bdo - case
TRANSCRIPT
Teaching Farmers to Hunt
Developing Commercial Skills at BDO Hungary
This case was written by Dr. Zoltán Buzady, Assistant Professor of Management and Organizations at the Central European University Business School and his research assistant Lia Nozadze, MBA 2010, edited by Jonathan Long, MBA 2010 and Antonia Issa MBA 2009. The case was prepared as a basis for class discussion and is not an example of effective or ineffective business conduct.
Copyright 2011 by Central European University Business School, Budapest. No part of this publication can be reproduced by any means without written permission.
C02/2011
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Andrea Jamniczky gazed out of her window. Her third story office window was
situated in one of the two main buildings of BDO Hungary’s Budapest headquarters and
was almost entirely frosted over. Snowflakes were falling from the blue‐gray sky, and for
a moment she felt her thoughts turn to Christmas. Andrea had always had a strong
affinity for the winter holidays. From the smells of the outdoor markets to the twinkling
lights on the main boulevard, Budapest was beautiful at Christmas time. Slowly, however,
a strange tension seemed to creep into her festive day dream.
As her gaze shifted back to her office, her mind again rested on the problem she
was now facing as the HR Director and Partner at BDO, an international financial services
partnership. Andrea wanted to put strong HR procedures strong HR procedures in place.
She felt that there was a need to develop a new company‐wide HR strategy, to increase
employee productivity and quality of work. She felt that with the right policy in place, BDO
could gain a competitive advantage within the Hungarian audit and finance consulting
industry.
10 years ago, when Andrea first began her career with BDO Hungary, the company
employed only 30 people. Now she was looking out for more than 130 people. Her mind
drifted over the last 10 years. So much had changed, not least of which were the markets
and customers they had worked for. The markets had become rapidly developed and the
customers were more sophisticated than ever before.
Her gaze shifted back to the snowflakes flitting around in the winter wind outside
her window. She knew that she had to develop a new system for developing BDO
employees’ commercial skills extremely quickly. Management wanted to implement the
project by the end of April, 2011. She closed her eyes and let out a sigh, she knew what
she had to do, but how to do it?
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International experience
The BDO‐Group was founded in Belgium in 1963 when five national BDO‐members, the British, Canadian, American, German and Dutch, decided on joint leadership and a professional alliance. The main purpose in creating a joint venture from the five different companies was to allow BDO‐Group to fulfill the needs of clients doing business across borders. This was probably the first BDO action that provided an extra service for their clients as compared to the concurrently active companies.
In its new form, BDO, International became the world’s fifth largest audit and professional consulting network, operating in more than 100 countries, with over 1100 offices. Thousands of professionals across borders, all worked on helping the company’s clients achieve their business goals. “Understanding the factors of business growth and showing a different way to success” was the priority for BDO. In their 2010 annual report, BDO stated that they “help… clients to make the best out of their business opportunities by offering constructive, fresh thinking, practical approaches and deep professional knowledge on a high standard” BDO’s global performance was tremendous (See appendix 1 and appendix 2).
BDO Hungary
Andrea remembered the moment when she first started at BDO Hungary. At the age of 25 she was just taking her first steps in building her career. The BDO office in Budapest had assisted in the development of companies since 1989. When Andrea first came to BDO, the company had only 30 employees offering audit and tax consultancy services. The management team at that time consisted of 4 partners: Zoltán Gerendy – managing partner/director, tax director; Béla Szolnoki – partner, tax director; Ferenc Baumgartner – partner, audit director; Gabriella Forgács ‐ partner, audit director (she later left the company in 2001) (See appendix 3).
Andrea’s career at BDO began as a German translator, but the leadership soon recognized her enthusiasm and intellect, and her career soon began to advance at a rapid pace. She achieved personal growth and development through hard work and by being goal oriented. She proved very capable of solving problems within tight deadlines. She quickly progressed up the chain of command. BDO Hungary had become the 5th largest auditing and tax consulting company in the market, striving to be as successful as the “Big Four”.
The approach at BDO was to combine local knowledge with international expertise, aiming to build long‐standing relationships based on mutual respect and trust.
In the 11 years since Andrea had joined the company, BDO’s management team had experienced almost a 100 percent turn‐over. Growing to over 130 employees, there were only a few consultants who remained from the “old guard” as well as as the 3 partners from the original management team. In 2009, 6 new partners joined BDO Hungary (Péter Hajnal, Zsolt Sóki, Ildikó Raj, András Nagy, Szilvia Janda and Andrea Jamniczky).
