boy brought up by strict parents.
Although his parents were much less educated, they instilled excellence in their son, a quality that helped him form the positive habits that would later on be the foundation for his overriding success in school and in life.
“My parents were very loving people. My mother had completed her basic studies and managed to get employment in the government, but my father did menial jobs as he did not have a good education stead,” he says in an exclusive interview with Accountant Middle East.
Early childhood education
Recounting his boyhood and early school days, the Founder and current Chairman of Morison Menon Chartered Accountants firm said his foray into accounting was purely by fluke, as “back then, the sort of career mentor-mentee scheme didn’t exist.”
“I did my schooling at a government school in Calicut, Kerala till tenth grade and then pursued my Bachelors degree in Commerce before completing my Masters from a government college.”
Having hailed from the village in Kerala, Menon decided to undertake his Chartered Accountancy course after he was through with his M.Com, saying that “at the time, I did not have any enough courage to pursue a CA qualification. I was however happy that I was through with my M.Com because it greatly helped to boost my knowledge and confidence when I finally decided to undertake my CA papers,” he narrates.
Afterwards Menon joined a firm in Calicut city in 1985 and cleared his CA in November 1989. However, his passion for academic pursuits did not end there. During this time, while he was doing his CA, he decided to pursue Bachelor of Laws also.
“Of course the LLB has an obvious appeal to anyone wishing to develop a career in the legal profession, but back then, a law degree was seen as an equally attractive option for individuals and employers in spheres of commerce, accounting, finance and other industries in general. So, I was pursuing my LLB alongside the CA course,” he quips.
Acting on good instinct
One of the enormous privileges of a mentoring scheme is the opportunity for someone who has been down a particular path to share some of those experiences with someone who is about to embark on that journey. Unfortunately, Menon did not have this privilege.
“I completed my post-graduation back in 1984 and with no one to mentor me professionally or offer sound career advice, all this coupled with growing up in the village, my foray into Chartered Accountancy was purely through good instincts,” he recalls.
More than 30 years later, Menon’s accounting firm has become a regionally known resource in the Auditing and Business Consulting industry.
Morison Menon Group is an Independent member of Morison International. The network is ranked by the International Accounting Bulletin as the 9th largest accounting association in the world, with over 168 member firms worldwide in 68 countries boasting 1,008 partners, 8,500 staff and 291 offices.
Headquartered in Dubai, the UAE entity started operations in 1994 and provides services in accounting, auditing, business, and financial and management consulting. The Group has other offices in Jebel Ali, Dubai Airport Free Zone, Abu Dhabi, Sharjah and Ras Al Khaimah while overseas operations are in India, Qatar, Bahrain and Oman.
A committed workforce
As Chairman and Managing Partner of the Group, Menon’s daily role at the firm is more of a supervisory and directorial one.
“We have about 18 partners in our GCC-based offices and my job mainly is to see that business is moving fine. On a macro-level I’m tasked with the management and supervision of the entire organisation, but we also have some of our long-time clients who require my hands-on service and my presence at meetings,” he adds.
Menon displays cheerfulness when he speaks about the caliber of staff that currently works at his firm.
“We have the best team any organisation could wish for,” he says with a glee of contentment.
“Qualities of a good employee goes beyond the traditional eight-hour day routine. Every employer dreams to have a workforce which is committed, self–motivated and dares to think in and out of the box and bring such plans into action. These are the qualities our team members demonstrate,” he says.
“Sometimes what separates an exceptional employee from a bunch of good employees is the extra mile he is willing to see the organisational goals are met and thus serving his employer better,” observes Menon.
Importance of CPE
Asked what skills he looks for besides the traditional accounting qualifications, the Chairman was quick to praise the CA qualification administered by the Institute of Chartered Accountants in India (ICAI), saying the certification is one of the best in the market at the moment.
“Let me start by saying that the chartered accountancy of India is one of the most in-depth, well rounded qualification we have in the market at the moment. It is regularly revised and updated to ensure that the learning and knowledge acquired is current and relevant to the prevailing actual market conditions.” he says.
