Armenian News-NEWS.am presents an interview with Grant Thornton Armenia Managing Partner, as well as the member of Grant Thornton International Board of Governors, Gagik Gyulbudaghyan. In an interview with the agency Mr. Gyulbudaghyan presents 20 years of company’s work. With experience of working abroad and knowledge of local market, advisory and audit services provided by Grant Thornton Armenia, the company contributed to building business climate in Armenia. In addition, the services are exported, thus raising awareness of Armenia as an intellectual center.

Grant Thornton Armenia was founded 20 years ago when a few knew what an independent audit is. What changes has Armenian market undergone over the last 20 years?

Our company was launched in 1997, but Grant Thornton France had been operating in Armenia since 1992. At the time, many people still had no idea what an independent audit is, what are the standards of business ethics. A lot has changed,also, due to the work we have done. We now have 150 employees instead of eight we used to have. We are a market leader. In past years, we have made a great contribution by training numerous professionals, performing analyzes that helped both business and public sector.

In 2016 we registered an 18 percent growth despite difficult economic situation, and tighter competition. The secret of our success is that here in Armenia we have the best quality staff, professionals and shareholders. These qualities also make us famous abroad.

We are exporting our knowledge and skills. Last year, just like during previous years, we signed many contracts abroad, in particular in Georgia, Kyrgyzstan, Tajikistan, and we will start working in Mongolia this year. The investment that we brought to Armenia is also spreading to other countries. Here in Armenia we display all the qualities which are known abroad: we are honest, responsible, professional and hard-working. We are not afraid of challenges, this is the reason we succeed in countries where others face difficulties.

So, you have the right to present Grant Thornton outside Armenia?

For any firm to be able to operate under the brand of Grant Thornton in any market, permission of Grant Thornton International, is required. We have undergone this process when started operations in the three countries mentioned, where we have established subsidiaries of Grant Thornton Armenia. Our Armenian experts support operations in these firms.

I want to emphasize once again that everything we achieved was thanks to our highly qualified staff, who possess all types of qualifications both in the area of audit, valuation and IT security. Some of them were new for foreign markets.

Which are they?                

We were the first firm to provide advisory services for ISO 27001 information security certification. A number of Armenians banks have already got the certificates and we have consulted some of them in this process.

Another new service is providing Payment Card Industry Data Security Standard certificate. We have the right to perform throughout Europe. This service is available for card processing centers, banks issuing credit cards, stores providing discount and loyalty cards. Starting this year we are performing penetration tests which are mandatory for information security of banks. Armenia has a great demand for this service. The service is in high demand outside Armenia as well, and we will work with Grant Thornton UK by complementing each other. Similar services have been already offered in Armenia, but you have to pay the price equivalent to the one you pay in U.S. or Europe. We will become the first local company. We had orders for information security certification from Europe and U.S.

Are these companies working in CIS market or not only?

Not only. We have provided IT audit services to a number of UN headquarters: for UNDP and UNICEF in New York, UNOPS in Copenhagen. We have clients in France, Croatia and other European countries.

Do you have new tools for financial sector - the main traditional audit customer in Armenia?

 Starting January 1, 2018, all Armenian banks have to adopt the ninth version of the International Financial Reporting Standards (IFRS). We help Armenian and foreign banks to prepare for IFRS 9.

Overall, there is a lot of work, we try to offer innovative solutions for businesses. Grant Thornton permanently supplements its traditional services: due diligence, feasibility study, asset valuation, business plan. For many years we have been also working on major state-run projects, including infrastructure. We often act as a part of multi consortium by providing accounting and consulting. We are doing this not for Armenia only.

What about public sector?

We have participated in setting up an e-gov – a program of electronic government of Armenia. Among other projects are illumination project in Yerevan, stock-taking for the Ministry of Finance.

In Kyrgyzstan we implemented projects for the state property fund, post office, and provided assistance with the introduction of e-procurement system, for which will also help develop audit methodology.

The requirement for mandatory audit for large companies was introduced in 2010. It was removed in 2014. Have you experienced decline in number of customers?

Almost not, and I will explain the reasons. Our main customers are companies ordering audit not as a requirement, but as a part of a corporate culture that recognizes both the importance and the benefits of audit. During the period of mandatory audit, the number of our customers has increased by 3-4 percent. We lost them later, but gained new customers instead.

What advantages do the companies get after audit? Is it about good terms for loans or participation in international projects?

Yes, that's it.  In some cases the companies wanted to participate in international competitions. They just came and said: 'you know they demand an audit over the last three years' and asked whether we can do it. In order not to find yourself in this situation, we must have a culture of audit. It is a desirable option for everyone, but this is an imperative for the companies wishing to work in the regional or global markets. Many of our partners are either participating in the programs of international financial institutions or are receiving funding from international agencies.

According to a new law proposed by the Finance Ministry, audit companies must undergo an independent certification through a sectoral chamber. Auditors are ready for such a responsibility.

This is definitely right. There must be a very strict assessment, high quality standards, so that no one could order or carry out an audit just to tick the box.  We all have to realize that the company itself needs an audit. It is required first of all to check the state of your company, and only after to make your partners aware of the state of your company. Finally, the audit is important for government: lack of audit leads to a shadow economy. And if we want to have rule of law, transparency of all companies has to be a must.

And of course, it's also important for foreign investors. I am happy that oall of the world's leading accounting networks operate in Armenia. This is a great confidence for the potential investor. I am also happy to note that we were the first, and now we are the leaders. Two decades of Grant Thornton Armenia’s investments enabled not only to improve the level of economic and financial analysis, but to present Armenia abroad as a country having high level financial services.