Smaller is big advantage for accountants

The woes of accounting giants are music to the ears of Anthuan Xavier. He tells Siobhán Creaton that smaller firms with close relationships with their clients are benefiting

Anthuan Xavier prides himself on going against the grain. At a time when the world's largest accountancy firms are reeling from massive corporate scandals and struggling to restore public confidence in their profession he is actively seeking the limelight.

The 49-year-old founder and managing partner of BDO Simpson Xavier, the Republic's fifth biggest accountancy practice, is proud to show off the firm's new Dublin offices and talk about his business. He says he has already found the "silver lining" beneath the dark clouds overshadowing accountants the world over. "I am naturally optimistic," he explains.

This week the firm he established with his friend David Simpson 20 years ago moved into four of the five floors at a new luxurious office development just behind St Stephen's Green in Dublin. It will be home to more than 300 staff and there is some room to recruit additional staff that Mr Xavier is confident will be required in the future.

"In the early years we were growing at a rapid rate. We doubled our turnover every two to three years and still aim to sustain that growth rate in the years ahead," he says.

BDO Simpson Xavier employs another 200 people at offices in Limerick, Belfast and Cork. Last year it earned fees of €45 million for providing advice to medium-sized companies on how best to manage their tax affairs and helping entrepreneurs to realise their wealth.

Mr Xavier suggests that it is somewhat misleading to describe the firm as the fifth biggest after international giants PricewaterhouseCoopers, KPMG, Deloitte & Touche and Ernst & Young. "Our focus and ethos is completely different."

Where the big four tend to work with large semi-state companies, multinational organisations and publicly-quoted companies, BDO Simpson Xavier, chiefly provides services for companies run by their founders.

"Dealing with entrepreneurs is very different to dealing with executives who are running large corporations on behalf of shareholders. Entrepreneurs are very secretive and expect confidentiality to be highly respected. They want you to be a mentor and a business adviser, which is very different to the needs of an executive running a multinational business." He insists the relationship has to be close and personal. Ironically it is the all-too-cosy relationship between auditors and their clients that has been blamed by angry shareholders and employees of companies like Enron and WorldCom for their failure to detect massive fraud.

The reason Mr Xavier can boast about the cosiness of the firm's relationship with its clients as a positive feature of the business rather than something that should arouse suspicion is that most of its clients are the major shareholders in their own businesses.

"We are dealing with their money. There is a phrase that I hear all the time. I'm not sure whether it's an Irish saying but I have come to learn: There is money and then there is my money."

He says this determines a completely different dynamic in terms of how an accountant should interact with an entrepreneur. "They want to see things the way it is. They are not going to be overstating their performance."

His philosophy is simple: You have to be prepared to invest the time to understand and be sensitive to their needs, which he admits can be challenging for an accountant.

"This is something that does not come naturally to accountants. Accountancy tends to be very structured and very disciplined. Entrepreneurs are unstructured, ideas people, so the two groups are culturally poles apart."

Mr Xavier has lived in Dublin for 30 years and considers Ireland to be home. He was born in Malaysia, close to the holiday resort of Penang, and it was through his mother's work as a teacher in the convent school in Taiping that Mr Xavier learned about Ireland.

"As Catholics we were very much in the minority in a society that was predominantly Muslim or Buddhist so the Catholics tended to be very staunch. There was a nun from the school who used to come for dinner on Sunday and tell us about the lakes of Killarney and that 99 per cent of the population was Catholic. So when I wanted to study accountancy my mother believed Ireland was the best place to go."

Aged 19 and having completed his A-levels he arrived in Dublin. He didn't know anybody and found digs in Ranelagh. Within a few weeks he found a more permanent home and eventually persuaded two accountants who had just formed a partnership to allow him to serve an apprenticeship.

He spent five years there and after he qualified moved to what was then Ireland's biggest firm of accountants, Stokes Kennedy Crowley, which is now part of the international KPMG group. He spent a year in Australia but returned to Ireland and left SKC with another colleague, David Simpson, to found Simpson Xavier in 1982.

He recalls the early days when there were just three of them in a small office. The firm has moved six times, each time outgrowing its last premises.

Simpson left a couple of years ago to pursue other interests. He had always stated that he was a reluctant accountant and decided to opt for a different lifestyle.

"We still enjoy a very strong friendship. Our families go on holidays together. I see more of him now than when he was working here."

Mr Xavier says this did not prove unsettling for him or force him to consider quitting.

"I think it's an Asian thing. You work until you drop. I can't see myself not being associated with the firm. My role has very little to do with accountancy. I am really managing a business. I enjoy that. It gives me a great buzz. It's sort of like a drug. I would always like to be involved in some fashion."

He is married to Deirdre, a former teacher from Donegal, and they have three children ranging in age from 10 to 15.

Outside of work he is a sports enthusiast. He plays hockey and occasionally referees games where his children are involved. But his greatest love is Gaelic football and hurling. "It is such great entertainment. Great colour and a great crowd. I really enjoy the banter."

When he arrived in Ranelagh in 1972, he says he was a bit of a novelty.

"Children used to come up to me asking where I was from. It's very different now that there are some many foreigners here." He says he has never experienced any difficulties or prejudice. "Maybe I felt above all of that."

Initially there was some intrigue when he started the firm. "Marketing people were particularly fascinated with me, so in many ways being different worked to my advantage. I have a great sense of belonging. Malaysians and the Irish are both very gregarious. They both like to have a good time and have a genuine interest in people."

Mr Xavier believes many of the accountancy profession's problems are due to an inability to communicate. "We have taken the blame for a lot of corporate failures. In the US this month President Bush has made the chief executives responsible for managing their businesses. It was always easy to blame the auditor but they were not the people running the business."

Unusually for an accountancy practice the smallest segment of BDO Simpson Xavier's business is auditing company accounts. It has deliberately focused on providing a myriad of services to its clients outside of the more traditional areas. This has proved fortuitous in the current climate where audit and consultancy work that traditionally went to the big four firms is increasingly being carved up to ensure greater independence. Mr Xavier says those lucrative earnings are now filtering down to the second-tier firms. "Every cloud has a silver lining. As the largest of the small accountancy firms we are the natural port of call. This is definitely a growth area for us."