“Similarly, compared to other courses like Chartered Financial Analyst or even an MBA with a specialisation in Finance, which are fairly practical in their approach and assessment, chartered accountancy of India provides for a fair and comprehensive grounding of accounting, finance, tax and consulting.”
“When you want execution of a job with top quality, you need a good chartered accountant to do that; otherwise you’ll have to bear the challenge of supervising your staff all the time. Considering the current challenges faced, even merely possessing a top qualification like CA is not enough. This is where the need for continuing professional education (CPE) programmes assumes great importance.
“It’s fair to say the first part of your mission is well and truly accomplished when you’re through with your academic qualifications. But you can’t afford to bask in academic laurels for too long for you might be left well lagging behind your colleagues who have already progressed to the next level. The same is true for professionals with many years’ experience in the workplace,” he advices.
Changing business landscape
Menon extols the benefits of CPE, saying that “in today’s changing business landscape, the pace of change is probably faster than it’s ever been – and this is a feature of the new norm that we live and work in. Therefore, continuing professional education is important because it ensures you remain competent in your profession. It is an ongoing process which continues throughout a professional’s career.”
As part of developing the accounting profession in the country, Morison Menon Group has also been actively involved in activities at various local universities and colleges in order to ensure that local students are prepared to face the world upon graduation.
“We offer Emirati accounting graduates internship opportunities at our firm to help them raise their competency to be on the same level and playing field with the other foreign accountants,” Menon says.
Speaking about the adoption of new International Financial Reporting Standards (IFRS) in the region, the straight-talking CEO says that while the implementation of IFRS, would help companies to be ‘understood in a global marketplace’, there should be a localisation of standards as ‘one size does not fit all’.
“There is a growing need for convergence in international accounting standards as it comes with the prospect of improved quality of financial reporting, greater mobility of capital at a decreased cost and more efficient allocation of resources. However, while it is commendable to have standardised rules across borders, there are great hurdles to overcome as the IFRS is still being seen largely as an imposition of accounting standards and regulations more suited to the Western world,” he says.
“The UAE is one of the countries to have adopted the IFRS. We cannot have a ‘one size fits all’ standard as the dynamics of business vary from country to country. Even though there are opportunities arising from the adoption of international standards, we need to ensure continuous development of regulatory systems for more specific fields like the SMEs, banks and listed companies,” he urged.
Global financial crisis
The 2008-2010 global financial crises brought the accountancy profession under intense scrutiny and spotlight, following accusations that inaccurate accounting practices were to blame for the disasters. Menon however, vehemently rejects the notion that accountants were to blame for the crisis, but admits “there have been other corporate accounting scandals that have gravely stained the profession.”
“From Enron, WorldCom and Satyam, just to name a few, a growing number of frauds have undermined the integrity of financial reports, contributed to substantial economic losses, and eroded investors’ confidence regarding the usefulness of auditors’ reports and reliability of financial statements,” he bemoans.
“As managers, we have an obligation to continuously protect and uphold the integrity of the profession by condemning these activities and tying all the loose ends to ensure and avoid deliberate falsification of accounting records.”
“There is a need for the accounting industry to ensure that it continuously maintains a strong reputation and the highest standard of professionalism.”
While elucidating how unscrupulous auditors try to ‘massage the numbers’ through deliberate omission of transactions, the Chairman said misapplication of financial reporting standards is mostly carried out with the intention of presenting the financial statements with a particular bias, “in order to improve any analysis of liquidity.”
“There have been a number of cases that have gone unreported where major public companies have experienced financial reporting fraud, resulting in turmoil in the capital markets, a loss of shareholder value, and, in some cases, the bankruptcy of the company itself.”
“World-over, governments have been forced to impose stiff penalties, exemplary punishments, enforcement of new laws and policies. While this has all been done with the right spirit, as managers we have the obligation to ensure a continuity of sustained internal control, the analysis of the financial situations’ safety, the efficiency and efficacy of operations, of the conformity with the legislation and regulations in use.”
