global accountancy power 50 - agn international 532...jean stephens, rsm international ceo ......

www.InternationalAccountingBulletin.comDecember 2013 Issue 532

● Mandatory rotation negotiations ● EY and KPMG look to merge in Denmark

● Brazilian approval of KPMG’s acquisition of BDO firms ● UK country survey

Global Accountancy Power 50

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December 2013 y 1www.InternationalAccountingBulletin.com

Editorial Advisory BoardKevin McGrath, Crowe Horwath International CEOKevin Arnold, Nexia International CEOGeoff Barnes, Baker Tilly International president and CEOGraeme Gordon, Praxity executive directorStephen Jacobs, INPACT International presidentJon Lisby, Kreston International executive directorJames Mendelssohn, MSI Global Alliance, executive chairman Christian Mouillon, EY global vice-chair, assuranceEd Nusbaum, Grant Thornton International CEOMichael Reiss von Filski, Geneva Group International CEOLiza Robbins, Morison International CEOMartin van Roekel, BDO International CEOJean Stephens, RSM International CEORobert Tautges, HLB International CEOPauline Wallace, PwC head of public policy and regulatory affairs

NEWS

CouNTRy SuRvEy 15-20

Recently I was at an accounting confer-ence where, on the final day, I arrived at breakfast later than most delegates and was sharing a table with some of the delegates’ companions.

One of the first questions I was asked by the two women sitting opposite me, both about 25 years my senior, was whose wife I was. I explained that I’d been one of the speakers at the conference the previous day and they seemed somewhat surprised. They went on to say how, since graduating from university, both had decided against trying to have it all and dedicated their time to raising a family.

I didn’t feel offended or shocked by their surprise, or about the career choices they had made. However it did make me think that perhaps the very slow progress in get-ting women into top jobs does, more or less, boil down to the perceptions and values held by the generation currently occupying most of the management and middle-management roles in the corporate food chain.

While the voices at the top of most accounting and financial institutions are very encouraging on the subject of diversity, there are still many throughout different organisations who hold more conservative views towards female leaders or colleagues and team members of different races, sexual orientation or backgrounds to their own.

Speaking to KPMG UK’s senior partner and chairman Simon Collins for the UK Sur-vey (see pages 15-20) he recalled the recent LGBT summit the firm hosted in its London offices where, in one of the sessions, the discussions turned to how, despite having a positive and encouraging tone at the top, you still have to get through the “permafrost layer of middle-management, which can be much more conservative”.

He emphasised that those managers are

not bad people, but they have narrower “metrics”, which indicates that more needs to be done about awareness of such issues.

And those matrices are something many people have encountered at some point or another in their careers, and sometimes such encounters and prejudice can have an effect on an employee’s confidence and future career development.

Luckily many accounting firms have put increasing diversity at the core of their cor-porate strategy. However, still, in 2013 you only need to look at our Global Accounting Power 50 list (see pages 6 to 14) to see the profile of top players in the profession, who are mostly white men. Only eight women made it into our Power 50, up by one from 2012. All the people on the list are of course very deserving of their spot and many have dedicated their life’s work to the profession, and some are undoubtedly great champions of increasing diversity. But the profession still appears to have some way to go before it can be perceived as diverse and representa-tive of society’s demographics.

Perhaps as the generations slowly change there will be a noticeable leap forward and people will stop talking about women trying to have it all, but enable them to have all they can have, naturally and professionally, just like their male peers.

All the best for 2014Another year has rushed by and the Christ-mas break is upon us again. The team at the International Accounting Bulletin and The Accountant (Ana, Carlos, Vincent and Jonathan) would all like to wish you all the best for the festive season and a very suc-cessful and prosperous New Year.

Ana [email protected]

FEATuRES 06-14

CoMMENT 05

02-04

CoNTENTS

■ Brazilian competition authorities approve KPMG’s acquisition of BDO firms.

■ EY and KPMG look to merge in Denmark.

05: GALE CRoSLEy

Gale Crosley, a US CPA and accounting firm consultant presents her views on strategic growth in the second part of a commentary about contemporary growth challenges in the industry.

o6-14: GLoBAL ACCouNTANCy PoWER 50

For a third year in a row the International Accounting Bulletin and its sister title The Accountant bring you the list of the 50 most powerful people in the profession as chosen by the profession and an expert judging panel from around the world.

15-20: uK

This year the so-called ‘new normal’ went beyond simply adjusting to changed business conditions and now includes adhering to new audit reten-dering rules following the Competition Commission and Financial Reporting Council investigations and increased consolidation in the mid-tier. IAB investigates growth drivers and chal-lenges as the UK economy creeps out of recession

Trying to have it all

EdiToR’S LETTERInternational Accounting Bulletin

Give your students a business perspective of the world of accounting. Give your students access to content they can trust. Give your students the edge. Subscribe to The Accountant

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A subscription to The Accountant is the ideal accompaniment to an accountancy course of study. Including exclusive features and interviews with major figures in the accountancy sector, The Accountant will help your students to understand the real-world implications of the theory they are learning, and help improve their employability in a competitive jobs market. A weekly newswire gives you regular updates of all the big stories, while IP access means students can view our content anywhere with access to the student portal.

Subscribe to The Accountant for: • IPaccesstoourcontent.Soyourstudentscanaccessour

content campus-wide with one login

• Contentyoucantrust.Wehave125yearsofexperiencedelivering accountancy news.

• Trulyglobalanalysis.Wecoverarangeofstoriesfromaroundthe world, so your students get a wide perspective of the sector.

SIGN UP FOR THE FREE NEWSWIREGet free weekly updates and free content. Sign up here:

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DON’T mISS OUT. Subscribe to The Accountant today. Contact our subscriptions team on +44(0)20 7563 5688 or email us at [email protected] to find out more.

2 y December 2013 www.InternationalAccountingBulletin.com

NEWS International Accounting BulletinRouNd-uP

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Join our online community

IAB oNLiNE – dECEMBER Top 5 articlesEY and KPMG look to merge in Denmark

Brazilian competition authorities approve KPMG acquisition of BDO firms

The clock is ticking for EU audit reform

Arthur Andersen penalty mistake: Michael Oxley

BDO global revenues increase 7% with more M&A expected

Most retweeted articleBDO global revenues increase 7% with more M&A expected

Read in 141 countries

UK 28%

US 16%

India 9%

Singapore 9%

Norway 5%

Other 33%

uK

Bdo uK sees first benefits of mergerBDO UK revenues were up 10% to

£312m in the year to 30 September

2013 with 20% growth being

projected for the current fiscal year.

Underlying operating profit

increased by 6% to £55m and

average profit per equity partner

remained flat at £240,000.

BDO UK and PKF UK finalised

their merger in April this

year with the deal increasing

BDO UK’s staff by 40%.