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During this 11 year period, the company worked hard to diversify its capacities and now BDO Hungary offered a wide range of services to its customers: audit; tax consulting; corporate finance; MITM consulting; bookkeeping and payroll services; and hotel and real estate services (See appendix 4).
Competitors
The main competitors BDO faced in their current markets were the members of the “Big Four” – the leading audit companies: PwC, Ernst & Young, Deloitte and KPMG. These companies were much bigger than BDO in Hungary, and had 6 times their number of employees in local offices (PWC – 650, KPMG – 600, E&Y – 500 and Delloitte – 600). While their services were similar to those that BDO offered to clients, only PWC had Recruitment Services, and none of them had labor consultancy. KPMG had built an academy in Hungary, which was a unique institution specializing in adult education. It was established through the integration of the knowledge base of The Budapest University of Technology and Economics and the in‐depth understanding and practical experience of Hungarian and international business life provided by KPMG professionals. The academy offered open courses for professionals from different positions and areas of expertise and positions who had diverse theoretical and practical backgrounds. The courses were set up to teach these professionals acquire new skills and knowledge (such as: International Finance and Accounting, Corporate Finance, Financial and Capital Markets, Tax, Internal Audit and Business Processes, People Management, The Hunting Territory Theory, Decision Making, Knowledge Management, Project Management, Sales Management, Key Account Management, Business Communication, Management Master class).
The “Big Four” members were operating worldwide and had multinational clients. They provided many many events, tax conferences, corporate finance conferences, accounting seminars and service introduction activities to promote their services and recruit new clients.
Customers
BDO Hungary had customers from many different business sectors. Among its clients were: GE Healthcare, Lasselsberger Knauf, Lexmark, Apple, Siemens, LG, Sanofi Aventis, Pappas Auto, Tchibo, Magyar Telekom, Magyar Nemzeti Bank, MOL, EBRD, MFB, MKB Bank, CIB Bank, OTP Bank, Raiffeisen Bank, BNP Paribas, Philip Morris, Zwack, NXP, Teleperformance, SCHMITZ Cargobull, STI Group, Uniqa, Hilti, Mastercard, Chrysler, Toshiba, DHL, Hauni, Kempinski, Accor, Whitebread, Adidas, Triumph, Nabucco, Sodexo and others.
The company offered its clients cost effective audit work, professional services and cooperation. The BDO team performed work by carrying out on‐site half‐year review and year‐end audits based on the time schedule of the company’s financial year.
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Growth Strategy
In the summer of 2010, the BDO Hungary held a strategic planning workshop for all of its employees. They created a singular vision for the next 3 to 5 years and developed main goals to help them reach it. The main priority for future development was to double revenues and the number of employees of BDO Hungary. The top management team did not want to open branches in Budapest, but instead set a priority to open offices in the countryside in order to be closer and more accessible to their clients.
Managing director Zoltán Gerendy regarded this goal as a huge opportunity for company growth and development. In his opinion, the most important driver of their business was their people – personnel who worked at BDO Hungary. Hence, the company needed professionals with high expertise and customer service skills, now, even much more than ever.
Zoltán had spent almost half of his life with BDO Hungary and the future of this company was very important to him personally. For an open‐minded manager such as Zoltán, the importance of making changes was obvious. He felt that front office employees needed to develop better customer service and sales skills as it was they who engaged with clients. As well, back office professionals needed become more supportive of the front line staff.
Back in her office on the third floor, Andrea’s attention returned to this very issue. As her mind drifted through various ideas, she suddenly realized that Zoltán was waiting at through her office door wanting to talk. They began to discuss the various possibilities to solve the issue. Such discussions were frequent between two of them as both were always determined to find the best solution to a problem. “If the company doesn’t change now, we will fail” said Zoltán to Andrea as he looked through the same frosted window through which she had just reminisced. The snowflakes were falling faster now, collecting on the trees, whose leafless skeletons stood bare in the courtyard. It was getting dark outside. “In the consulting business you can be up and running fast, but you can also stop just as quickly; so we need to make sure that we keep moving continuously”, he added.
In 2009, BDO Hungary had 17% growth. In the following year, the global financial crisis had stagnated the market, lowering the expected growth in 2010 to only 3% (See appendix 5). If the company wanted to grow, they needed to improve the skills of their employees. BDO was still a very entrepreneurial type of organization:
“In the Big Four, you are successful because you are a member of Big Four. In BDO you are here because You are successful. We give you a flag if you perform. Let me give you a metaphor: We have very good hunters who are on the front line finding new prey, and we also have good farmers , who are diligently doing their work, for year to year. In certain cases we can put them together into a sales team.