“We need to tie all the loose ends in order for companies to win back stakeholder’s trust, as well as bring back public confidence in the capital markets,” he adds.
Proper regulatory body
Here in the Middle East, most top listed companies are audited by the ‘Big 4’ accountancy firms. Menon however says that this does not pose a threat to existing mid-tier firms and other new independent financial consultancies entering the market.
“It is true that most listed companies in the region are audited by the larger accounting firms. This pales in comparison with the other markets in the world where mid-tier firms are rated equally as good. Mid–tier firms do not feel stymied by the much larger and better resourced rivals, as they are presented with the same opportunities as their giant counterparts and have to compete for clients on equal terms.”
According to Menon, the reason why most top listed companies are audited by the ‘Big 4’is because there is no proper accounting regulatory body in the UAE to control the profession, and therefore clients and users of financial statements tend to place more trust on the large firms.
“In India you have ICAI (Institute of Chartered Accountants of India), in the UK there is ICAEW (Institute of Chartered Accountants in England and Wales), in South Africa there’s SAICA (South Africa Institute of Chartered Accountants) and in the US there are various regulatory bodies. I’m aware there have been efforts to form a local body to regulate the profession, but until that is done, the mid-tier firms unfortunately will continue to be viewed as second best,” he says.
“But one thing I must add however, is that because of the rapid growth in the region in areas like oil and gas, telecoms and financial services, we have noticed a big shift happening in favour of mid-tier firms, as the ‘Big 4s’ have been swamped with work and in that case, we have benefitted a lot as most work is passed down,” he adds.
The credit crunch of 2008-2010 and debt crises have introduced the world to a new order of magnitude in financials. Businesses have been forced to establish new models to cope and stay liquid and competitive. According to Menon’s assessment, the most common challenge financial consulting businesses are facing in today’s competitive marketplace is that of relentless change in financial markets, regulation, and implementation of these laws as required by authorities. He says emerging economies, if they wish to gain credence in global capital markets, ‘need to adopt new accounting technologies.’
“Following the financial crisis, there has been increased need to diffuse audit practices. Other factors that are fueling this convergence include formation of common currency and economic blocks, like the EU (European Union), ASEAN (Association of South East Asian Nations), SADEC (Southern African Development Community), and the OECD (Organisation for Economic Co-operation and Development) among others.
Multinational corporations have also contributed to this phenomenon, as western governments rely on particular accounting blueprint for the regulation of enterprises. These cross-border companies view the adoption of IFRS will save them the expense of preparing more than one set of accounts for different national jurisdictions. Adopting these acceptable Western-centric standards like the IFRS provides corporations, common economic blocks and developing nations with more legitimacy.”
Many multinational business entities have a major presence in the UAE, as the country continues to develop economic sectors as diverse as aviation, tourism, logistics, trade, health, education, technology, and media among others. Due to this, the Morison Menon Group recently published its fifth edition of paperback titled ‘Doing Business in Dubai’ and ‘Doing Business in Abu Dhabi’, which gives potential investors guidelines on setting up enterprises in the Emirates.
While launching the book, His Highness Sheikh Ahmed Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, Chairman and CEO of the Emirates Airline and Group and Chairman of Dubai Supreme Fiscal Committee, said; “The popularity of Dubai as the region’s best and the world’s emerging global business hub has empowered the Emirate to create unique economic opportunities and value propositions that attract the best of global entrepreneurial and business leadership. Dubai government’s strong commitment to free market economy, fair competition and economic diversification are unparalleled in the region and compare with the best globally.”
‘Doing Business in Abu Dhabi’ 2013 edition was launched by His Excellency Nasser Ahmed Alsowaidi, Chairman of Abu Dhabi Department of Economic Development at the Abu Dhabi Department of Economic Development Office in February this year.
Menon, who was particularly instrumental in the publication of the paperback, said that the fifth edition of the ‘Doing Business in Dubai’ book serves as an ideal tool for global investors for setting up businesses in Dubai and to attract Foreign Direct Investment to Dubai. The book also gives a comprehensive list and features and opportunities in all the Free Zones in Dubai.