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April 30, 2008

UHY International extends reach into developing economies

By Nicholas Moody

Burgeoning emerging markets continue to provide new members for UHY International. The global network recently added new firms in the Ukraine, Brazil, Nigeria and the Caribbean.

UHY has admitted two new firms in the Ukraine, bending the rules on its usual restriction of one member firm in each country. Both three-partner firm Audit Group Prostir and five-partner firm EBS have joined the network to extend their international client bases.

Kiev-based Audit Group Prostir has 19 professionals and specialises in construction, oil and gas production, marketing, research and consultancy, and automotive industries.

EBS has 80 staff in two offices and has grown at about 40 percent for the past three years. EBS managing partner Helen Volska said last year the firm experienced even greater growth of 85 percent, which lifted its fee income to $2.4 million.

The firm is primarily based in Kiev with a small office in Moscow. Volska said accounting and management consulting represented about 70 percent of its work. Tax work, IFRS compliance and legal support contributed to the rest of the firm’s revenue.

Outsourcing leader

EBS claims to be the leader in accounting outsourcing in the Ukraine and has a strong international client base, including Nokia and IBM. About 70 percent of its clients are from overseas and the firm hopes that having international links within UHY will give it an edge when competing for work.

“We are not an international firm but I think we bring a lot of international expertise and best practice and we have a very good reputation locally but [previously] we were lacking a bigger name behind us,” said Volska.

She said the market in the Ukraine presents a lot of opportunities but personnel remains a challenge. “I think the market is growing. As long as the financial market for Ukrainian companies is open and as long the Ukraine will increase its rating for foreign investors, the market will grow here. There is a huge demand for qualified personnel, the rates are quite high, the quality is not very good and there is huge competition for financial people,” she added.

With many businesses choosing to establish operations in Eastern Europe, the Ukraine is a country with enormous growth potential for international business.

Brazil remains one of the key emerging markets despite slipping to fifth in the latest Grant Thornton IBR emerging markets index behind mainland China, India, Russia and Mexico. Moreira & Associados is a four-partner firm with 85 staff and offices in Brasília, Curitiba, Porto Alegre, Rio de Janeiro and São Paulo. It is currently changing its name to become UHY Moreira Auditores.

The firm’s strongest services lines are audit and IT services but it also specialises in accounting, evaluations of companies, consulting and tax. In 2007, Moreira & Associados had fee income of $1.88 million and hopes to break the $2 million mark by the end of 2008.

The firm has joined UHY International following 20 years with Polaris International. “We saw that [Polaris] was not helping us to grow globally and to be in the same umbrella [as] UHY would give us an advantage to compete for international clients against PricewaterhouseCoopers and KPMG,” says Diego Moreira, managing partner at Moreira & Associados.

Moreira claimed his firm was among the top 12 in Brazil, a market that is dominated by the Big Four, Grant Thornton and BDO International.

IFRS challenge

Moreira anticipates the full implementation of IFRS in Brazil by 2010 will be a big challenge but sees the added expertise of UHY’s network in Europe and internationally as another benefit of membership.

Moreira & Associados’ business has limited international clients, mainly from the US and Germany. Moreira said most of the firm’s clients are mid-sized Brazilian firms although UHY membership provides the scope to secure work in Argentina, Uruguay and the US.

Nigerian firm Maaji & Co is a three-partner entity with eight offices and 68 staff. The firm specialises in serving the manufacturing, import and export, banking and finance, oil and gas, and agriculture sectors.

HTR Group Del Valle & Neives is the first member firm to join UHY International from the Caribbean. Based in San Juan, this two-partner firm has 28 professional staff. Audit and tax assignments make up about 90 percent of turnover.

Nicholas Moody

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