An Interview with Albert Hsueh and James Tsai

A special report from Accounting Research Monthly (Issue 249, published on August 3, 2006), the most authoritative accounting magazine in Taiwan, reporting on an interview with Albert Hsueh, TSP of PwC Taiwan, and James Tsai, CEO of PwC Taiwan.

Albert Hsueh and James Tsai formally became PricewaterhouseCoopers' Territory Senior Partner and Chief Executive, respectively, on July 1, 2006. They recently agreed to talk about their plans for the Taiwan firm – about how they intend to maintain the firm's heritage while opening up the future, and about their plan of action for taking PwC to new heights.

At a recent partners' meeting soon after assuming his new post, Hsueh said, he laid out the direction of PwC's endeavors for the next three years. Broadly speaking, the plan is for the firm to realize its vision of "professionalism with integrity", being the "best employer" and having "superior clientele" by leveraging its global network and culture of excellence, exploiting the positive dynamic between quality and growth, developing its people as the foundation of the firm's success, and properly fulfilling social responsibilities.

Worldwide Professional Talent ‧ World-class Services

Bringing "professionalism with integrity" to its fullest expression requires making the most out of the firm's primary asset – its professional talent. James Tsai said that the emphasis will be on independence, quality, and risk management concepts and their importance, as well as the demands of the firm's code of conduct, starting with the orientation training that all new employees receive. Then a variety of training courses will be offered both at home and abroad which, besides accounting, include courses on management, languages, etc., all intended to boost professional capacity and allow PwC to provide clients better services.

PwC's current annual expenditure of person-hours devoted to continuing education would be worth about NT$500 million if they were billable hours, or one-sixth of annual revenue. And reflecting the trend towards internationalization and the demands it imposes, PwC plans to maintain its present course towards more demanding foreign language requirements and more language training. This will be complimented with increased opportunities for exchanges with member firms in other countries. (PwC currently has ten colleagues on exchange assignments in four countries.) Such exchanges do more than help the assignee polish language skills; they also provide opportunities to gain practical professional experience in an multinational context. Mr. Tsai says that he hopes to have 30 people posted and working overseas before long.

Continuous Learning ‧ Pursuit of Excellence

At PwC, continuous improvement is no mere slogan. If the partners are going to demand that employees ceaselessly improve their skill set, however, it helps to apply the demand to themselves first. In fact, almost 40% of PwC partners have earned Master's degrees, the great majority of which were earned on the job by devoting part of their time to attend classes in EMBA programs. There are even some like James Tsai himself who, after getting a Master's in accounting, worked for years before pursuing a law degree and becoming a dual degree holder.

In terms of alma maters, those most represented at PwC are Chenghi, Taiwan, and Soochow Universities, with 18%, 13% and 9.8%, respectively. If recent ratios hold, then of the 480 estimated to be hired this year up to September, some 195 people would be from one of those three schools. Besides hiring recent graduates from top schools in Taiwan, however, PwC intends to aggressively recruit high-caliber talent with degrees from overseas universities and significant work experience.

There are not great differences at present between the Big Four audit firms in Taiwan in terms of how they treat their people, and the work performed and job pressures are similar, so why do so many graduates choose to join PwC? What is the attraction?

Be People-Focused ‧ Give Back to Society

"This is all about thanking the public for its trust in PwC," says Albert Hsueh without hesitation. In fact, besides focusing on its mission of serving clients, the people at PwC do donate a lot of time and effort to fulfilling their "social responsibilities". This often involves sharing practical knowledge about accounting by teaching classes and giving lectures to students at area schools. Teaching just one three-hour class eats up a whole morning or afternoon, while the pay is paltry compared to client fees for the same amount of time, and of course teaching students is no way to find new clients. Still, the classroom can be seen as the basic talent incubator for the accounting profession, and the source of future accountants for firms like PwC, so investing resources in teaching and interacting with students has its rewards.

The firm also gives considerable encouragement to participation in government and non-profit organizations. Leading by example, Hsueh is a member of the National CPA Association's Audit Evaluation Committee, and James Tsai is a member of the Accounting Research and Development Foundation.