Audit revenues increased by 16%

to £111m, tax by 8% to £86m and

advisory by 8% to £115m.

uS

Arthur Andersen penalty mistake: Michael oxleyThe penalty did not fit the crime

in the case of Arthur Andersen,

according to former Republican

Congressman Michael Oxley, one

of the two main architects of the

Sarbanes-Oxley Act 2002 (SOX).

Speaking to the IAB sister title The

Accountant more than a decade after

SOX in an exclusive interview, Oxley

said: “Without a doubt the death

penalty for Arthur Andersen was the

worst mistake.”

“It was a political decision made by

the Bush administration without

really thinking it through. They could

have restructured the partnership

to make it work better and more

openly,” he said.

“But what it did was to eliminate a

major competitor in the field, which

meant that by definition of supply

and demand, the cost of accounting

services was bound to go up.”

Oxley said many blamed the

increase in cost of compliance and

services on SOX, “but a lot had also

to do with the fact that you went

from a Big Five market to a Big

Four by the stroke of a pen by the

Justice Department.

“The Justice Department brought

criminal action against Arthur

=the end of the firm; it folded

about a week later.”

That was a “death penalty” he said,

for which partners around the

country, who had nothing to do with

the scandal, ended unemployed.

Arthur Andersen collapsed in 2002

following criticism of its work as

Enron auditor and after being

convicted of obstruction of justice

for shredding documents related to

its audit of Enron.

uS

PCAoB to reconsider engagement partner disclosureIn order to increase transparency

into audits the US Public Company

Accounting Oversight Board

(PCAOB) has re-proposed changes

that would require the disclosure

of the audit engagement partner in

the auditor’s report.

Currently audits only disclose the

name of the firm that issues the

auditor’s report, so that information

about other firms and individuals

participating in the audit is

unknown to investors and other

users of the report.

The proposal by the PCAOB also

asks for the names, locations

and extent of the participation of

other individuals not employed

by the auditor who performed

procedures on the audit.

The PCAOB is re-proposing the

amendments to seek additional

comment on: the usefulness of the

information that would be required

to be disclosed, the potential costs

the re-proposed amendments

might impose, and whether the

re-proposed amendments would

have any effect on competition.

GLoBAL

CSR disclosure increasingAlmost one-third of businesses

are disclosing their CSR and

sustainability information,

according to a global survey in

the quarterly Grant Thornton

International Business Report.

It found 31% of surveyed businesses

globally were reporting CSR

information in their financial

reports or in separate reports, up 6%

from two years ago. The survey also

found 57% of businesses believe CSR

information should be reported, an

increase of 13% from two years ago.

NEWS RouNd-uP

MovERS & ShAKERS

RSM international uS member firm McGladrey has appointed Craig Radke as chairman of the board replacing Roger hendren.

Radke has been a partner at the firm for 37 years and is regional assurance leader of McGladrey’s southeast region and private equity industry team leader for Carolina.

Deloitte has appointed 55

partners, principals and directors

in the Middle East and the

network’s global chairman Steve Almond has identified the region as a key strategic market.

The 55 staff were appointed during Deloitte Middle East’s annual partners meeting which took place in November in Dubai.

Richard Payette (pictured) has been appointed as chief executive for Bdo’s Americas region,

becoming a member of the company’s global leadership team and chairman of the

Americas Board.he has been with Bdo Canada since 2010 as a member of the national management team

and is responsible for the firm’s

development through M&A activities. he will continue that role part-time.


NEWSInternational Accounting Bulletin ANALySiS/FiRM MovEMENTS

Kreston international has added

Chilean firm Canales Consultores to

its network.

The Santiago-based three-

partner firm with 15 staff has a

predominantly international client

base and is focused largely on

serving the needs of SMEs.

BDO has added former PKF

International Fiji member firm to its

network, effective 1 December 2013.

The firm formerly known as G Lal

& Co, now BDO Fiji, was established

in 1970 and has 72 partners and staff

under the management of managing

partners Nalin Patel and Pradeep

Patel.

Nexia international has added to its

network two firms in Europe, Group

y and Consultativo, and two firms

in the Caribbean, Cayman National

Trust and Cochinamogulos.

HLB International has added South

African firm Certified Master Auditors

and Armenian firm AMH Audit to its

network.

FirmMovements

EuRoPE

Euro horse trading on mandatory rotation and restrictions on non-audit servicesThe first few days of December saw plenty of whispering in the corridors of EU insti-tutions, as behind closed doors trialogue negotiations on EU audit reform took place between representatives of the European Parliament (EP), the Council of the Euro-pean Union (Council) and the European Commission.

Rumours of an almost done deal which would see the introduction of mandatory audit rotation were shattered by the cancel-lation of a meeting scheduled for 5 Decem-ber. The EP said it cancelled the meeting due to a lack of agreement between the EP and Council.

Despite a temporary deadlock the Coun-cil told the International Accounting Bulle-tin that the next round of negotiations are to take place on the 16 December with the Council hoping it will be the “final trialogue”.

As this magazine went to press before this date, we tried to establish the state of play prior to this meeting, as doubts were already emerging about whether it will take place at all before the New Year.

Federation of European Accountants chief executive officer Olivier Boutellis-Taft told the IAB he was concerned the three parties will rush into an agreement due to what he called “negotiating fatigue” around the meeting table.“It’s clear they are trying to agree as soon

as possible. This is both welcome and dan-gerous,” he said. “There’s a risk due to

time and political pressure that people start agreeing on something for the sake of agree-ing on something.”

As previously reported in the IAB the Lithuanian presidency of the European Council is coming to an end, and parlia-mentary elections taking place next year could postpone the reform indefinitely. The main issue, Boutellis-Taft explained, is that because the three parties “don’t agree on the fundamentals they start horse trading and brokering a deal, and this always leads to the wrong kind of deal”.

The two main points of disagreement among the negotiating parties are around mandatory audit rotation and the prohibi-tion of non-audit services to audit clients.

Boutellis-Taft said there’s a consensus that audit rotation will become a reality in Europe, but he’s anxious that in order to reach agreement the regulation will set the rotation period as a maximum, leaving the freedom to choose the term of the rotation to the member states.“This means we will have different rota-

tion periods for different jurisdictions across Europe and that can only be very detrimen-tal to the internal market,” he said. “It’s like using the regulation to disharmonise the internal market, which will be completely impractical for businesses.“The second topic of disagreement is about

further restrictions on accounting firms providing non-audit services to audit clients.

“That is more important to me than rotation as it will create a massive admin-istrative burden for firms and their cli-ents,” Boutellis-Taft said.

