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Accounting firm looks overseas for help: Sarbanes-Oxley business sparks need for extra hands

April 18, 2005

Zietsman is one of several employees of PricewaterhouseCoopers who are in the United States to temporarily help the global accounting firm complete client audit work created by the 2002 Sarbanes-Oxley corporate-accountability law.

One rule, Section 404, requires corporations to assess the internal accounting controls they have in place to ensure their financial reporting is accurate and reliable-and requires accounting firms to vouch for those controls.

Many public companies had to devote thousands of employee hours and millions of dollars to comply with the controversial new rule by the Dec. 31 deadline. Those on different fiscal years, and smaller firms, have more time.

The additional safeguards created in the wake of accounting scandals at Enron Corp., MCI WorldCom Inc. and elsewhere are taxing Big Four auditors such as New York-based PricewaterhouseCoopers. To compensate, the firm turned to an unusual source-its foreign work force-to fill the void in manpower.

"My schedule was open, and within six weeks, I was here," said Zietsman, who might be in Indianapolis until March 2006. "Our company is readily giving us away to use the exposure we've had and give it back."

To that end, her newfound knowledge of Sarbanes-Oxley should reap benefits upon her return. The South African office counts among its clients South African Breweries Ltd., parent of Milwaukee-based Miller Brewing Co. Companies that own American subsidiaries will need to comply with the stricter accounting rules by June 2006.

Because many of the firm's clients have a global reach, such as Columbus, Ind.-based Cummins Inc., accountants from here and abroad have participated in exchange programs before. But as John Quinn, managing partner of the PricewaterhouseCoopers' local office said, Section 404 turned their world upside down, as it did at many firms.

New York-based Deloitte & Touche also recruited international workers to assist on 404 work. Michael Becher, regional managing partner who oversees eight Deloitte offices, including the Indianapolis location, said the Columbus, Ohio, and Cincinnati and Pittsburgh sites all employed workers from the firm's global locations.

"It's a process that really worked out very well, and continues to work out very well," he said. "It's a good strategy."

Deloitte's local office, the city's thirdlargest accounting firm, met the additional demand created by Sarbanes-Oxley through "experienced hires" and did not host any foreign employees, Becher said.

To ramp up for the boost in business, in which the increase in client audit fees ranged from 50 percent to 100 percent, PricewaterhouseCoopers began recruiting more workers straight from college campuses. Realizing, though, that they would need a year of tutelage before they could contribute, the firm started gauging overseas interest to determine who might want to relocate to the United States.

Since last year, roughly 20 auditors from such countries as South Africa, France, England, Brazil, Germany and China have come to the Indianapolis office, the fourth-largest accounting firm in the city. Some have stayed as little as two months while others will remain up to two years. PricewaterhouseCoopers employs more than 122,000 people worldwide in 768 cities in 139 countries.

"[The foreign offices] now have a whole bunch of people who know now how business works in the United States," Quinn said, "and that's an asset."

Cummins supplied the bulk of the education, as the auditors traveled to Columbus to help prepare year-end financials for the diesel-engine manufacturer. Cummins executives declined to discuss the experience in the sensitive post-Enron climate.

To expedite the commute from Indianapolis to Columbus, the firm housed the employees in an apartment complex near Greenwood. Cindy Marsh, assurance resource manager for Pricewaterhouse-Coopers' local office who coordinated the logistics, said having them in the same location allowed them to form friendships.

The relocation has met some challenges, however. Because of time differences with the overseas offices, Marsh corresponded via e-mail to arrange arrival times. Once here, some apartment complexes refused to provide leases for less than a year. For a Muslim from South Africa, Marsh had to hunt for a butcher shop that prepared meat to accommodate her religious beliefs.

Administratively, Social Security numbers had to be secured and bank accounts established. Because the foreign workers had no credit history, they bought automobiles from the firm with interest-free loans that were paid back upon their departure, Marsh said. Driving in the United States proved daunting for some.

"We had people who drove on the opposite side of the road," she said. "They didn't want to get their rental cars because they were afraid. That was a big adjustment."

The International Center of Indianapolis helps foreign arrivals get acclimated to the city. Janet Fischer, the center's community orientation program coordinator, helped a French gentleman working at the accounting firm with everything from buying furniture for his apartment to showing him places of interest.

Fischer lauded PricewaterhouseCoopers and other companies that bring international workers to Indianapolis.

"I think the more globalization that we can see so we understand more about people from other countries, the better off we'll be," she said.

Marcos Sponchiado of Brazil arrived in February 2004 with his wife and 2-yearold daughter and is fulfilling a two-year assignment with PricewaterhouseCoopers. He had been to the United States once before in 1997 and was excited to return.

"Brazil has a lot of investments from the U.S. and Europe," Sponchiado said. "It's very important for us to have that experience to better serve our clients."

Like Zietsman, Sponchiado has traveled the country a bit and recently participated in a skiing trip to Colorado. It was his first experience on the slopes and one of the highlights of his stay, he said.

Zietsman also was part of the skiing contingent. But her first exposure to the white stuff, last December, was less pleasurable. She had never seen snow before, much less driven in it, when it took her nine hours to return from a trip to Cincinnati.

Nonetheless, she's looking forward to the remainder of the time she has in the country, despite the fact that her Afrikaan accent can make communication difficult, she said.

Sponchiado said his young daughter is learning English and may speak it better than he does. He, too, is enjoying his stay, as parts of American culture are beginning to take hold.

"There are many opportunities here," he said. "My wife loves sports. We follow the Pacers and go to a lot of their games."
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