the world of bdo

8/3/2019 The World of BDO

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BDO International

Enhancing the credibility of our profession has to be a prime objective for any

public accounting organisation. The potential damage to reputation arising from

litigation cannot be understated. In recent years, several high profile court cases

within the accounting arena have highlighted the risks of litigation creep, as well

as the liability attachment from litigation that can affect the firms belonging to

global accounting networks.

BDO, in common with other organisations, has had to adapt to the changing

environment and regulatory requirements. In the interests of transparency, the

following pages outline the naming structure of the world wide BDO International

network, as well as its operational methods and procedures.

The world of BDO


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In 2004 and 2005, IFAC, the European Commission and

the Forum of Firms debated at length the definition of

network and network firm, noting the varied definitions

used throughout the industry. Of overwhelming importance

is the legal and factual distinction between the central

coordinating function, the Member Firms, and the network

as a whole.

At BDO, there are clear directives as to the structures and

terminology relating to the BDO International network,

its Member Firms, and the Global Coordination Office in

Brussels. It is also evident what actions are required of

Member Firms in order to protect the BDO brand and all its

constituent parts.

BDO International is the name used to designate the

world wide network and the name by which the network is

known. There is no legal entity of this name and it delivers no

services. BDO is the brand name for the BDO International

network, and all BDO Member Firms.

All BDO Member Firm client engagements whether for

domestic work, referred work from other firms in the network,

or international work sourced from non-BDO sources - are

signed in the name of the local BDO Member Firm.

All BDO Member Firm names are required to contain the

BDO acronym followed by a local name, unless prohibited

by local laws or regulations.

The network is coordinated by BDO Global Coordination

B.V., incorporated in the Netherlands, with an office in

Brussels, Belgium, where the Global Coordination Office

is located. This structure protects the integrity of the

distinction between Member Firms activities and the

coordination structures of the network.

Its all in a name


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Each Member Firm has

representation on the

Council, which approves

budgets and financial

matters, appoints the

Policy Board and sets the

rules of the Member Firm

Agreement.

The networks

governing structureFunding

Internal collaboration

How does BDO work ?BDO International is a world wide network of public

accounting firms, called BDO Member Firms, serving

international clients. Each BDO Member Firm is an

independent legal entity in its own country.

BDO Global Coordination B.V., managed by the Executive,

is tasked with coordinating the affairs of the network. BDO

Global Coordination B.V. does not provide any professional

services: this is the sole preserve of the BDO Member

Firms.

The cost of coordinating the network is funded by the BDO

Member Firms. The cost recovery is budget-, not profit-

based, and financed by a formula related to the size and

network performance of the individual firms.

BDOs guiding principle of internal collaboration is upheld

by a common methodology and unified service delivery. The

networks services and activities are guided by international

committees, which set the framework for quality control

throughout the network, and the implementation of all new

standards directives.

BDO Member Firms are committed to effective knowledge

sharing, and the international committees and intranet

communities, as well as client extranets, aim to keep all

personnel ahead of industry developments in order to give

clients the best possible trans-national advice.

The Policy Board is elected by the Council from the networks

largest firms and sets policies and priorities for the network

and BDO Member Firms. The Council of Regions is made up

of Senior Partners from the regions.

Together, they lead BDOs strategic approach and uphold

the networks commitment to quality and innovation.


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BDO Compass 3, for example, is software that assists in

planning and carrying out audits in accordance with the

principles of the BDO Audit Manual. It has been written

by BDO exclusively for the use of partners and staff of

BDO Member Firms. The software, templates and training

courses are designed by the International Accounting &

Auditing Steering Committee, with all related tools being

downloadable from its community on the global intranet.

The International Tax Steering Committee develops best

practice and expert service capabilities via its centres of

excellence, including transfer pricing, expatriate and private

client services, value added tax and tax planning.

The International Specialist Advisory Services Committee

groups all activities in the areas of corporate finance,

business consulting, business recovery and forensic

services.

Similarly, the International Risk Management Committee

promotes awareness of the utmost importance of risk

management within BDO Member Firms. Its online

community includes a Regulatory Affairs section detailing,

amongst other issues, recent regulatory alerts.