He told the IAB that all parties had agreed on the concept of a blacklist of services that shouldn’t be offered to audit clients. How-ever the EP has been pushing to align such a list with international standards, while the Council was in favour of a European list with each country having the right to add to the list. “So we’re at risk of having 28 differ-ent lists,” Boutellis-Taft said.

The private nature of the trialogue negoti-ations has led to many rumours and suppo-sitions in the past month. At the time of this publication going to press, what seems clear is that if there is reform, mandatory audit rotation and further restrictions on non-audit services to audit clients will make their way into European regulation, although the ‘when and how’ remain uncertain.

Whether the reform becomes a reality or not, the debate which has now been going on for three years is coming to an end, to the great satisfaction of businesses. As Bou-tellis-Taft explained: “We’ve spent enough time on the discussion and it’s time to agree.

“It has had a very negative impact because it has led to postponing a number of invest-ment and recruitment decisions. It’s time to relieve the profession and businesses from the uncertainties that all this discussion is creating.” <


NEWS International Accounting BulletinANALySiS

BRAziL

Brazilian competition authorities approve KPMG acquisition of BDO firmsThe Brazilian Competition Authority (CADE) has approved KPMG’s acquisition of BDO Auditores Independentes and BDO Consultores in Brazil, two years after the deal was first announced and questions were raised over the effects such a deal might have on audit market concentration.

As a result of its investigation the CADE imposed some restrictions on KPMG Brazil and issued recommendations for the rest of the Big Four.

The remedies for KPMG include a restric-tion on acquiring any auditing firm in Bra-zil with clients with revenues of BRL300m ($131m) or more a year, for a period of two years. Once this period is over, in the follow-ing two years KPMG will have to inform the CADE of any acquisition of firms in Brazil with clients generating more than BRL350m in revenues.

CADE adviser Eduardo Pontual Ribeiro, who handled the case, said this measure

is aimed at averting a concentration in the audit market.

Ribeiro also recommended the superin-tendent of the CADE ask the other three Big Four in Brazil – Deloitte, EY and PwC

– to notify the CADE if they undertake any similar acquisitions (firms with clients earning over BRL350m). However, for the time being, this remains only a recom-mendation.

BDO welcomed the CADE findings and said the watchdog “recognised that this action raised serious competition issues that needed a major investigation and sig-nificant remedies”.

BDO chief executive Martin van Roekel said: “It’s regrettable that the CADE was not able to identify a structural remedy that would have complemented the behavioural remedies and could have served to fully restore effective competition to the audit sector in Brazil”.

BDO global head of regulatory and public policy Noel Clehane added: “We are hope-ful that the parties concerned will comply with CADE’s proposals in order to ensure that competition in the audit sector in Brazil does not suffer any additional harm.“The proposed acquisition of the KPMG

firm in Denmark by EY shows the need for continued vigilance on the part of competition authorities everywhere to pre-vent even higher levels of concentration in the audit market”.

The case initially came about following the acquisition announcement by KPMG in 2011, after which BDO filed a complaint to the CADE in an attempt to halt the buyout.

Prior to KPMG’s acquisition of BDO’s firms in Brazil, EY acquired Terco, a former Grant Thornton International member firm in Brazil, which meant two of the largest mid-tier firms were bought out in the space of a year by two of the Big Four firms. <

dENMARK

EY looks to improve market position in Denmark with KPMG deal

EY and KPMG have signed a merger agree-ment in Denmark, with the newly merged firm looking to operate under the EY name. The deal is still subject to regulatory approval, which is likely to take months.

“This agreement draws on the comple-mentary strengths of EY and KPMG Den-mark,” EY Nordics regional managing partner Erik Mamelund said. “Until regu-latory approval is obtained it would be pre-mature to say anything further.”

Prior to the merger EY Denmark was ranked as the fif th-largest firm in the country and the merger will more than double its size, probably making it the second-largest.

EY Denmark last reported fee income of DKK615m ($111.8m), while KPMG, ranked as the third-largest firm, earned DKK1,546m in fees.

KPMG global chairman Michael Andrew commented on the move in a statement: “I can confirm that our Danish member firm has decided to leave the KPMG network. We believe a number of non-equity part-ners and staff will make a positive choice to remain with KPMG. We remain commit-

ted to having a strong, effective and focused firm in Denmark that can serve local and global clients and provide the market with the choice of at least four large professional service firms.”

KPMG is yet to announce a replacement firm and with BDO ranked as the fourth-largest firm in Denmark with revenues of DKK800m it’s likely the firm might be given an offer to move to KPMG.

BDO chief executive Martin van Roekel told the International Accounting Bul-letin that it’s an uncertain time, especially as with this deal “we are seeing one Big Four firm taking on another, which has not happened in the past few years”.

“We do realise, in a situation like this, one of the possible candidates to take over the membership of a Big Four network with-out a member would be our firm, but we are confident that BDO firms are happy with BDO membership, but I wouldn’t be surprised if our firm was contacted in this situation.

The Danish market has been known as fiercely competitive, with PwC merging with Grant Thornton Denmark in 2011, followed by Grant Thornton adding PKF Kresten Foged as its member. Also in 2011 Baker Tilly Denmark acquired KPMG Randers, which was one of KPMG’s opera-tions in the country. <

DenmArk’s top 5 networks

Prior to merger Post-merger

Firm Revenue (dKKm) Firm Revenue (dKKm)

1 Deloitte 2,306 1 Deloitte 2,306

2 PwC 1,865 2 EY 2,161

3 KPMG 1,546 3 PwC 1,865

4 BDO 800 4 BDO 800

5 EY 615 5 RSM 160

Source: IAB


CoMMENTInternational Accounting Bulletin GALE CRoSLEy

Our world is changing. Our markets have gone through a permanent shift in the landscape over the past few years. During the global reces-

sion many accounting firms echoed a similar refrain: “This is no time to grow. We’re bare-ly hanging on as it is!” Firms became singu-larly focused on battening down the hatches and cutting expenses. They are now left questioning how to grow in a significantly more complex environment – complex due to convergence of multiple market dynamics.

Globalisation is perhaps the number one element of change. Clients the world over are leading accountants to the global mar-ketplace and we need to be prepared to deliver what they require.

A 2012 white paper by the Association of Chartered Certified Accountants (ACCA) identified the drivers of change shaping the profession over the next decade. Globalisa-tion was high on the list. In order to survive, and certainly to grow, even mid-market firms must seek a place at the international table alongside our clients.

Succession and regulatory rigourThe ageing of firm leaders is another critical factor. It’s estimated that thousands of pub-lic accountants will retire within the next decade. Most concerning is that the exiting generation has not taught the next genera-tion essential lessons in how to grow a firm.

Another driver of change is the increase in regulations and standards, especially in light of recent financial scandals and the bank-ing collapse. Hyper-regulation is a trend the world over.

