By DUNCAN MAVIN

These are difficult times for auditors in China.

Recent months have seen a series of accounting scandals at Chinese companies including several that are listed overseas, some of them audited by the Big Four global firms—Deloitte, Ernst & Young, PricewaterhouseCoopers and KPMG. Meanwhile, regulators in the U.S. are asking tough questions about oversight of auditors’ work in China. And at the same time, some Chinese officials have called for a homegrown accounting firm to take on the Big Four.

Benny Liu, who heads up the audit practice at KPMG China, says partners at the firm’s offices around the world have a better understanding of the potential—and the challenges—in China than ever before.

“You have to fight hard for business, not just with the Big Four but also local firms,” says Mr. Liu.

He spoke to The Wall Street Journal’s Duncan Mavin in Hong Kong. The following interview has been edited.

WSJ: There’s a perception at the moment that fraud and corruption and accounting scandals are rife in China. How do you deal with that?

Mr. Liu: We have rigorous risk-management procedures in terms of accepting clients. We evaluate them every year. We also classify our clients into different categories—for blue chips in Hong Kong that we’ve known for 30 years obviously the evaluation process will not be as rigorous as for a privately held business owned by a rich guy in China. In terms of the audit process, procedures will be more robust. Also, we come across new findings from not just our clients but we hear in the news about other companies gone wrong and we do a lot of training, put out case studies, make sure our staff are aware of the current environment and how to look for red flags. It’s challenging. That’s why our risk-management department is really huge now.

WSJ: Have the recent scandals and allegations against Chinese companies about accounting irregularities led to more questions from KPMG overseas about operations in China?

Mr. Liu: No, actually. Our global risk people are very interested. In terms of the other [executives], obviously they’re asking if all Chinese companies are bad. Obviously they’re concerned. From their perspective, they want to know how we’re going to manage the situation. A lot of these companies are in the U.S. market, and now all of a sudden because of some short-seller attack and allegations, a lot of companies have some problems. So our global risk people are interested in what sort of position we have to prevent something big happening to our company as a whole and our brand name.

WSJ: How do auditing standards stack up in China?

Mr. Liu: Auditing standards are very similar to international standards, however, in certain instances, there are more specific requirements to meet Chinese standards. For example, China’s standards require bank confirmations for all bank balances. While it is usually practiced, it is not a specific requirement in the case of international auditing standards. The regulator also interprets the standards differently. International firms for example, usually rely on testing controls so that your substantive testing is less. The Chinese regulator will expect a more substantive approach.

WSJ: What are the main challenges to growing the business in China?

Mr. Liu: Attracting people is key. Before the financial crisis, graduates seemed to think professional accountancy firms were a place they wanted to go, particularly the Big Four firms. The money is good, the career progression is good. But the financial crisis changed the scene—the Big Four firms and local firms tried to cut headcount and salary increases were not as good as before. Afterwards, salaries rose in China, and the professional accountancy firms didn’t seem as attractive as before. Our profession in China has long hours—a lot of young people can’t stand that. Retaining people is the same—qualified people with four or five years experience have a lot of options outside where salaries can be a lot better, in particular for those with financial services experience.

WSJ: How do you compete?

Mr. Liu: We don’t compete with banks any more. We start staff off on a reasonable salary, but as they progress it increases much higher. At banks or other big companies, the entry salary could be much higher but it’s harder to get a big increase. Some young people don’t think long-term. An offer of a few thousand renminbi difference could be big, in particular in big cities, where fewer students live with their family and the cost of living is not cheap.

Work-life balance is very important now. Before the financial crisis, they wanted money and career. Now, the same age group wants work-life balance, and career doesn’t seem to be the top priority.

WSJ: Are local Chinese firms a real challenge to the Big Four yet?

Mr. Liu: It’s a definite Chinese strategy to make local firms bigger, stronger, so they can compete with the Big Four. A few large firms are getting close, but we’re still quite ahead. There are a lot of audit tenders that these firms are participating in—they win some, because on pricing they can go lower than us. It’s a challenge because some potential clients don’t see the difference. If it’s a simple statutory audit, from some of the companies’ point of view, do they really need a Big Four firm? We’ve got an advantage on [international clients.] But it’s my understanding the Chinese audit firms have set up offices in places like Africa, or set up liaisons with local firms [in other countries]. Who knows, in 10 years there could be a lot of Chinese firms outside China.

