CNBC-TV18’s Ronojoy Banerjee caught up with William Thomas, Global Chairman of KPMG and discussed the outlook for Indian economy at a time when growth concerns persist and the country is still recovering from the twin shocks of demonetisation and goods and services tax (GST) rollout.
CNBC-TV18’s Ronojoy Banerjee caught up with William Thomas, Global Chairman of KPMG and discussed the outlook for Indian economy at a time when growth concerns persist and the country is still recovering from the twin shocks of demonetisation and goods and services tax (GST) rollout.
I think and certainly the clients that I talk to are very bullish on India and where it is at and where it is headed, he said.
People want to do business here and historically it has been challenging. The easier it gets, the more interest that there will be, he added.
Audit business is based on trust and transparency. There is no doubt that over the past several years, there has been a decline trust in business and I think it is incumbent and important for business leaders of any business to stand up and articulate a desire and a need for us to rebuild and re-strengthen trust from our constituents, said Thomas.
According to him, when audit firms flout rules, it hurts the entire industry.
Below is the verbatim transcript of the interview.
Q: Since you have the bird’s eye view now at the position of the chairman of KPMG International and since you have been coming to India quite sometime, you are coming at a time when there are these mixed views on the Indian economy. On one hand, growth has been slipping and many are fearing that perhaps this growth is going to continue in the coming quarters as well but there is another school of thought which believes that the disruptions primarily in the form of demonetisation and the goods and services tax is perhaps behind us, so which sort of side or school of thought do you ascribe to?
A: I am certainly in the latter camp and that is not to underestimate the impact of rolling out significant reforms and it does take effort, it does take time so you do feel some disruption as you described but I think and certainly the clients that I talk to – they are very bullish on India and where it is at and where it is headed. So I am certainly in the latter camp.
Q: You preempted my question because you are meeting so many global CEOs and you meet them on a regular basis, how do they see India, are there certain sectors that you feel perhaps look more hot than the rest?
A: I think that certainly what they see is opportunity. You think about certainly as a scale, you think about education, you think about some of the reforms, ease of doing business, the reforms that are being undertaken, they have had a dramatic effect on people’s interest in investing here. You see foreign direct investment (FDI) at an all-time high, that I think is a by-product of the positive business climate and the interest that people had in these reforms. People want to do business here and historically it has been challenging. The easier it gets, the more interest there will be.
Q: As you sit here especially in your new role, many feel that public trust in businesses in general around the world is going down, have you weighed-in on this, do you have an opinion on this, is there any idea why is this happening and how do businesses regain that trust back?
A: I feel very passionate about this issue. We come from the business – audit business, the corner stone of our business is trust and integrity. The audit business itself – the trust that the capital markets and the society in general have in auditors is first and foremost and from a business perspective for us, that has to be at the top of every agenda that we set.
There is no doubt that over the past several years, there has been a decline – trust in business and I think it is incumbent and important for business leaders of any business – certainly in audit business – to stand up and articulate a desire and a need for us to rebuild and re-strengthen trust from our constituents and not just our clients – when I talk about our constituents, I mean our clients, our regulators, the market place, broader society.
Q: Do you also fear that when one company is a sort of found flouting the rules, the others also have to suffer and I ask you that question because in India there have been instances of accounting fraud where some of the big accounting companies have also been involved, in fact one of your competitors is now in the news because of this. Does that also in a sense sully the very image of big auditors including KPMG?
A: There is no doubt that when issues take place, it doesn’t matter, who is involved in it, it impacts all of us. So as a profession, business as a whole, we all have an important responsibility to build and restore trust the way I described and when we fall short, we have to deal with it, learn and do better the next time.
