Dabie Tsai was previously a partner with one of the Big Four accounting firms, KPMG. During Tsai’s 23 year tenure with the firm she performed in leadership roles correlated with her wide array of specialties, including US GAAP and IFRS, as well as SEC 33 and 34 Acts filings for registrants, both foreign and domestic. Her fluency in English, Spanish, and Chinese proved valuable during her international work with KPMG in the United States, Canada, Chile, and Spain.
In her most recent role at KPMG she worked as the Global Lead Audit Engagement Partner for Spain’s largest global audit client which has assets in excess of 700 billion EUR.
In both Latin America and the United States, Tsai has been a leader and participant on groups of reviewers for the Quality Performance and Compliance Program at KPMG. Additionally, she has developed and administered various national training sessions covering subject matter ranging from audit methodology down to basic, technical accounting issues.
Dabie was an audit partner with KPMB for eleven years, during which she was the lead for interactions with clients, regulators, audit committees, senior management, and internal auditors. Globally, she has successfully headed teams of up to 250 multidisciplinary professionals.
As a graduate of the KPMG-INSEAD International Banking Executive Programme, Dabie’s performance and talent have not gone unnoticed. She received KPMG’s Mentoring Award, in honor of her efforts to develop and sponsor new and promising young employees. Dabie was also the Partner Champion of the firm’s Asian Pacific Islanders Network as well as its Network of Women. She also held membership in Lead Partners Forum and the KPMG Executive Leadership Institute for Women during her tenure with the firm.
Tsai is is also highly active in her community. She is a member and the former Acting Audit Committee Chair of the Board of Directors of Kansas City Young Audiences, and the current Audit Committee Chair and member of the Board of Directors of Oxfam America.
Dabie, why do you think accounting is important?
Well, as a former Big 4 firm partner, this is like asking me if the earth is round! But seriously, I think accounting is tremendously important to any organization because it serves as the foundation for the company.
Without sound accounting policies and practices, a company wouldn’t have a solid infrastructure to build on and support its activities and operations. We see a lot of times when a start-up grows exponentially, but at some point it will be limited by its back office capability. Unless the appropriate accounting policies are put in place and there is sufficient rigor in its accounting procedures, a new company will run into operational difficulties that may limit its growth and hinder its corporate governance and its ability to provide transparent financial reporting accountability.
Even for a large, well-established company, having a current, appropriate and comprehensive set of accounting policies is critical in allowing management to measure its performance and objectives; and for different stakeholders, be they shareholders or those charged with governance, to be able to make relevant and useful decisions.
Accounting standards evolve all the time, and so does a company’s business. That is why it is important to use and leverage proper accounting as the company seeks to execute its vision and strategy.
What is a current innovation in the accounting profession and the impact that it has?
The use of big data, data & analytics (D&A), and artificial intelligence (AI) is a recent innovation that will continue to develop and revolutionize the accounting profession for years to come.
Through effective use of D&A, the profession is now better able to focus in on risk areas, be they unusual transactions or outliers from management expectations. By incorporating big data, the population of business activities that can be in scope for examination and review expands significantly.
As a matter of fact, I would say D&A is transforming how businesses operate beyond simply its impact on the accounting profession. By mining big data, companies can identify variables or concerns in its own operations not previously measured to improve performance or enhance strategy. D&A can help companies gleam valuable insights for the past, present and future, through descriptive analytics, diagnostic analytics, predictive analytics and prescriptive analytics.
Then, when you add AI to the equation, which I think we are still only at the tip of the iceberg, it will allow for an efficiency and effectiveness transformation where large amounts of information can be processed, analyzed and evaluated expeditiously while identifying potential irregularities or complexities.
Of course, this will require a new skill set on the part of the accounting professionals – more technologically savvy, and the ability to be able to interpret and translate the analysis provided into how it impacts the business.
How would you compare and contrast between traditional auditing and risk-based auditing?
Years ago, before Sarbanes-Oxley, traditional auditing was predicated almost entirely on the numbers in the ledgers. Then in the last decade and a half there has been significant strides in trying to ensure the internal control underlying a company’s financial reporting infrastructure is sound, so that it can consistently produce accurate financial reporting. But by focusing on the risks pertinent to a company’s business and operations, the auditing profession can be more relevant and astute in identifying where things matter most to the stakeholders and where a hidden error (whether as a result of a control gap, control lapse or operator blunder) may result in the largest impact. Instead of one size fits all, it is important to recognize that even within the same industry, different companies may have different risks; and these diverse risks need to be addressed using mindsets and procedures tailored to them.
Risk-based auditing also means that the auditing profession needs to understand what it is auditing, what’s specific to the company, the situation and the current environment. This allows the audit professionals to produce better and more useful audits.