As new standards or regulations emerge, accountants certainly must provide clients with awareness and oversight on compli-ance issues. But most firms remain focused on the impact of regulatory change on the delivery of their service, to the exclusion of using these changes to drive new service innovation.

To counter this, audit and tax leaders must

perceive their role as not only ensuring the quality of service delivery, but also influenc-ing the strategic direction and profitable growth of their services.

Specialisation and competitionGrowth-minded firms recognise that the days of putting up a sign and waiting for business – any business – to walk in the door are over. Successful firms specialise, proac-tively identifying gaps in services, then fill-ing them with innovative, market-leading offerings.

This is especially important in a mature industry such as ours, characterised by fierce competition and an abundance of practition-ers – more than 700,000 CPAs, and even more chartered accountants worldwide. This excess drives commoditisation of ser-vices and pricing. Specialisation is one of the best antidotes.

Communication is another powerful change agent. Many firms are embracing social media to create communities of inter-est and share thought leadership. Social media enables globalised specialisation because it gives a firm the power to attract a highly focused worldwide community of buyers.

But cutting edge firms are taking the next step, with social media becoming the centre-piece of their web presence. Traditional sites use text and photos to laud a firm’s attrib-utes, which is of little interest to most buyers who seek answers to their problems.

Top firms are delivering sites that integrate Twitter, LinkedIn, Facebook and other social media channels as the very foundation of website design. Firms that fail to see this are destined to limit social media to a bolt-on to a traditional chest-thumping discussion about the firm. Again, buyers don’t care about eye-glazing website text which looks like every other firm’s.

Growth is an increasingly sophisticated game. Firms that wish to compete must increase their knowledge and understand-

ing of the forces acting on them and on the marketplace.

Abraham Maslow, the psychologist behind the theory known as Maslow’s Hier-archy of Needs observed: “You will either step forward into growth or you will step back into safety.”

Rally your team around the goal of sus-tainable, strategic growth and turn your intentions into a winning game plan. Start with a brainstorming session. Post key words on a flip chart – globalisation, succes-sion, regulation, specialisation, competition and communication. Ask the group to envi-sion the hypothetical implications of these on the growth of the firm.

It’s more than an interesting exercise. It’s an opportunity to strategise and identify the best approaches to impact positively your future growth. <

Develop social media and get out a flip chartGale Crosley, a US CPA and accounting firm consultant presents her views on strategic growth in the second part of a commentary about contemporary growth challenges in the industry


FEATuRE International Accounting BulletinPoWER 50

Mervyn King

Nationality: South AfricanOrganisation: International Integrated Reporting Committee (IIRC)Job title: Chairman

Although King has stepped somewhat out of the integrated reporting limelight, allowing his IIRC colleague Paul Druckman to take up the baton, he remains one of the accounting profession’s most influential people. His work on corporate governance, via the King Reports on Corporate Governance, in South Africa continues to influ-ence other parts of the world and he continues to inspire the next generation through his lectures and speeches.

He told The Accountant in an exclusive interview this year that he was proud to see IR gain traction around the world including in South-East Asia where he is involved in the creation of the South East Asian Integrated Reporting Committee. He said that he had been asked to be the patron of the regional committee once it’s created but hadn’t decided yet if he will accept.

Sarah, Baroness hogg

Nationality: BritishOrganisation: UK Financial Reporting Council (FRC)Job title: Chairman

Baroness Hogg announced her decision to step down as chairman of the FRC at the end of 2013 after three years in the role and nine years in total at the regulator. In her time the FRC has reformed its structure to create a more effective and responsive organisation. In the past year, under Hogg’s chairmanship, the FRC has completed a funda-mental modernisation of UK and Irish accounting standards and overseen a step change in conduct-related activity.

Michel Barnier

Nationality: FrenchOrganisation: European Commission Job title: Internal market and services commissioner

Barnier’s ‘controversial’ European audit reform proposals introducing measures such as mandatory audit firm rotation and restrictions on non-audit services have continued to be discussed in the EU and globally. In 2013, the debate moved to its final stage as the European Council under the Lithuanian presidency, the European Commis-sion and the European Parliament began trialogue discussions. It’s expected the negotiations will see the draft and approval of a European directive as well as a regulation.

If the reform does come to fruition, Barnier will be seen as the key architect of a once-in-a-generation change to the European audit market.

top 5

GLOBAL ACCOUNTANCY POWER 50For a third year in a row the International Accounting Bulletin and its sister title The Accountant bring you the list of the 50 most powerful people in the profession as chosen by the profession and an expert judging panel from around the world. See who’s made it on the list and who’s made it to the Next 50, who might make the list next year


FEATuREInternational Accounting Bulletin PoWER 50

Warren Allen

Nationality: New ZealandOrganisation: International Federation of Accountants (IFAC)Job title: President

Warren Allen was appointed IFAC president in 2012 after serving as deputy president for the previous two years. He is an EY New Zealand partner and former president of the New Zealand Institute of Chartered Accountants (NZICA). He is one of only 10 members currently holding NZICA life membership and is regarded as one of the pioneers of a new education system for New Zealand’s chartered accountants. Allen was also instrumental in negotiating the agreement for reciprocal qualifications between the United States and New Zealand.

Sir david Tweedie

Nationality: BritishOrganisation: International Accounting Standards Board Job title: Former chairman

In August 2013 Sir David Tweedie was inducted into the prestigious Ohio State University Accounting Hall of Fame. During the ceremony he was described as a champion of integrity in international financial reporting.

He served for a decade as chairman of the International Accounting Standards Board (IASB) before acting as president of the Institute of Chartered Accountants of Scotland from April 2012 to April 2013.

Reflecting on his career in front of an audience of accounting student at the University of Edinburgh Business School in June, Tweedie said the proudest professional achievements of his career had been “sticking it to the investment banks” and seeing the IASB become a global standard-setter rather than a think tank.

Barry Melancon

Nationality: AmericanOrganisation: American Institute of Certified Public Accountants (AICPA)Job title: President and chief executive

Melancon has led AICPA since 1995, making him the longest-running chief executive officer in the institute’s 125-year history. Under his leadership, AICPA has voted to offer credits internationally, potentially allowing non-US-based accountants to gain access to AICPA credentials. The institute has also finished consulting on a reformatted ethics code in 2013.

Charles Tilley

Nationality: BritishOrganisation: Chartered Institute of Management Accountants (CIMA)Job title: Chief executive

Tilley has continued CIMA’s expansion of close international working partner-

ships, with agreements signed including those with The Hong Kong Institute of CPAs and a renewed agreement with CPA Australia.

The past 12 months have also seen CIMA’s total membership break the 200,000 number, 91,000 of whom have also taken up CIMA’s year-old Chartered Global Management Accountant (CGMA) designation, run in conjunction with the American Insti-tute of Certified Public Accountants.