In my opinion, we have talented second and the third line employees, who are pushing their superiors to succeed. We must challenge those in leadership ranks. We have a window of opportunity to act and to keep the competition within reach.
We need to standardize customer service within our company. I want to have the best sales people in each business line across all departments. Hunters and farmers must
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cooperate in order to be successful. The key issue is high quality service. We are hiring people who are professionals. The priority for this company is to develop professional skills with a focus on quality. Critical to the success of the sales process is a deep knowledge of professional issues.
Our problem is not about how our customers perceive our overall quality, they know we are “world class’, but it is rather about communicating our world class message to broader audience. Now we have to focus on expanding our sales.
At the moment, our sales processes are far from being as professional as they need to be. I know we can’t make all of our employees equally successful in sales. I understand that people are different and not everyone has the same skills. Some of us will surely not like the changes. The best way to handle employees who resist change , is to give them a job where they will support the ‘fighters’ within our business.”
“You know, sometimes I feel like a theatre director, where you have the best actors and some mid‐level ones too. You have to give biggest opportunities to “Prima Donnas”, including higher salaries. But you can’t forget the medium level actors, and to check on the orchestra too, because the show must go on,” said Zoltán as he opened the window. The XIIth district of Budapest was festive; everybody was heading home or to local stores to buy gifts. From the office window he could see people moving about the streets with an air of holiday expectation.
Like Andrea, Zoltán too loved Budapest at Christmas time. Looking down on the street he absorbed the scene and remembered his childhood during the Christmas holidays. He had a clear and brief memory of playing with friends in the snow near his home. It was many years ago, but the feeling seemed so fresh as if it were yesterday. Zoltán took a deep breath, bid Andrea farewell, and picking up his laptop bag, left the room.
Andrea continued thinking about the possible options for solving the issue at hand. Even though the support of the top management, the issue was still quite difficult to solve and she was keenly aware that time was growing short. Suddenly heavy steps in the corridor grabbed her attention. Andrea knew it was Ferenc Baumgartner, an audit partner and director of the audit department. Andrea could tell from his steps. Ferenc had a strict and straight walk. He was very time oriented: always focusing on doing the job on time, being on time and not spending too much time on “talkative meetings”. His focus on precision in his life made him a great auditor. Andrea recalled Ferenc’s determined facial expressions while talking about his department’s future a few months back. “Growing the auditing business is my dream. I think that our company has opportunities for growth in this market, but it’s very difficult, as the distance between BDO and the “Big Four” is huge,” he had said and then stopped for a deep breath. The conversation had taken place right after the strategic planning workshop when he had stopped to talk to Andrea about the priorities of his department.
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Corporate Culture
BDO Hungary was operating out of two offices, which were separated by a block of
flats. Face to face employee communication was hindered by the distance between offices.
This was a concern of Andrea’s, as she understood the importance of direct interaction
between personnel. She had always tried to spend time with employees to collect
information and to develop an internal communications system. If, for whatever reason, she
was unable to do this, subordinates within her department did so for her. The company
tried to keep its family‐like culture, which had always been very important for BDO.
The company held team‐building and training events for its employees. In 2005, BDO
established “Club KÖKU” (abbreviation of Közösségi Klub ‐ social club) for its employees,
which was responsible for planning different social programs. The idea of creating such a kind
of club came from Andrea Jamniczky and it was meant to be like a civil organization of BDO
employees.
Club events took place there every 3 months. The club organized events together with
a small group of BDO employees, which consisted of volunteers from different departments.
HR was also included in these activities. Employees always seemed to enjoy these programs
as the programs provided opportunities for employees to get to know each other better
outside the office. In 2010, the club organized social programs such as: skiing in Austria
(February), rafting in Austria (June), a Balaton party (July), a ping‐pong competition in BDO’s
house garden (September) and skating (November). BDO also organized special events for
its clients. Some of these were: a tax conference about transfer pricing, labor‐related
seminars and sponsorship of the “Sose halunk meg” musical event.
Three business units
The Audit Division
The audit division was the most important part of BDO Hungary in terms of revenues. Approximately 40% of total company revenues came from audit. In 2010, 632 million of BDO’s 1.45 billion Forints in total revenue came from audit services. 421 million came from accounting and 397 million were derived from other services. (270 Ft/Euro ‐ autumn 2010).