In recent years, the International Marketing Committee

has been involved in the development of the international

brand strategy, and is now concentrating on the delivery of

international marketing initiatives and branding tools to

raise the profile of BDO Member Firms, and in particular of

their trans-national capabilities.

The International Training & Human Resources Committee

is primarily active in designing training courses and

seminars, organising conferences globally for partners, and

regionally or locally for managers and employees. It also

promotes and monitors all international secondments.

This culture of internal partnering enables BDO partners

and staff to give the best possible advice to clients trans-

nationally, and ensures the mutual success of both their

clients and of the network.

BDO International is also represented on a large number

of inter-firm committees and working groups, including the

Global Public Policy Committee (GPPC), the Regulatory and

Standards Working Groups, the PCAOB Working Group, the

Forum of Firms and the Transnational Auditing Committee,

as well as several Large Firms IFRS sub-groups.


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Membership of the network confers certain rights on BDO

Member Firms, as well as certain obligations. Rights include

the use of the BDO brand, including the network name

and logo, the ability to refer work to and from other BDO

Member Firms and a wide range of resources (manuals,

software).

Obligations include the capability to offer the minimum

core services, including accounting and auditing, taxation

and specialist advisory services, and a high standard of

professionalism and ethics.

All BDO Member Firms are required to adhere, at a minimum,

to the ethical requirements of the International Federation

of Accountants (IFAC) Code of Ethics for Professional

Accountants, and to have a clear understanding of the

critical importance of maintaining auditor independence

on a global basis. BDO Member Firms are also bound by

their national ethical guidelines, some of which may differ

from, or go further than, the IFAC rules. All are aware of

the need to be attentive to the independence rules of other

BDO Member Firm countries, and an online database of

national guidance on the global intranet provides up to

date information.

BDO Member Firms

Member Firmrights & obligations

Independence

Quality assurance An active Compliance Monitor and Quality Assurance

Review Programme encourage all BDO Member Firms to

use their best efforts to comply with the quality criteria

adopted by the network. Furthermore, each Member Firm

is required from time to time to submit to a review of its

local and referred professional work, and of its structure

and governance.

The BDO Quality Assurance Review Programme promotes

the minimum quality standards applicable throughout

the network and develops tools for BDO Member Firm

assessments, which are performed on a cyclical basis.

In any one territory, the competition to join the BDO

International network ensures high standards. Considerable

importance is placed on the value of origins, and BDO

Member Firms are expected to focus continually on

expanding local knowledge. Amongst other criteria, entities

joining BDO must demonstrate local distinctiveness and

expertise, as well as a proven reputation with domestic

professional bodies and representation in appropriate

commercial, financial and industrial centres locally.

Candidates must also agree to BDOs common methodology

and quality control directives. Other joining criteria range

from proper licensing by the regulatory bodies, succession

security to ensure the continuity of the firm at partner level

and maintaining BDOs mandated professional standards

in each practice area, to presenting a professional image

to the marketplace which is in keeping with the strategic

goals, vision and culture of BDO International.

Who can join ?


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BDO International is a network of independent, locally

distinctive firms with global capabilities, serving both local

clients and those with trans-national operations.

Wherever you are in the world, BDO is close to your

business. Using a deep understanding of clients local

business needs, the networks objective is to remain the

expert in every market.

Clients work with individual BDO Member Firms, who will

sign engagement letters and reports in their own name.

When operating trans-nationally, the clients of a BDO

Member Firm are served by distinct Member Firms in other

countries, under the coordination of both the referring and

receiving International Liaison Partners.

If practical and economically justifiable, a client extranet

will be set up for the day to day coordination and running

of the assignment, and for liaison between the network and

the client in foreign locations. BDOs global intranet is used

for internal communications.

In this way the BDO network promotes the use of common

methods and consistent service delivery world wide, while

advancing compliance with national regulations and legal

requirements, in proximity with the clients business, and

in the local language.

Our beliefs drive our actions, and in every sphere of activity,

in every BDO Member Firm, it is evident that openness,

responsibility and standards matter.

the world of bdo

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