Christine Lagard

Nationality: FrenchOrganisation: International Monetary Fund (IMF)Position: Managing director

The first female head of the IMF takes her place in the Power 50 for the first time. Prior to the IMF, Lagard held a

number of roles in the French government, including time as trade minister and minister of finance. Since being elected in July 2011, Lagard has had to deal with the continuing eco-nomic woes of much of the world, particularly the euro crisis, and the IMF has also recommended an independent audit of Ukrainian banks.

top 20



8 y www.InternationalAccountingBulletin.com

hans hoogervorst

Nationality: Dutch

Organisation: International Accounting Standards Board (IASB)

Job title: Chairman

Hoogervorst spent 2013 continuing his mission as head of the IASB attempting to create and

promote a single global accounting language. Although the attempted IASB and FASB convergence

on lease accounting has moved slowly, the IASB has signed a memorandum of understanding with

the IIRC, and hedge accounting has seen rapid progress. Both insurance contract accounting and

the IASB’s conceptual framework have also gone through consultation periods during the year.

helen Brand

Nationality: British

Organisation: Association of Chartered Certified Accountants (ACCA)

Job title: Chief executive

Brand, who has been ACCA chief executive since September 2008, has continued the institute’s

drive for better accounting education with the release of its inaugural competency framework.

Although a proposed mutual recognition with the US Institute of Management Accountants did

not ultimately work out, ACCA was able to prepare its annual reports along the lines of the draft

integrated reporting framework <IR> for the second year, as the institute continues to lead the way

in this regard.

Steven Maijoor

Nationality: DutchOrganisation: European Securities and Markets Authority (ESMA)Job title: Chairman

Maijoor was first appointed as chair-man of ESMA in 2011. Under his

leadership ESMA ran a consultation period in 2013 to revise the standards on the enforcement of financial information dis-closed by listed companies. This was followed in November by Maijoor describing IFRS and IAS 36 enforcement a priority for the near future.

Wolfgang Schäuble

Nationality: German

Organisation: German Ministry of Finance

Job title: Finance Minister

Having played a central role in the reunification of Germany dur-

ing 1989-1990 as chief of staff and interior minister, Schäuble has

remained relevant up to today. Now 71 years old, the German

finance minister is playing a pivotal role in trying to resolve the

euro crisis that has blighted the continent, and is also playing a

key role in creating the framework for a post-crisis world, in order

to help ensure it doesn’t happen again.

Steve Almond

Nationality: BritishOrganisation: DeloitteJob title: Global chairman

Chairman of Deloitte since 2011, Almond oversaw global growth of 3.5% in the past fiscal year and, for

the second time in the past three years, Deloitte overtook PwC as the largest global network.

Almond is also managing partner of international markets at Deloitte UK, and chairman of Deloitte CIS and Deloitte AG (Switzerland).

Martin van Roekel

Nationality: DutchOrganisation: BDO InternationalJob title: Chief executive officer

Under van Roekel’s leadership, BDO grew 7% globally in 2013 to $6.4bn revenue, with revenues up in every

region. Roekel credits half the growth to organic growth and half to M&A. Some of the most notable M&As included a merger with PKF UK, adding almost 3,500 people to BDO UK, and a number of new firms in the US. Roekel’s ambitions is to continue to grow the network by M&A and organic growth.



Chen yugui

Nationality: ChineseOrganisation: Chinese Institute of Certified Public Accountants (CICPA)Job title: Deputy president and secretary general

As deputy president and secretary general of CICPA, Chen has continued to foster domestic growth and to look abroad. The creation of the institute’s Brand Working Group points to Chinese ambitions to promote their brands abroad, while the creation and growth of native Chinese firms such as Ruihua, shows the appetite of firms to become global players.

ian Ball

Nationality: New ZealandOrganisation: Chartered Institute of Public Finance and Accountancy (CIPFA)Job title: Chairman

After 10 years as CEO, Ball stepped down from International Federation of Accountants in March 2013, only to reappear as chairman of CIPFA in September. Upon taking his role, Ball said he relished the opportunity to promote reform following the sovereign debt crisis. He was also awarded the 2013 IAB Life Achievement Award.

Paul druckman

Nationality: BritishOrganisation: International Integrated Reporting Committee (IIRC)Job title: Chief executive

Under Druckman’s leadership, integrat-ed reporting has continued its gradual advance across the globe. In December,

the IIRC hit a major milestone with the release of the world’s first-ever integrated reporting framework. The year also saw the German and Russian stock exchanges both move forward with IR in their countries, while the IIRC also signed a memorandum of understanding with the International Accounting Standards Board and the Global Reporting Initiative.

Jean Stephens

Nationality: US Organisation: RSM InternationalJob title: Chief executive

Having moved from the US to the UK, Jean Stephens was made RSM’s chief executive in 2006, a position she con-tinues to hold.

Although 2013 saw the network lose its UK firm Tenon to Baker Tilly UK, it also added a number of firms in countries including France, Poland, and US member firm McGladery also expanded. RSM has been making important steps towards being an integrated global network with the intuitive RSM World Day winning the 2013 IAB Editor’s Special Award.

Kevin McGrath

Nationality: USOrganisation: Crowe Horwath InternationalJob title: Chief executive officer

McGrath has just finished his first year as chief executive officer of Crowe Horwath International, following 36 years at the network. Crowe Horwath International was ranked the ninth-biggest international network in the most recent IAB World Survey.

Cindy Fornelli

Nationality: USOrganisation: US Center for Audit Quality (CAQ)Job title: Executive director

As executive director of the CAQ, an organisation responsible for investor confidence, Fornelli has also been a guest speaker on a number of occasions for business community events and for media outlets. As well as serving as executive director for CAQ, Fornelli also serves as a member of the Financial Accounting Standards Advisory Council, responsible for advising the US Financial Accounting Standards Board.



Albert Ng

Nationality: ChineseOrganisation: EY ChinaJob title: Greater China regional managing partner

Albert Ng is EY’s Greater China regional managing partner and also represents the emerging markets on the global executive. Ng has 30 years’ experience of account-ing in China. He’s been active in provid-ing business consultation to multinational companies investing in China. He has been an advisor to the advisory council of the Mayor of Shanghai since 1995 and was presented with a Magnolia Gold Award for his contribution to the development of the city of Shanghai.

dennis Nally

Nationality: USOrganisation: PwC Job title: Global chairman

Nally has served as PwC global chairman since 2009. He is a frequent speaker and guest lecturer on issues affecting the professional services profession and the global capital market. Very much involved in PwC’s corporate responsibility efforts, he is the firm’s representative to the United Nations Global Compact.