By ANSGAR SICKERT

You might be forgiven for not noticing that a trade delegation from the European Union recently descended upon India’s capital to give the attempts of concluding a comprehensive free-trade agreement a much-needed boost. Perhaps because it was around the same time as the world leaders’ forum in Davos, India-EU free trade negotiations flew firmly below the radar screen of the world’s media.

Ansgar Sickert

The recent visit by the EU’s new trade negotiator Karel de Gucht was by comparison more high profile. He believes negotiations can be concluded by the end of the year if some of the remaining sticky issues can be resolved.

Over the last one and a half decades India has concluded over a dozen free trade agreements with countries or regional blocks such as ASEAN, Sri Lanka and South Korea. Others with Japan and New Zealand are on the anvil.

With the WTO’s Doha round still in a state of hibernation this flurry of bilateral deals is perhaps not surprising. The EU is also no sloth in strengthening its trade ties and has concluded trade agreements with the 78-member group Africa, Caribbean and Pacific countries, the Gulf Cooperation Council, South Africa, Mexico, Chile, South Korea. More with India, ASEAN and Mercosur are in the pipeline.

With many economists speculating that a double-dip recession is around the corner, trade liberalization could give a much needed fillip to the global economy. As it is India’s most important trading partner, a bilateral agreement with the EU would undoubtedly represent a beacon for both economies.

Negotiations between the two partners started in June, 2007 and looked promising at first but subsequently lost steam. Last November’s annual India-EU Business Summit in New Delhi was a turning point. Leaders on both sides seemed to rediscover their enthusiasm, declaring that a deal should be concluded by the end of this year.

This is to be strongly welcomed not just by the business communities in India and the EU but the world over. By definition bilateral agreements can be far more ambitious and far reaching than multi-lateral talks involving many countries.

The current WTO negotiations were kicked off in November, 2001 and seek to address a host of sensitive issues such as reductions in tariff and non-tariff measures, agriculture, labor, environment, transparency, services and intellectual property. It is easy to see why a conclusion of the WTO’s Doha round remains elusive.

The EU’s attempt to include politically-sensitive issues in its FTA negotiations with India has led to considerable resistance from the New Delhi which views climate change, intellectual property rights or child-labor as “extraneous” non-trade issues that should be tackled elsewhere.

Whether such issues should indeed be part of bilateral free trade negotiations is debatable, particularly since they are already discussed in many other multilateral forums. However with growing concern amongst the European electorate about loosing jobs to Indian outsourcing companies, the EU cannot but deal with its own internal political constraints. The EU has such clauses in all its bilateral FTAs and without them any agreement is likely to get rejected by the European Parliament.

India also has many areas where it needs to tread carefully due to domestic political sensitivities. With serious moral concerns in parts of India’s body politic and society, reducing import tariffs, lowering internal levies and easing restrictions on alcoholic beverage imports will take some political courage.

Clearly the newly found momentum should be seized to bring the negotiations to a successful conclusion. Both sides recognize that an awful lot of work remains to be done before the year is up. Trade organizations such as the European Business Group in India, FICCI and CII have been lobbying to push governments towards a comprehensive agreement.

The EU and India have set an ambitious goal of more than doubling their bilateral trade to $200 billion dollars in the next four years if a free trade deal is concluded. That would be an impressive increase in trade from the $82 billion achieved in the fiscal year ended March 31, 2009.

India should be less concerned about the inclusion of “extraneous” issues in the FTA as most of the provisions are in any case either covered by domestic legislation or non-binding.

But more than propping up flagging economic growth and international trade statistics in Europe and India, a successful FTA might even help reenergize the WTO talks.

—Ansgar Sickert is the New Delhi Based managing director of Fraport India and a council member of the European Business Group in India.