According to Hsueh and Tsai, one area where PwC differs from its peers in the industry is the consistency of its culture and values, and its succession system. They say that, in its 36 years in Taiwan, PwC has never had a merger, so its culture and values have been quite consistent. This has made it easier to get more out of the business integration and management functions, and communication up and down the organization is smoother. It also contributes to loyalty and consensus within the firm, and makes policy implementation more effective. The channel for lodging complaints or whistle blowing is particularly smooth and effective, and employees can even get their bosses' performance assessment downgraded after their performance has been evaluated. Complaints do not have to go through barrier after barrier: They are sent directly to the global parent firm. The result is that one's qualifications and performance are what matter, not how high your position is. Employees feel pressure from their work, but not from other, unwelcome directions. Under such conditions, people in the firm naturally tend to be on friendlier terms.

Quality Controls Risk ‧ Health Spurs Growth

For the last three years, PwC has been in an arduous campaign to strengthening risk management and improve quality. "For us," says Hsueh, "managing risk comes down to a lot of hard work: You can't count on being lucky." In particular, PwC recently established a Quality Management System (QMS) to meet the requirements of the International Standards of Quality Control (ISQC 1). Its QMS is similar to internal control systems at public corporations, in that it strengthens and controls the quality of information contained in the various kinds of reporting the firm does. At the same time, they also set up a Chief Quality Officer (CQO) position. Similar to a chief auditor at a typical public corporation, the CQO provides continuous oversight and auditing of the firm's assurance department, checking to see that its work is done according to mandated protocols, and that internal control requirements are met.

In the future, strenuous efforts will also be directed at independence requirements. Independence is an important factor behind PricewaterhouseCoopers' ability to win the public's trust, and the PwC's global HQ has in place a set of internal independence rules that must be followed by each member firm in the worldwide alliance. Where local regulations are stricter, the local PwC firm will follow those regulations instead of its own internal standards.

On PwC Taiwan's future development, Hsueh stressed that, being a professional services organization, PwC should "emphasize value, not price" and "emphasize influence as opposed to size", with the value of services as the first priority, and build respect for the firm's professional opinions among government, academia and the society in general. The firm's scale is of secondary importance when it comes to earning the public's trust, or to allowing PwC to continue to be the best, the hardest working, and the most trustworthy firm.

Hsueh added, however, that what is good for PwC must be built on what is good for all of Taiwan, on what is good for the accounting profession in particular, and not on something bad at other firms. When something bad happens involving any accounting firm, the public loses some of its faith, not just in one accountant or one firm, but in the profession as a whole.

Total Perfection ‧ 100% Satisfaction

Regarding the challenges the firm will face in the future, Hsueh mentioned two – internationalization and determination (in the pursuit of excellence, that is). These are, he said, not just challenges that PwC must face; they are challenges for the whole of Taiwan. In the past, the pace with which Taiwan "internationalized" (by, for example adopting international standards in business) was not as fast as it was in Singapore or Hong Kong, among other places. In recent years, even Mainland China's rate of internationalization has surpassed Taiwan's. In one form or another, internationalization is an urgent matter for accounting firms, for individuals and for corporations. Whether it is in PwC Taiwan's cooperation with its international parent, or in the continued development of Taiwan, any lack of awareness or effort when it comes to international harmonization will translate into a decline in competitive strength.

According to Hsueh, as society evolves and people's values change, you find fewer young people with a real determination to "pursue excellence". When a young generation destined to be the backbone of society loses its dreams for the future and its willingness to work hard for it, the future of that society and its economy is imperiled. Hsueh stressed that professional management has room to develop fully only when overall conditions are favorable.

At PwC, keeping the firm's brand shining brightly is everyone's responsibility. Tsai spoke of the demands people make of themselves: "Doing the right thing right is the path we're on!" Tsai has taken on the responsibility for managing risk and quality, so he insists that they will demand perfection and "one hundred percent client satisfaction". To meet such expectations will require the cooperation and diligence of every colleague in the firm. This is why he hopes to further strengthen communication methods and channels, and realize the vision of becoming the best employer in the industry. Hsueh adds that the firm is for all of the colleagues in it: "That means, even a new person who came on board yesterday - the firm is his or hers as well!"

Asked about his expectations for the future, Hsueh said, "James and I were certainly not thrown into our current positions through an election." Rather, it was through a deliberate succession process. As he considers his fitness for the work ahead, Hsueh says, [becoming the head of the firm] is about succession, and that is a big responsibility, but as one of his favorite sayings goes, "Bend your head to pull the cart; raise your head to see the road." And he often thinks about that day, some day, after he leaves the firm: "What will others see when they look back?" What contribution was made to the firm? This is what will keep him on his toes.