The audit division had large and medium‐sized companies as clients. It was a very stable business and was working well. The Audit season, lasting from January until May, was always the busiest time for auditors. Overall, about 40 well‐educated professionals worked in the department (See appendix 6).
The division’s activities were regulated by three major laws in Hungary. The most important auditing law was the The Law of The Chamber of Hungarian Auditors. The other important framework, included the standards issued from the same office. These were developed based on international auditing standards. The third major law was the Accounting Act, which was essentially a framework of regulations that dictated how to prepare financial statements and company valuation and also, taxation regulations. Since BDO Hungary had international connections, it also had to follow its own network
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requirements also. These network requirements were well defined in the BDO audit manual. The most important were the International Quality Assurance requirements based on The Global Coordination Office. Every member had to be accredited by the Global Coordination Office and additionally, BDO felt that the regulation regarding conflict of interest was a very important one.
“The Audit Division has some legal restrictions. Auditors, who have are only active as auditors, the auditing activity, not in taxation and not in financial advisory, cannot promote themselves in the clients’ eyes. It is not prohibited to go to the clients and to introduce BDO services to them, but we do not have the right to say ‘we are the best’”, explained Ferenc Baumgartner.
The division had consistently brought in new employees in since September. The best and brightest could stay with BDO based on their performance during an internship period. BDO used several professional tests to measure the results of each intern. Last year, only thirty‐five participants out of ninety‐eight passed the test, and from this thirty‐five, after the interviews, only thirteen trainees ended up being offered a position with the company after the interviews.
The Accounting & Payroll Division
The accounting and payroll division began its started operations five years ago with three employees and now it was the biggest division of BDO Hungary with fifty‐two professionals. Péter Hajnal, head of the division, had begun his career three 8 years prior to the start of the division, ago in the audit department. Audit work, however, was not “his favorite”. He joined the tax department after a year and a half. Being enthusiastic, full of energy and a very motivated, person he achieved success in his job, which led to his being offered the role of managing the accounting division in 2005. The division experienced rapid growth and housed the most employees of any division in the company.
The main capacities of the division were: accounting, payroll and outsourcing services. Half of the professionals in this department were actually working on the premises
of their clients’ premises, full time or part time, according to the clients’ needs. The other half of them worked at BDO’s main office handling classical accounting work.
As Head of Division, Péter was actively involved in the customer service and the selling process. Fifty percent of his tasks included communication with current and potential clients, with thirty percent of these clients of this division being international. Péter obtained new clients through contacts. The division could not offer bookkeeping to those clients that were already using BDO in an auditing capacity, as Hungarian law prohibited this based on their strict conflict of interest regulations. Client acquisition was also aided through the active collaboration between the accounting and payroll division and other divisions and departments, including the HR department who were able to cross‐sell their consulting services.
Anna Kisné Szabó was the Péter’s ‘right hand’. She was responsible for internal accounting and payroll. She was also responsible for planning and organizing training events for the division.
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The Tax Division
The tax division was the smallest division at BDO Hungary with only eight employees. Most of the work for this department, was generated through the company’s existing network. They worked mostly for international customers such as: Siemens, Tchibo and Sanofi. Tax advisors handled handling various tax related issues for their larger clients. The main duties of the department included corporate tax revision and tax consulting for companies. The department also provided tax advisory service to companies, when they were facing inspection by local tax authorities. The tax division employees were worked on an hourly based consultancy fee. Their performance was very effective and the department generated 280 million Forints in income per year.
“Our three divisions work independently. We have very good teamwork among colleagues, but internal communications needs to be improved as they are currently quite weak”. Andrea thought about these words that Péter had spoken a few months earlier.
Andrea was very proud of him, as she was one of the persons who had hired Péter Hajnal back at the very beginning. With every successful career move, Andrea felt a small sense of pride. She believed Péter and agreed with his opinion about the issues with internal communications.
The HR Department and It’s Activities
The HR department had two main responsibilities: The internal HR department, was tasked with planning and organizing the main HR activities of BDO Hungary staff and HR Services was responsible for providing HR Services to outside customers. Andrea was currently leading both departments. In internal HR she had two young colleagues, and in HR Services – one young woman, who worked in recruitment, plus a very experienced young man (who had previously worked as a labor inspector for the government) to handled labor consultancy.
