In conversation with Lawrence Jin

In conversation with Lawrence Jin

Lawrence Jin, a senior audit partner of Deloitte China, started his career with the Deloitte London office and qualified as an ACA. He became a partner with Deloitte China in 2005 and currently leads one of the largest audit groups in Deloitte Shanghai with over 250 professional staff.

Lawrence has been in charge of some of the most significant national and international clients of Deloitte in a wide range of industries including Alcatel Lucent, China Telecom, General Motor and WPP. He also led a number of significant cross border transactions including Geely/Volvo and Sanpower/House of Fraser. He has shared some reflections and advice with Aspire Executive Editor, Professor Colin Mason.

Colin Mason: What has been your career path that has got you to your current position?

Lawrence Jin: I joined Deloitte & Touche London upon graduation and qualified as an ACA in 1999. Then went on an 18 month international secondment to Deloitte Shanghai office in 2000. Obviously, I overstayed my secondment term! I was made a partner with Deloitte China in 2005 and just completed my 10 years as partner in the firm.

CM: To what do you attribute your personal success? Are there lessons that current students can learn from your career?

LJ: I consider myself to be at the right place and at the right time. I returned to China just as the country was negotiating to join WTO and enter another phase of rapid growth. I would like to advise current students to 1) follow your personal interests and passion 2) take risks and get out of your comfort zone where necessary and 3) build networks and relationships.

CM: What did you learn at the Adam Smith Business School that is of most value to you today?

LJ: My time with the School certainly built a solid foundation for my future career. The School obviously taught me all the technical knowledge in accounting, finance and economics but equally important if not more, a way of thinking and relating to different people, which I still benefit from today, nearly 20 years after graduation.

CM: What are the main audit and accounting issues in China today?

LJ: In many ways, these are similar to other countries, e.g. how does the audit profession stay relevant to the users of financial statements in terms of accuracy, timeliness and relevance? How can we better converge different accounting standards to improve comparability? These aside, one of the biggest challenges remains proper implication of accounting standards.  Whilst rules in China are pretty comprehensive, the level of understanding and quality of finance professionals still vary significantly.

CM: What important lessons have you learned regarding working across cultures?

LJ: The ability to work across cultures is vital in our profession.  Our partners in the China firm come from over 20 different countries and we work with such a diverse group of clients from Fortune 500 multinationals to small start-ups in a remote area of the country. This is a challenge but also I believe a key strength and competitive advantage of large international firms as our clients are becoming more diverse and international.

CM: You were involved in Sanpower Group’s acquisition of House of Fraser, the largest overseas acquisition in the retail sector by a Chinese business. What was your role in this?

LJ: Deloitte acted as reporting accountant in connection with the transaction which involves an audit of historical financial statements of House of Fraser and verification of IFRS/PRC GAAP difference, as well as profit forecast statements as required by Chinese stock exchange rules.

CM: What were the major challenges associated with this acquisition?

LJ: Generally, just as with any Chinese outbound acquisition, there are a number of inherent challenges, including expectation gap/understanding between the buyer and seller of the process and the work required, language/culture differences etc. The transaction was made more challenging as the buyer was a Chinese A share listed company so has to comply with some rather complex Chinese stock exchange rules that are not well understood outside of China.

CM: You are the National Leader for Deloitte’s Cleantech group. Do you think that businesses in China are trying to address the country’s negative reputation regarding environmental issues?

LJ: Yes, we see more and more businesses, including many of the large local companies (both state owned and private) taking active measures in tackling environmental related issues in their respective field. But clearly this is not sufficient and government could play a big role both in terms of executing and delivering on the favourable policies announced (e.g. subsidies to renewable energy sector) and enforcing laws for noncompliance.

CM: What are some of the initiatives you would like to see come out of the work of Cleantech?

LJ: To promote and encourage better collaboration between international and Chinese companies.

CM: What is the current job market like for new accountancy and finance graduates?

LJ: Very good I believe, especially for those from top universities. We see job opportunities becoming more diverse with MNC, SOE (state owned enterprise) and private companies all competing for the best talent. Also, with the focus of economic growth away from the coastal/first tier cities, we see more openings in cities like Chongqing in the west of China, where Deloitte opened a regional headquarter a year ago, and is looking to aggressively grow our presence in that region. Sector wise, I would expect more opportunities in the financial services sector (underpinned by strong capital market performance and fund flow) and the so called ‘new internet economy’.

CM: What new challenges will accountancy firms face in the next five years? The next 10 years?

LJ: We very much look at ourselves as a full-fledged professional services firm rather than just accountancy firms as such. I will mention two, but one may say they are not necessarily new.  The first is technology, both in terms of how we embrace new technology in the way we operate as a professional service firm and deliver our services to our clients, as well as fundamental changes in the way our clients operate and do business. We cannot be relevant to our clients if we don’t stay ahead of them. The second is talent – attracting, rewarding, retaining and developing talent is always a challenge in our profession and I think it will get harder, not easier!  Specifically on the audit side, dealing with the increasingly tough regulatory environment remains a big challenge. Mandatory rotation in Europe and now many other countries (including for certain state owned companies in China) is a relatively new challenge auditors need to deal with.