Gold Magazine December 2013 - January 2014, Issue 33 | Seite 74

business consultation

Gold: Having worked in the banking sector
for many years, why do you think the main
banking institutions in Cyprus find themselves in their current situation? Did you
ever expect such a crisis?
R.C.: It was evident to me at least three years
ago that wrong decisions taken by the main
financial institutions to continue expanding at
home and abroad would lead to them experiencing very difficult times in the future. Of
course, I did not expect things to turn out to be
that bad but it was clear to me that the banks
were not properly supervised, that corporate
governance was not working properly and that
people without the adequate educational
background and the required expertise
were advancing to the highest levels. Consequently, it was inevitable that a number
of bad policy decisions would be taken and
implemented. The results of these decisions are
what we are experiencing now. With all this in
mind, I started thinking of my own exit plan.
The decision to specialize in the newest developments in the accounting profession – Financial Forensics and Business Valuation – was a
big challenge.
Gold: When did you set up your own company formed and what differentiates it from
other consultancy firms?
R.C.: RC Business Valuation & Forensic
Accounting Ltd is a very young company,
having been established in July this year, but
I’m proud to say that we have already been
able to help a number of businesses through
our services. What really differentiates us
from other accounting or consultancy firms
is the fact that we are the first company in
Cyprus to offer services in three very specialized areas. The first concerns Independent
Business Valuations which we perform to
help companies decide on the steps that are
necessary for business sustainability in this
highly turbulent economic environment. Our
firm offers tailor-made business consultation,
specialized advice and continuous business
support for comprehensive practical solutions
which ultimately increase shareholder value.
Independent business appraisals for determining how much a company is worth also play a
very important role today for a variety of other
reasons such as determining the value of intangible assets (brands, trade names, etc., in cases
of mergers and acquisitions), business strategic
planning and the maximization of shareholder
value, exit planning, financing, reorganization
& spinoffs, determining the value of minority
shareholders, liquidation & bankruptcy, damages litigation, insurance claims, determining
the value of a business in a divorce dispute, fair

value measurement, due diligence, Initial Public Offerings (IPOs), etc.
Gold: The others?
R.C.: The second is Business/Debt Restructuring. Proper business/debt restructuring and
negotiations with Banking Institutions play a
crucial role in improving business performance
and achieving business sustainability during
this ‘fragile’ period. Our approach to the issue is to make a full evaluation of our clients’
outstanding debt and explore all possible
options for refinancing and restructuring. It
is crucial for all businesses today to proceed
with a thorough analysis of their operations
and then go ahead with both business and
debt restructuring. The third service is

As happened in the US, our
leaders should focus on
finding a solution to the
real estate market as
soon as possible
Financial Forensics and Forensic Accounting.
We offer litigation support for clients, either
directly or through their lawyers, serving them
as financial consultants and/or financial experts
on complicated financial issues and damage
calculations. We also assist in financial dispute
resolutions, financial forensic investigations on
alleged financial statement misrepresentations,
management and/or employee fraud, or other
fraud investigations. At the same time, we help
clients develop a sound risk management plan
which includes Fraud Risk Management and
proper Risk Assessment. We also assist businesses in their fraud prevention, detection and
response procedures.
Gold: Although this is clearly a lot of work,
why did you decide to restrict the services
you offer to these three categories?
R.C.: Mainly for two reasons. First of all, these
are my areas of expertise and, in reality, all three
are interconnected. I strongly believe in the
specialization of the services that accountants
provide. We sometimes see accounting firms
claim that they can provide services which they
do not really have the expertise or qualified
personnel to perform in a competent manner.
This can result in poor performance and damage to both the client and the reputation of
the accounting firm. Business Valuation and
Forensic Accounting are specialties within the
accounting profession that require proper train-

74 Gold the international investment, finance & professional services magazine of cyprus

ing, education and expertise. The second reason
is my belief that Business Valuation, Forensic
Accounting and Business Consultation should
be kept separately from accounting and auditing tasks in order to avoid conflict of interest
issues. For example, auditing firms sometimes
perform business valuations for companies to
which they provide audit services, which creates
a conflict of interest that may be raised later in a
merger or acquisition case.
Gold: What was the Las Vegas conference
about?
R.C.: The conference was organised by the
AICPA (American Institute of Certified Public
Accountants) and the Chartered Accountants of
Canada and it featured various sessions relating
to Business Valuation, Business Consultation,
Financial Forensic Investigations and Forensic
Accounting. Economists and financial experts
provided the latest news and information about
the US and global economies. In addition, we
were given an opportunity to have one-on-one
meetings with the experts and the keynote
speakers who were leading professionals and
academics. Their genuine intention to assist us
was shown in the e-mails I received from several
of them afterwards in which they confirmed
their willingness to advise me on any complex
issues I come across.
Gold: Did you learn anything relating to the
present situation in Cyprus that y