Edward Nusbaum

Nationality: USOrganisation: Grant Thornton International Job title: Chief executive

In the past year, Nusbaum, who has been international chief exec-utive since 2010, has continued to grow the membership of the network adding firms in Japan, Italy, Paraguay, Bangladesh and Ethiopia. He has also helped steer the US and UK firms towards revenue increases, which is indicative of what is likely to be growth on an international level when the network issues its annual results.

James doty

Nationality: USOrganisation: Public Company Accounting Oversight Board (PCAOB)Job title: Chairman

Under Doty’s leadership the PCAOB has examined ways to improve auditor inde-pendence, objectivity, and professional scepti-cism. After several years of evaluation, study and holding discussion groups to ascertain how to make the audit report provide more relevant information to the users of financial statements, the PCAOB has now put forward several proposed changes to the audit report for listed companies in the US which could represent the biggest shake-up of the audit report in the US for more than 70 years.

Patrick de Cambourg

Nationality: FrenchOrganisation: MazarsJob title: Chairman of the group govern-ance council

A graduate in political sciences, also with a bachelor degree in literature and a Master degree in public and civil law, D e C a m b o u r g i s a c h a r t e r e d accountant and statutory auditor. He joined Mazars in 1974 and played a key role in turning the French firm into an integrated partnership present in all five continents. For the past two years De Cambourg has been acting as chair-man of the group governance council of Mazars.

Stephen haddrill

Nationality: BritishOrganisation: Financial Reporting Council (FRC)Job title: Chief executive

Stephen Haddrill has been FRC chief executive since 2009 and steered the regulator through its strategic reform in 2012. He is a regular commentator in the UK and Europe on transparency, regulation, the quality of reporting and corporate governance. He told The Accountant earlier this year that he had devoted the past year to ensure the FRC’s work in standard-setting, governance and enforcement helps foster investment in UK companies.

Scott Barnes

Nationality: BritishOrganisation: Grant Thornton UKJob title: Chief executive officer

Under Barnes’s leadership, Grant Thornton UK reported 13% growth to £471m in fiscal year 2013 and remained the fifth- largest network in the UK. In light of challenging market condi-tions the double-digit growth of the firm is an encouraging achieve-ment, especially as apart from small M&As the firm’s growth has been organic. Barnes joined Grant Thornton in 1984 and was appointed as CEO of Grant Thornton UK in January 2009.

top 30

Joss van huut

Nationality: DutchOrganisation: European Group of International Accounting Networks and Associations (EGIAN)Job title: Chairman

In addition to his EGIAN role, Van Huut is also a board member of the Netherlands Institute of Chartered Accountants and the Fédéra-tion des Experts Comptables Européens. He is also a Praxity board member.



Toshio Kinoshita

Nationality: JapaneseOrganisation: Japanese Institute of Certified Public Accountants (JICPA)Job title: Chief executive

After a 27-year career at PwC, 20 of which were spent in the US as managing partner, Kinoshita returned to Japan to take the helm of the JICPA. As chief executive of the Japanese insti-tute, he has worked relentlessly on the integration of Japanese accounting with IFRS, as well as redrafting the country’s stand-ards to be consistent with the clarified International Standards on Auditing

olivier Boutellis-Taft

Nationality: FrenchOrganisation: Fédération des Experts Comptables Européens (FEE)Job title: Chief executive

Boutellis-Taft started his professional career in equestrian sports (jumping). From there he jumped from one experience to the next: director with PwC, director of the European Policy Centre, lec-turer on EU affairs at Toulouse Business School, public prosecu-tor in France and a consultant serving in particular banking and media industries. Boutellis-Taft has served as FEE chief executive officer since 2006.

top 40

Ana Maria Elorrieta

Nationality: BrazilianOrganisation: International Federation of Accountants (IFAC)Job title: Board member

Elorrieta first joined the IFAC board in 2010, and joined the Nominating Committee in January 2013, having served on the same committee in 2009. She also spent 35 years at PwC. In Janu-ary, IFAC issued guidance on effective business reporting process, and in November the US Institute of Management Accountants was admitted as a member of IFAC.

Kevin dancey

Nationality: CanadianOrganisation: CPA CanadaJob title: President and chief executive officer

Under Dancey’s leadership, the Canadian Insti-tute of Chartered Accountants successfully merged on a nation-al level with the Certified Management Accountants of Canada to form CPA Canada, of which Dancey was appointed presi-dent and chief executive officer. The first priority of the new organisation has been the development of the CPA certification programme.

Mark Carny

Nationality: CanadianOrganisation: Bank of EnglandJob Title: Governor

Carny took over from former Bank of England Governor Mervyn King in July 2013 following a term as governor of the Bank of Canada between 2008 and 2013. Since the start of his tenure, Carny has kept interest rates at their historic low of 0.5% and has had to spend time dealing with problems often created before his tenure, such as the Co-operative Bank’s capital shortfall.

Michael Andrew

Nationality: AustralianOrganisation: KPMG InternationalJob title: Chairman

Andrew was first elected chairman of KPMG in 2011 following time as chairman of KPMG Asia Pacific and chairman of KPMG Aus-tralia. The past 12 months have not been easy for KPMG, however the network has made several strategic investments such as the recent launch of a London-based investment fund and increasing its Islamic finance team. In November, the Brazilian Competition Authority also cleared KPMG’s two-year-old acquisition of BDO Brazil.

Lou Jiwei

Nationality: ChineseOrganisation: Chinese Ministry of FinanceJob Title: Minister of Finance

Jiwei, generally regarded as an economic reformist, became China’s Minister of Finance in March 2013, having spent the previous years as chairman of a multibillion-dollar hedge fund. Although growth in China has slowed in 2013, Lou remains in charge of the finances of the world’s second-largest economy. The Ministry of Finance has increasingly encouraged Chinese accounting firms to become international by consolidation or by expanding beyond China’s boarders.



zhang Ke

Nationality: ChineseOrganisation: Shinewing CPAJob title: Founder and chief executive officer

Zhang left his old role of managing part-ner of Coopers & Lybrand’s joint venture in China in 1998 due to factors involving the firm’s merger with PwC at the time. He went on to form Shinewing CPA, which has since become a major independent player in China, and was ranked the tenth-largest firm in China in the IAB China Survey.

Taro Aso

Nationality: Japanese Organisation: Ministry of FinanceJob title: Minister and Deputy Prime Minister

The controversial Aso has been a vital component of Prime Minister Shinzo Abe’s famous Abenomics, a mixture of yen devaluation, quantitative easing and public infrastructure spending, as the country seeks to recover from 20 years of economic malaise and recent accounting scandals.