Por SARA SCHAEFER MUÑOZ, de Londres

European Pressphoto Agency

Moedas da dracma grega, que foram substituídas pelo euro em 2002

Com a intensificação da crise da dívida da zona do euro nos últimos meses, pelo menos dois bancos multinacionais tomaram medidas para instalar sistemas eletrônicos de reserva capazes de lidar com as antigas moedas europeias, como a dracma grega, o escudo português e a lira italiana.

Mas fazer isso, como os bancos logo descobriram, não é tão fácil em um mundo financeiro que está tentando, ao mesmo tempo, mostrar confiança no debilitado euro e — por precaução — fazer planos para o possível desaparecimento da moeda comum.

Executivos de tecnologia nesses bancos contataram a Swift, cooperativa sediada na Bélgica que administra a rede utilizada nas transações financeiras internacionais, disseram pessoas a par do assunto. Os bancos queriam o apoio tecnológico da Swift e os códigos das várias moedas que seriam necessários para criar sistemas de becape.

Mas a Swift se recusou a dar algumas informações para esses planos e não revelou se os antigos códigos poderiam ser usados no sistema, disseram as pessoas a par do assunto.

Isso ocorre, em parte, porque os diretores da cooperativa temiam que divulgar as informações poderia alimentar mais dúvidas e instabilidade na zona do euro, segundo essas pessoas.

É um revés relativamente pequeno para os bancos, que agora estudam as mais diversas possibilidades, desde contratos de empréstimos até a segurança dos funcionários de suas filiais, caso algum país decida se retirar do euro.

Mas é um exemplo dos obstáculos que os políticos, bancos e empresas europeias têm que enfrentar à medida que tentam se preparar para uma quebra da zona euro e, ao mesmo tempo, aplacar os temores do mercado.

“Assim que você começa a planejar para essa eventualidade [...] isso pode gerar conclusões precipitadas”, disse Alastair Newton, analista político sênior da Nomura PLC. “Mas se as coisas derem errado e você não tiver um plano de contingência pronto, você estará em apuros.”

O planejamento ocorre em um momento em que a ideia de uma ruptura da zona do euro ainda é mal vista por muitos.

O presidente do Banco Central Europeu, Mario Draghi, disse recentemente que essas especulações sobre o fim do euro são “mórbidas”.

Mas tanto governos como empresas e firmas financeiras vêm intensificando discretamente seus planos, nas últimas semanas, para se preparar para a pior das hipóteses.

A Autoridade dos Serviços Financeiros britânica, agência de fiscalização dos bancos do Reino Unido, enviou cartas aos principais bancos do país pedindo informações atualizadas sobre seu nível de preparação. Um diálogo semelhante já foi iniciado entre os bancos e as agências reguladoras nos Estados Unidos nas últimas semanas, disseram pessoas a par do assunto.

O Ministério das Relações Exteriores do Reino Unido já começou a fazer planos de contingência para evacuar cidadãos britânicos da Espanha e Portugal, caso haja um colapso bancário nesses países, disse uma pessoa a par do assunto. Mostrando preocupação em não causar pânico, um porta-voz não quis dar nenhum detalhe, dizendo apenas que o Ministério está sempre se preparando para todo tipo de eventualidade.

Em outro sinal dos temores crescentes, algumas multinacionais com atividades na Grécia e em outros países no sul da Europa começaram a tirar seu dinheiro da Grécia quase diariamente — em comparação com o intervalo normal de duas semanas —, como precaução contra uma súbita desvalorização caso alguma moeda seja ressuscitada, disse um banqueiro a par das atividades das empresas.

Preparar seus sistemas para lidar com as antigas moedas europeias é uma das medidas que os bancos estão tomando para se proteger contra grandes interrupções em suas atividades, caso algum país saia de repente da zona do euro.

As moedas têm códigos de três letras — tais como USD para o dólar americano — que os bancos usam em uma ampla gama de transações financeiras, de operações complexas feitas por bancos de investimentos até básicas transferências de recursos. Os códigos são determinados pela Organização Internacional para Padronização, com sede em Genebra, e usados pela Swift, cooperativa que formata e manda as ordens de pagamentos para cerca de 10.000 instituições em mais de 200 países.