Personnel Training and Development
“I have to close the window, it’s freezing in here!” said Andrea to herself standing up
to cross the room. The cold air filtering into the room through the open window had a crisp
and clean feel to it. She could see the lights outside casting soft glows across the snow. A
sudden temptation to take a stroll down the street was quickly thrust to the back of her
mind as the weight of the task at hand took center stage. Andrea had a sense that this was
now on her shoulders to solve.
BDO believes in and supports the continued education of its employees. The main
methods, through which this could was accomplished, was be divided into three categories:
external trainings, internal trainings and conferences abroad.
External trainings included professional training courses for auditors, tax consultants
and accountants.
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Employees were also consistently being trained on the new changes in tax codes and
relevant legal regulations. These sets of training would be outsourced by BDO covering the
cost of training. Employees participating in training courses would be required to prepare a
summary of what they had learned and this would be shared with their colleagues.
Internal training courses were mandatory for employees and they included:
professional trainings, IFRS training and software training sessions. These training sessions
were provided during the work day, in order to make the development process more
flexible and comfortable for employees. Finally, BDO Hungary also company is supported
trainings, courses in inland. In the last three years, ninety‐two employees attended training
conferences in inland. Conferences abroad were also considered a bonus by the employees,
as this meant that they were entitled to participation in international conferences and that
costs would be covered by the company. In the last three years, thirty‐three employees had
gone abroad for training or conferences.
BDO International had a yearly training calendar. This included mostly technical
training for auditors and tax consultants. Towards the beginning of a fiscal year, the HR
Department would send the annual training calendar to the various departments. Division
leaders would then be given the task of determining which employees could participate.
Their decisions were then discussed with the HR Department and HR would register the
employees for the various training sessions. For external training sessions, the company
paid either the total cost of the course, or they would split the cost 90/10 with the
employee respectively. Usually auditors paid 10% of the training fee, but this decision
depended on the total price. BDO developed a system of education contracts with
employees. These contracts indicated that meant if an employee left company earlier than it
was agreed in their learning educational contract, s/he would be obligated had to repay
back the money that the company had spent on the development of that employee’s skills.
BDO Hungary provided new employee orientation workshops every September when the
entire company including its package of services was presented. There was no written or
official employee development plan at the company, but BDO had a hierarchy of different
positions which most people understood to delineate a higher or lower status within the
company. These levels were the following:
1. Graduates/interns; 2. Assistant/junior accountant; 3. Senior assistant/ professional/accountant/payroll clerk; 4. Junior supervisor (only in audit department); 5. Manager/senior supervisor/group leader; 6. Salary partner; 7. Equity partner/general manager; 8. Managing partner.
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Customer Service and Cross‐Selling
In the last two to three‐3 years, BDO had PR campaigns on TV, and radio (radio café, gazdasági rádió) PR campaigns with as well as a half‐an‐hour BDO blog. “We are participating actively in social events, but it is not enough for attracting potential customers,” mentioned Ferenc Baumgartner during a discussion of the problem. Cross‐selling was not going well. In the current year (2010), the company did marketing research among its clients, and the results showed that customers did not know about the company’s other services except other than audit, tax and accounting services.
In January 2010, BDO created a special ‘Bidding Team’ tasked with attracting and contracting new clients. The team would put together professionally prepared bids and they participated on tenders to win the new business. The main task of this team was the technical support of acquisition processes. This included preparation of the presentations, which could later also be used by the other departments. 2 people were working in the Bidding Team. The HR director was the team leader and was responsible for organizing and controlling the bids. All new potential businesses ran through the bidding team. “Customer Service is doing quite well in the Accounting and Payroll Department. Each client has a contact person at BDO, who is personally responsible for the whole servicing of that client company. If an employee is out of office, the team leader (who knows all details of the client company) will stand in for him/her. My employees have to be flexible and accessible for their clients – that is the top priority for my division,” said Péter Hajnal once, during a managers’ meeting.
“In the audit department, customer service is not at the same level; auditors do not communicate enough with clients. They are busy with the audit services. They want to acquire more clients, but they do not put enough effort into selling our services in order to catch prospective clients. The middle level does not have a free hand to make decisions and is unable to communicate with potential customers. All of the customer service activities are done by the five audit employees and – by partners. The other employees are not involved in the process” mentioned Péter during the discussion about the possible ways to solve the problem. The audit department tried to improve its service by using APT software (Audit Process Tool), which was developed by the global coordination office, but it really was not enough to make a significant impact on sales. The market stagnated, the global economic crisis of 2008 hit the country very severely, and competition was very strong. For the further development of its business, management knew that cross‐selling its services was extremely critical for growth. “Auditors are best positioned for solving this problem as their behavior with clients is extremely important. The audit department has the largest number of clients and they therefore have the potential to have the biggest impact on the competitiveness of our business,” Zoltán Gerendy opined. “But auditors are not naturally born salesmen. They just cannot be customer and sales oriented” responded Ferenc defensively.