Robin Freestone

Nationality: BritishOrganisation: The Hundred GroupJob Title: Chairman

As chairman of the Hundred Group, Freestone plays an impor-tant role in representing the views of the finance directors of the FTSE 100. The group aims to promote the competitiveness of the UK for UK businesses, and represents almost 90% of the market capitalisation of the FTSE 100. As well as this, he is currently the chief financial officer at publishing and education group Pearson.

Maureen Schwartz

Nationality: USOrganisation: BKR InternationalJob Title: Chief executive

As head of the fifth-largest global asso-ciation, BKR International, Schwartz co-developed one of the first leadership programmes for accountants with a pres-tigious university, and afterward worked to establish the BKR Scholarship Award to help deserving students attain a degree in accounting.

top 50Geoff Goodyear

Nationality: BritishOrganisation: Russell Bedford InternationalJob title: Chairman

First elected as chairman in 1997, Goodyear will retire next October. He led the transformation of the organi-sation from a relatively informal and shrinking association into a growing, market-oriented, branded global network. Goodyear also led the implementation of a globally-coordinated audit quality control system, and his network was one of the first full members of the IFAC Forum of Firms.

herman Mulder

Nationality: Dutch Organisation: Global Reporting Initia-tiveJob title: Former chairman

Mulder’s tenure as chairman ended in November of this year after three years at the helm of the GRI. He is credited

with playing a key role in moving sustainability reporting from an experimental pursuit to a mainstream practice. Mulder is also on the steering committee of Worldconnectors and on the Busi-ness Steering Committee for UN Finance for Development.

Richard Moore

Nationality: British Organisation: Moore Stephens International Job title: Chairman

Moore has been chairman of Moore Stephens International since 2004 and has seen the firm grow to over US$2.5bn turnover. In 2013, under his leadership,

Moore Stephens International completed an important addition in China bringing in Da Hua (now Moore Stephens Da Hua and the 10th-largest firm in China) as a member firm. Moore is looking to continue to strengthen the firm’s presence in major financial centres.

Robert dohrer

Nationality: USOrganisation: Forum of Firms (FoF)/RSM InternationalJob title: Chairman/director of quality

Doher was re-elected as chairman of the FoF for a second three-year term

in August. The FoF aims to promote international standards set by the International Federation of Accountants including quality control, auditing, ethics and independence and training standards.



oscar Eduardo Mary

Nationality: Argentinean Organisation: Integra InternationalJob title: Chairman

Over the past two years, under Mary’s leadership, Integra International has added new members in Europe, Asia and the Americas. His role as global chairman of the association will end at the end of 2013. Previously, he progressively developed his experience in manage-rial positions of consumer products and industrial companies (subsidiaries of large US corporations in Argentina) and as a partner of RCBM, an accounting, audit, tax and consulting firm.

Rhys Madoc

Nationality: BritishOrganisation: UHY International Job title: Executive director

A specialist in stakeholder management and organisational development, both in the UK and internationally, Rhys has a proven track

record in developing professional business networks, managing business engagement teams and driving income through member-ship. He joined UHY as its executive director in February 2013. Internationally, he has worked in Europe, the Middle East and Africa, Chile, Mexico, China, Japan and the Philippines. Rhys is chairman of Sunnyside Rural Training which supports adults with learning difficulties and contributes to the strategic direction and management of the charity.

Jean Rogers

Nationality: USOrganisation: US Sustainability Accounting Standards Board (SASB)Job title: Executive director

Rogers launched the US SASB in 2012 with the goal of setting comparable industry-

specific standards for sustainability reporting. Earlier this year she told The Accountant that the SASB was planning to produce a complete set of standards covering 10 sectors and 88 industries by the second quarter of 2015 and that she was confident it could meet the deadline. Previously she worked closely with the Global Reporting Initiative to develop the G3 guidelines and with the Initiative for Responsible Investment at Harvard University to develop a sector-specific method for assessing sustainability.

Jon Lisby

Nationality: BritishOrganisation: Kreston International Job title: Chief executive officer

In the past year, Lisby, who has been Kres-ton International chief executive for eight years, has continued to grow the member-

ship of the network adding firms in South Korea, Belgium, the UK, Canada, Ecuador, Honduras, Jersey, India, Paraguay, Bela-rus, Nigeria and Rwanda. Under Lisby’s leadership, Kreston International won the 2012 IAB Network Rising Star Award.

Wayne Carnall

Nationality: USOrganisation: PwC USJob title: Partner

In 2011, after four years as US Securities and Exchange Commission corporation finance chief accountant, Wayne Carnall returned to

PwC where he had started his career in 1981. He is now a US part-ner in the firm’s National Professional Service Group and has been praised for his extensive experience of supporting US and non-US companies that file with the US SEC using both US GAAP and IFRS.

Rick Anderson

Nationality: USOrganisation: PraxityJob title: Chairman and CEO

Anderson was appointed chairman of the Praxity management board in January of this year. He is also a partner and CEO at

Moss Adams where he started his career in 1973. Anderson has served on several American Institute of Certified Public Account-ants committees and task forces.

Rob Tautges

Nationality: USOrganisation: HLB International Job title: Chief executive

Rob Tautges was appointed as HLB Inter-national CEO in 2010 and has since worked to build services and referrals, increased the

network’s global footprint and engaged with members. Under his leadership in 2013, HLB added members in South America, Africa, Europe, Asia and the Middle East.



Global Accountancy Power 50 judgingIn the first stage of the judging process the IAB editorial team drew up a list of more than 200 prominent industry figures and invited the public to vote for candidates for the Power 50. Candidates not on the original list were accepted. In excess of 20,000 votes were cast in the two weeks allowed for voting in November. The public vote results were then examined by the judging panel, who made the final decision.The Next 50 list is a list of people who, while failing to make the Power 50, received votes and met with the approval of the judging panel.

The judging panel:

Mark Koziel – AICPA, vice-president for firm services and global alliances

Johan idris – Malaysian Institute of Accountants, president

Jane howard – Wragge & Co, professional liability partner

Lee White – Institute of Chartered Accountants in Australia

Fayezul Choudhury – International Federation of Accountants, chief executive

Sue Almond – Association of Chartered Certified Accountants, technical director

Alan Bezzant - Russell Bedford - CEO

Alex Malley - CPA Australia - CEO

Barry Salzberg - Deloitte global/Deloitte US - CEO

Bernard Peter Agulhas - Independent Regulatory Board for Auditors (South Africa) - CEO