Uma dúvida que os bancos têm, e que até agora não conseguiram esclarecer, é se os códigos que deixaram de ser usados, como GRD para a dracma grega, valerão no sistema atual da Swift.

Um porta-voz da Swift disse que a empresa está preparada para tomar quaisquer medidas necessárias para manter as operações normais, mas que “não é apropriado neste momento que a Swift comente sobre questões especificamente associadas à zona do euro”.

Se uma nova moeda surge, ela fica a cargo da agência de manutenção afiliada à Organização Internacional para Padronização. Um porta-voz dessa agência, a SIX Interbank Clearing Ltd., disse que o grupo tem vários projetos para “cenários calamitosos”, mas que os planos de contingência para tais situações até o momento são sigilosos.

Uma vez que um banco saiba qual é o código, será relativamente simples criar um programa para aquela nova moeda, de acordo com especialistas em tecnologia. O banco precisará, então, ajustar sua infraestrutura para o volume esperado e garantir que os dados relativos aos bancos correspondentes estejam corretos. O sistemas precisarão, então, ser modificados e testados, disse um executivo do setor de tecnologia de um banco em Londres, um processo que leva de uma a duas semanas.

Por LAUREN POLLOCK y MIA LAMAR

Diamond Foods Inc. y Procter & Gamble Co. terminaron de mutuo acuerdo la propuesta de adquisición de Pringles por parte de la primera, y Kellogg Co., por su parte, presentó una oferta por US$2.700 millones.

En abril, Diamond había acordado pagar US$2.350 millones para adquirir las operaciones de Pringles, pero el acuerdo se desmoronó tras una investigación interna en Diamond que encontró que la firma había contabilizado incorrectamente pagos a los productores de nueces.

Por su parte, Kellogg estimó que la compra de Pringles sumará alrededor de 8 centavos a 10 centavos por acción a su ganancia de 2012, antes de contabilizar los costos de la transacción. Si se incluyen los costos vinculados al acuerdo, Kellogg señaló que la operación probablemente diluirá la ganancia en entre 11 y 16 centavos por acción.

Kellogg espera que su deuda en circulación aumente en aproximadamente US$2.000 millones, y, como resultado, planea limitar su programa de recompra de acciones. Los costos extraordinarios del acuerdo fueron estimados en entre US$160 millones y US$180 millones. Del total, ee espera que entre US$70 millones y US$90 millones sean reconocidos en 2012.

Las acciones de Kellogg subían un 4,4% a US$52,50 en las negociaciones previas a la apertura oficial del mercado, tras cerrar el martes en US$50,30. Las acciones de Procter & Gamble cerraron la sesión previa en US$64,48 y registraban pocos cambios. Las acciones de Diamond Foods, por su parte, subían un 2,9% a US$22,95, tras cerrar el martes en US$22,30.

Por RIVA FROYMOVICH

BRUSELAS (EFE Dow Jones)–Los ministros de Finanzas de la eurozona no se reunirán como se esperaba el miércoles en Bruselas, ya que es necesario más trabajo técnico entre la troika y Grecia antes de que el país reciba su segundo rescate.

“Con este panorama, he decidido convocar a los ministros a una teleconferencia mañana para debatir los temas pendientes y preparar la reunión ordinaria del Eurogrupo del lunes 20 de febrero de 2012″, dijo el presidente del Eurogrupo, y primer ministro de Luxemburgo, Jean-Claude Juncker, en un comunicado.

Juncker señaló que hace falta más tiempo para que Grecia y la troika –compuesta por la Comisión Europea, el Fondo Monetario Internacional y el Banco Central Europeo– lleguen a un acuerdo “en un conjunto de áreas”, como el cierre del agujero fiscal de EUR325 millones en 2012 y el análisis de la sostenibilidad de la deuda.

“Además, aún no he recibido las garantías políticas exigidas a los líderes de los partidos de la coalición griega sobre la aplicación del programa”, dijo Juncker.