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Andrea glanced at her calendar, not needing to be reminded that a solution for
solving the problem had to be in place within three months. In April, the auditing
department would wrap up their busy season and sign annual contracts with customers
for the next year. It was quite difficult to try to do everything in such a short period of
time. Andrea remembered clearly the concepts that she had learned in her Organizational
Behavior, Human Resources Management and Leadership class she had taken back at the
CEU Business School. She knew she had to use them somehow to develop an effective
plan, but the reality was still illusive. In addition to this, Andrea was thinking about
existing HR tools within BDO worldwide. “If only I had enough time to develop a talent
academy like the Netherland’s office and a competency framework like the UK office
developed,” she thought, the futility of the wish lingering momentarily. She let out a sigh
and decided to start the project first thing tomorrow morning. She stood in front of her
window, her reflection now looking back at her, but her gaze continued through the frosty
pane. Large snowflakes were falling now in the very cold evening. Andrea decided to go
down the Budapest Christmas Market near Vörösmarty tér (ranked top 10 by the Times
Newspaper – The Sunday Times (2008) “Europe’s Best Christmas Fair”), which was usually
crowded with cheerful people during the Christmas season. Surely the smell of mulled
wine and roasting chestnuts would be a welcome distraction from the issue, at least until
tomorrow.
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Appendix #1 BDO Global – Key Figures
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Appendix #2 BDO Global – Performance Figures
5.1 % increase on previous year (in US $) (Excluding the effects of all currency movements)
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Appendix #3
Management Team of BDO Hungary (December 2010)
Gerendy Zoltán (46) – managing partner. Economist, tax advisor, tax consultant,
spent 18 years with BDO Hungary.
Baumgartner Ferenc (48) – equity partner, head of audit department. Economist,
chartered accountant, bank accountant, spent 12 years with BDO Hungary.
Hajnal Péter (31) – equity partner, head of accounting and payroll department.
Economist, tax advisor, spent 8 years with BDO Hungary. Student of CEU Business
School EMBA program (2010 intake).
Jamniczky Andrea (35) – equity partner, HR director, head of personnel consulting
services. Economist, social security expert, spent 11 years with BDO Hungary. Student
of CEU Business School EMBA program (2010 intake).
Kisné Szabó Anna – (43) – consultant of the accounting projects, tax advisor.
Mechanical engineer, spent 6 years with BDO.
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Appendix #4
Services of BDO Hungary
Audit and Assurance services included: Audit of annual reports prepared according
to IFRS; Audit of annual reports prepared according to HGB; Audit of annual reports
prepared according US GAAP Sarbanes‐Oxley audit; Audit of credit institutions, financial
companies and investment funds; Audit of funds statements on transformation; Audit of pre‐
companies; Assessment of contribution in kind; Preparation of accounting standards;
Fulfillment of internal audit tasks; Preparation of risk analyses; Auditing commissioned by
certain authorities; Credit analysis; Profitability assessment and Due diligence.
Accounting and Payroll services included bookkeeping and payroll accounting.
Bookkeeping was presented with following: Full‐scope bookkeeping, preparation of tax
returns, and annual reports; Participation in the audit; Regular in‐depth information
regarding the company's accounting situation; Preparation of reports for the client and
other authorities; Implementation of the bookkeeping system, review of the current system;
Compliance with the information and data supply obligation as it was prescribed by law;
Preparation of the regulations as prescribed by law; Accounting consulting and Online query
option. Payroll accounting includes: Full scope payroll accounting; Labour and social security
administration; Preparation of tax certificates; Fulfilment of monthly transfer orders;
Preparation of statements and cost plans and Operation as a social security pay office.
Tax Consulting services offered: General tax consulting services for companies and
private individuals, corporate tax services and personal income tax and contributions.
