Crowe Malaysia / AGS Consulting

Crowe Malaysia, an accounting firm with a Japanese tax accountant from AGS consulting

Crowe Malaysia / AGS Consulting
Japan Desk Director
Mr. Nobuyuki Yakuwa


Mr. Yakuwa is a certified Japanese tax accountant. Joined AGS Singapore after engaging in a major foreign-owned company at KPMG Tax Accountant Corporation (Tokyo, International Division) and as international tax advisory services for Japanese-listed company . Transfer to Crowe Malaysia from 2018 and in charge of the Japan desk.

◆AGS Consulting◆
Japan's established consulting firm for 50 years. There have four (4) offices in Japan such as Tokyo, Osaka, Nagoya and Fukuoka, and overseas offices such as Singapore, Hong Kong and Malaysia. There are more than 370 staffs and more than 2,000 customers. AGS Consulting are experience in advisory such as IPO support, internal control support, overseas M & A, etc.

◆Crowe Malaysia◆
This is a global accounting firm that is the second largest in the world among four largest accounting firms called "Big 4". There are 13 bases in Malaysia, with 1,300 staff. From 2012 IPO support they are the largest among domestic accounting firms.

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Japan desk with strengths of both "Consulting AGS" and "Auditing Crowe"

ーMr. Yakuwa has been part of AGS Consulting on a seconded basis to Crowe Malaysia's Japan desk. How did you decide to partner with Crowe?

Mr. Yakuwa   Actually I spent about 5 years at AGS Singapore branch, but there are many projects related to Malaysia, and I came to Malaysia on a business trip basis every month.

We set up a base in Malaysia and talked to various accounting firms in Malaysia, but in order to carry out M & A (acquisition and merger) and internal control projects that AGS specializes in, the quality and structure have to established reputation. Therefore, we decided to partner with Crowe, the second largest after Big 4.

ーWhat is the strength of Crowe Japan Desk in Malaysian accounting firm?

Mr. Yakuwa   I think the industry of accounting firm is easy to understand by divides it to "Structure" and "service content".
"Service content" is divided into "Accounting Auditing" or "Consult (outsourcing)".

Crowe is the fifth largest in Malaysia, and biggest companies after Big 4, but in generally most of the major accounting firms specialize in "accounting audits".

On the other hand, medium-sized accounting firms like AGS are often good at "consulting (outsourcing)" such as company establishment, bookkeeping agency, tax filing, IPO (public listing, listing preparation) support and M & A support.


Crowe Japan Desk has both strengths of being able to use Crowe's structure to conduct accounting audits, and to use the experience of AGS to perform consulting (outsourcing) for fullfill the Japanese companies' needs.

Besides, I have experience in international tax practice as a KPMG tax accountant corporation before, and also it is also a strength that only few accounting firms with Japanese tax accountants in Malaysia.

Overseas based accounting firms that can provide services that meet the “needs of Japanese companies” are valuable

ー What are the “needs of Japanese companies”?

Mr. Yakuwa  There is such feeling among Japanese that Japanese-style services are "I told you 5 and you will make it 10 for me," even if not specified in the contract, they will also take care of the back of words and hidden requests, I think Japanese companies have some of these expectations to accounting firms as well. However, especially at overseas accounting firms, if you tell "5", they only will do "5" for you.

AGS has many years of experience in supporting Japanese mid-sized companies, and we are familiar with what services Japanese companies need. I always try to provide Japanese-style services at overseas bases.

Also, since I have a tax accountant qualification in Japan, and in Crowe Malaysia there are professionals in each field, therefore,  we will provide the services based on understanding the difference between Japanese law and Malaysian law.

Cases coming from AGS in Japan are “M & A” and “internal control” for IPO

ーWhat kind of relationship in tasks with AGS in Japan?

Mr. Yakuwa  AGS has more than 2,000 customers, and many of them are interested in M & A of overseas companies. If acquired a Southeast Asian Company, a cross-border M & A deals may come through the headquarters.

Also, AGS has a lot of experience in IPO support, but if the company aiming for IPO has a subsidiary overseas, there may be a case of its internal control.

ーIn Malaysia, is that many cases for M & A or internal control?

Mr. Yakuwa   Yes. In Singapore, there has been a period of time that Japanese companies have rushed to entering the market, and many cases in which they have been launched from zero, but recently there are increasing cases where companies that already exist overseas are acquired and entered.

Over the last few years in Malaysia, there have been an increase in the number of acquisitions of Malaysian companies by small and medium-sized Japanese companies in Japan.

Also, the number of internal control cases has increased after Toshiba's fraudulent accounting case in 2015, and the accounting for overseas subsidiaries has begun to face tough times.
 

Cross-border M & A- From Advisory until Due Diligence, PMI

ーWhat kind of work is required for M & A projects?

Mr. Yakuwa  There are various stages for M & A, in summary it is divided to 4 as following: 

1. FA (financial advisory) work as mediate of M & A

2. Due diligence to check the financial status of the acquisition target company

3. Valuation to calculate appropriate valuation

4. Post-integration support (PMI)

We offer M & A services from upstream to downstream. Although the number of FA operations has been increasing recently, but in Malaysia there are most cases in due diligence and valuation. If M & A goes well, we may be responsible for post-acquisition integration support service (PMI).

3 steps to work on internal control

ーAnother thing that is increasing in Malaysia is internal control projects, right? What exactly does "internal control support" do?

Mr. Yakuwa  There are 3 steps to work on internal control
 

1. Preparation of flowchart  "Visualization" of daily work

2. Document contents  Written details about flowchart of 1.

3. Risk Control Matrix (RCM) List down possible points of risk in flowchart
   

If you want to resolve the risk found in the RCM, you have to check in quarterly basis to improve. Basically this series of flows know as "internal control support".

The important thing in internal control is to create rules that prevent the occurrence of money-related frauds in the company.
When moving money, it is very basic things that the applicant and the approver should be separate, or the sign of the check should be set by several people, or decide the upper the limit of cash, but seems there are many that have not been done thoroughly.
 

Support for Malaysia subsidiary J-SOX

ーWhat is the purpose of the requesting company?

Mr. Yakuwa  There are various cases in which you want to secure the management system, such as simply wanting to check the status of overseas subsidiaries and problems such as embezzlement.

When went to a subsidiary in Malaysia with my HQ personnel in Japan, will meet with a account personnel, check on contents in bookkeeping, verbally explain the situation and also provide report. 
If a major problem is found, we will support for strengthening of the management system. 

Furthermore, AGS's HQ has a lot of experience with IPO support, but if a Japanese company  has a subsidiary overseas preparing for IPO, J-SOX is necessary to respond to the Japan Financial Instruments and Exchange Act (internal control audit system). The correspondence is often outsourced.

Even with J-SOX support, the previous three steps are the same. In addition, it is necessary to maintain rules such as "Department Authority Regulations", "Credit Management Regulations" and "Debt Management Regulations".

ーThere are many technical terms in accounting audits and tax, so actually is secure to communicate in Japanese in overseas.

Mr. Yakuwa  That is the strength of our Japan desk.
There are also other Japanese accounting firms with Japanese experts in Malaysia.
However, Crowe's Japan Desk are not only consult in Japanese Language, but it can receive support from both Malaysian accounting firm called Crowe Malayisa and a semi-large accounting firm called AGS Consulting from Japan.

By using this strength, we hope could help to solve more problems with Japanese companies at the Japan Desk in Malaysia.

Click here for more details about Crowe Malaysia Japan Desk (AGS Consulting)