General tax consulting services were: Tax planning, on national and international levels; Tax
due diligence, risk analysis; Representation in tax authority proceedings; Advance tax ruling;
Advising in the course of legal remedy procedures; Transformation, restructuring; Answering
issues regarding international taxation, with the co‐operation of the international
background network; Interpretation of taxation issues, in cooperation with the authorities, if
necessary. Corporate tax: Corporate tax calculation, tax allowances; Transfer pricing
documentation, APA, VAT; VAT treatment in relation to domestic transactions; EU VAT
regulations; VAT registration of foreign companies and full‐scope tax management and VAT
refund for foreign companies. Personal income tax and contributions had following parts:
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Development of benefit schemes; Tax on investment income and Preparation of personal
income tax returns and social security contribution returns of foreign private individuals.
Corporate finance services included: Transaction advisory, Financial advisory and
Special advisory. Transaction advisory contained: Mergers & Acquisitions, Buy side & Sell
side advisory; Business valuation, valuation of intangibles and intellectual property and Due
diligence. Financial advisory – Financial modeling, reviews and monitoring; Business
planning, reviews and monitoring; Project finance; Financial structuring and Finance raising.
Special advisory services had following: Financial restructuring (debt to equity conversion,
refinancing advisory); Financial risk management, monitoring of financial output; Forensic
services; Feasibility and market studies.
BDO Hungary also had the personnel consulting services, which was started in 2006
and included: Recruitment / outsourcing finance and accountancy (selection of experts by
special testing, individual professional and competency based testing), Labor consultancy
(labor audit, correction of labor defects, special trainings and labor consultancy),
Cafeteria/benefit consultancy (cafeteria/benefit system consultancy, system’s introduction
and monthly administration) and ExPat services (managing official documents, home search,
moving services, orientation and help with daily routine).
Relatively new services were hotel, tourism and real estate advisory and IT
solutions.
Hotel, tourism and real estate advisory included: Feasibility studies and operation
due diligence (feasibility studies, due diligence, business valuations, master planning,
tourism strategies and programming, quality assurance), Development advisory (project
preparation, project management, pre‐opening planning, hotel and restaurant sales and
marketing concepts, introduction and fine tuning, managing operator search and relations)
and Special advisory (owners’ and banks’ professional representation – asset development
and asset management solutions, review of problematic cases, implementation of
restructuring, refinancing and work out strategies, identification of interim or long‐term
management and operational solutions and transactional advisory projects).
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Information technology solutions offered to customers: Information security and risk
management services, Services concerning information systems and Advisory services
concerning organizational development. Information security and risk management services
included the following: Project and tender management; Project and professional quality
control; Information system auditing (ISO 27001, COBIT, BS 7799, CC standards); Information
leakage exploration and prevention (DLP, ILP, Net‐DLP, Content Filter, Mail/File Indexing); IT,
Multimedia and Mobil Technology examinations, market research and compliance
examinations; Preparation of Business Continuity Plan, Disaster Prevention Plan; Information
Technology development planning, product development and quality control; Software
testing; Data management planning and support; Legal (Etichal/White Hat) Hacking,
Penetration Test (14 years of experience); Forensic services (investigations, IT legal forensic
expert and legal support and evidence collection) and compliance examinations (Hungarian
Financial Supervisory Authority, Sarbanes ‐ Oxley). Services concerning information systems
included: Development of IT strategy, implementation planning and project management of
execution; Compliance assessment and rationalization of business and operational
requirements of information systems; Management and quality control of implementation
projects of information systems and outsourcing planning and support. Advisory services
concerning organizational development consisted of: Assessment (examination of
organization, processes, activities, responsibilities, decision lines), development,
rationalization, increasing efficiency of operation and assessment, development,
rationalization of information technology support of operation and management activities;
adjustment of operation and information systems (office automation).
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Appendix #5
Consolidated Net Income (THUF)
Services Consultancy Consolidated
Year Audit Tax Corporate Finance IT
Bookkeeping/ Payroll Holding HR
net income in THUF
Consolidated income change GDP change
2000 198,713 69,345 268,058 100 100 2001 217,982 74,246 292,228 109.02 104.10 2002 292,192 109,359 401,551 137.41 104.40 2003 342,973 143,327 486,300 121.11 104.30 2004 345,420 153,267 498,687 102.55 104.90 2005 376,498 226,589 603,087 120.93 103.50 2006 425,033 268,631 43,157 64,470 6,729 2,590 810,610 134.41 104.00 2007 489,993 283,746 97,980 152,215 14,498 22,970 1,061,403 130.94 101.00 2008 493,154 282,848 103,678 39,060 262,905 2,205 37,071 1,220,921 115.03 100.60 2009 634,906 279,634 106,189 33,919 333,680 4,129 36,605 1,429,062 117.05 93.70 2010 632,117 230,269 98,000 7990* 421,854 31,141 39,948 1,453,329 101,70
* this is the 'old IT group', the new company (new IT group) started activity end of 2010, this sheet is not including their income.
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Appendix #6 Organizational Chart of BDO Hungary
D irect or/
Equ ity pa rtne r
ch ief ac co un tan t
BDO Magyarors zág Vagyonkezelő és Szo lgáltató Kft. Gerendy Zoltán
Manag ing Partner
Dire ctor /
Equ ity p artne rMa nag er/
S ala ry p ar tnerMa nag er /
S a lary par tne rM ana ger /
Eq uity p artn er
S e n. te am lea de r S en. team le ade r Conf iden tia l c lerk / S a lary par tne r
Ta x m an age r
P ayro ll clerk
T eam le ade r
Acco unt ant
Acco unt ant
Acco un tant , E rix Ac cou nta nt, R e ca
Te am le ade r
J un . te am lea der
S upe rviso r
Kisn é S za bó Ann a Ma na ger /
S ala ry p art ner
Ac coun tan t, GE
Ac coun tan t, GE
Chie f a ccou nta nt, G ES ala ry p artn er
Chie f a ccou nta nt, H& Gy
Ac coun tan t, GE
J un . te am lea der
J un . te am lead er
Accou nta nt, R eca
Acc oun tan t, GE
J un ior a cco unt ant
Acc oun tan t, GE Fin anci al an alys t, GE
P ayro ll cle rk
Acc oun tan tAc cou ntan t
T ea m l ead er
S e n. t eam lea de r
BDO Ma g yarors zág K önyv vizs g áló Kft.Au dit
Bau mga rtne r Feren c Direc to r
E qu ity p art ner
B DO M ag y arors zág Köny ve lő és B érszá mfejtő Kft.B SG Audit K ft.
Accou nting, Payro llHaj nal Péte r
Dre ctorEqu ity pa rtne r
B DO Ma g ya rorszá g Ta nác sa dó K ft.TAX ad v. Finan cial ad v. Pers o nnel con s.
Ge re nd y Zo ltán S zo ln ok i Bél a Ra jné Ada me cz Ild ikó J a mn iczk y An dreamana g ing d ire ctor Di re cto r Director Dire cto r
Man ag in g Pa rtne r Eq uity p artn er Equ ity pa rtne r Eq ui ty p artn er
J unio r a ccou nta nt
Ac cou nta nt, G E
Acco unt ant
Fin anci al an alys t, GE
Cons ulta nt
Te am lea der ,GE
J un ior acco un tant
Ac cou nta nt Fin anc ial as s is tan t
J a mn iczk y An dreaHR directo r / E quit y pa rtn er
HR ma nag er CR M as s ocia te
F ro nt o ffice Front off ice F ron t o ffice m. As s is tantB ID as s is tant
Ma rket ing/ KAM I T
Tard i Évac hie f o pe ra tin g of fic er
Acc oun tan t
M an age r
J un ior a cco unt ant
F ro nt o ffice ma na ger
HR as s ociat e
CR M m a nag er
BDO Hun gary
December 2010
Acc oun tan t as s is tan t
Acc oun tan t as s is tan t
La bou r c ons ultan t
S upe rviso rS u pervisor
S u pervisor
S e n. t eam le ade r
Fin ancia l an alys t, GE
P ayroll cle rk P ayroll c lerk
As s is tan t I.
Train ee
Train ee
T ra inee T ra inee Tra ine e
Tra ine e
T rain ee
T rain ee
Train ee
T rain ee
T rain ee
Traine e
Traine e
R ecruitm entcon sulta nt
Ta x ma nag er
Ta x m an age r
T rain ee
As s is ta nt
Traine e
T rain ee
Fin ancia l an alys t , GE
P RCont rolle r
S en ior con sulta nt
S u pervisor
S en . te am lea der
S up ervis or
As s is tan t III.
As s is tan t III.
S upe rviso r
As s is tan t II.
As s is t ant III.
As s is tan t III.
As s is tan t III.
As s is ta nt II.As s is tan t II.
Ta x co nsu ltan t
T ax e xper t
P ayro ll cle rk
S up ervisor
T ea m lead er
20
Appendix #7 BDO UK’s Competency Framework
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