Bob Moritz - PwC US - US chairman and senior partner

Carlos Garza - Consejo Mexicano de Normas de Información Financiera - president

Charles Allen - Crowe Horwath US - CEO

Claudio Cocca - Geneva Group International - chairman

David Sproul - Deloitte UK - CEO

Erik Emilsson - MGI - chairman

Fernando Alves - PwC Brazil - president

Geoff Barnes - Baker Tilly International - CEO

Graeme Gordon - Praxity - executive director

Guido Mantega - Ministry of Finance (Brazil) - Minister

Helmi Talib - IAPA - chairman

Ian MacKintosh - International Accounting Standards Board - vice-chairman

Ian Powell- PwC UK - chairman

James Mendelssohn - MSI Global Alliance - chairman

Jeff Thomson - IMA - chief executive

Jim Quigley - Deloitte US - senior partner and former global CEO

Joe Adams - McGladrey & Pullen - managing partner and CEO

John Capper - EGIAN - executive director

Kevin Arnold - Nexia International - CEO

Kevin Stevenson - Australian Accounting Standards Board - chairman and chief executive

Liza Robbins - Morison International - CEO

Mark Weinberger - EY global - chairman and chief executive

Martin Sharp - DFK International - executive director

Mary Jo White - US Securities and Exchange Commission - chairman

Michael Izza - Institute of Chartered Accountants in England and Wales - CEO

Michael Woodford - Former CEO Olympus/whistle-blower

Michel Prada - IFRS Foundation - chairman

Norbert Neu - Nexia International - chairman

Pablo San Martin - SMS Latinoamérican - president

Philippe Castagnac - Mazars - president & CEO

Ramesh Rajan - Former PwC India chairman/founder of Leap Ridge

Raphael Ding - Hong Kong Institute of Certified Public Accountants - CEO

Russell Golden - US Financial Accounting Standards Board - chairman

Russell Picot - HSBC - global CFO/International Integrated Reporting Committee - member

Sajjad Karim - European Parliament’s Committee on Legal Affairs - member of the European Parliament and rapporteur

Shri Palaniappan Chidambaram - Ministry of Finance (India) - Minister

Simon Collins - KPMG UK / Europe - chairman

Simon Michaels - BDO UK - managing partner

Stephen Chipman - Grant Thornton US - CEO

Stephen Yiu - KPMG China - chairman

Susan Humphry - IAPA - CEO

Talal Abu - Ghazaleh -Talal Abu-Ghazaleh Organization/Arab Society of Certified Accountants - chairman

Uantchern Loh - Singapore Accountancy Commission - chief executive

Wayne Berson - BDO US - CEO/BDO International - chairman

Yang Jiantao - Ruihua China CPAs - managing partner

the next 50

Barry Salzberg – Deloitte

Jim Quigley – Deloitte

Michael Woodford

■ PoWER 50: REGioNAL BREAKdoWN

Source: International Accounting Bulletin

note: all words and figures done in Indd file colour is Pantone 655 EC

make sure NO segments are black!if there are more than four, you will haveto manually apply the colour

Europe 46%

Asia-Pacific18%

North America30%

Latin America4%

Africa 2%

COUNTRY sURveYInternational Accounting Bulletin


uK

■ uK

networks – fee DAtA

Rank NameFee income

(£m)Growth

rate

Fee split (%)

year-endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance

Corporate recovery/

insolvencyLitigation

support other

1 PwC* 2,689.0 3% 36 25 18 21 - - - Jun-13

2 Deloitte* 2,515.0 8% 30 22 24 16 - - 8 May-13

3 KPMG* 1,782.0 0% - - - - - - - Sep-13

4 EY* 1,721.0 6% - - - - - - - Jun-13

5 Grant Thornton International*

471.2 13% 28 19 - 6 23 5 19 Jun-13

6 BDO*(1) 312.0 10% 36 28 - - - - 36 Jun-13

7 Nexia International* 267.2 6% 30 17 3 1 6 - 44 Jun-13

8 Baker Tilly International* 165.3 –3% 47 28 2 8 14 1 - Mar-13

9 Moore Stephens International*

124.7 –3% 45 15 11 2 6 1 20 Dec-13

10 Mazars* 120.0 4% 68 17 - - 15 - - Aug-13

11 Kreston International* 103.0 10% 45 24 6 4 4 - 17 Oct-13

12 HLB International* 82.9 17% 51 25 9 5 4 1 5 Dec-12

13 PKF International* 64.9 –37% 45 26 10 5 6 - 8 May-13

14 Crowe Horwath International*

60.7 –1% 57 23 1 4 3 6 6 Mar-13

15 UHY International* 48.3 –1% 52 21 5 4 11 - 7 Apr-13

16 ECOVIS International* (2) 4.2 8% 69 31 - - - - - Jun-13

Total revenue/growth 10,541.2 4%

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) BDO provided unaudited figures as audited figures were not available at the time of publication; (2) ECOVIS International does not include revenue of its full member law firm in the UK. If it were to, the total revenue would be £25,2m. Source: International Accounting Bulletin

Despite a slight recovery in the UK economy, surveyed networks had a year of slower growth in 2013, recording an average annual growth

of 4%, three percent less than the aver-age growth reported in the International Accounting Bulletin 2012 UK survey.

PwC UK remains the largest network in the UK with a reported 3% increase in annual revenues to £2,689m in the year to 30 June 2013. However the second-largest network in the UK, Deloitte, reported an 8% increase in revenue to £2,515m in the year to 30 May 2013, further reducing the gap at the top of the ranking table.

PwC UK chairman and senior partner Ian Powell attributed his firm’s growth to consulting work, even though he is still optimistic over the firm’s capability in the audit segment. “Consulting grew by 9% last year, which from a pure market per-spective is good,” he says. “But our assur-ance business, which includes audit, grew marginally by 1% and we consider that this is a good result because the market has been difficult.”

At the time of publication, KPMG UK results were not yet available, but KPMG UK chairman and senior partner Simon Collins says: “We will have some revenue

growth, but modest, and we will have very substantial profit growth.”

Collins also told the IAB that contrary to last year KPMG UK will not cut its costs and will start investing again. “Everything we are doing now is using the stored prof-itability as a springboard for growth,” he says. “Our plan for this year and next is profitable growth, so we don’t want to lose sight on profitability, because that’s the fuel for investment and sustainability, but we are focused on growth and therefore we don’t predict any more cost-cutting.”

The smallest of the Big Four, EY UK reported a fee income increase of 6% to

Retendering edicts herald the ‘new normal’This year the so-called ‘new normal’ went beyond simply adjusting to changed business conditions and now includes adhering to new audit retendering rules following the Competition Commission investigation and increased consolidation in the mid-tier. IAB reports

COUNTRY sURveY International Accounting Bulletin


uK

■ uK

AssoCIAtIons – fee DAtA

Rank Fee income

(£m)Growth

rate

Fee split (%)

year-endAudit &

AccountingTax

servicesManagement

consultingCorporate

finance

Corporate recovery/

insolvency Litigation

support other

1 IAPA*(1) 313.4 17% - - - - - - - n/a

2 Praxity*(2) 175.0 11% 57 16 2 1 11 - 13 n/a

3 PrimeGlobal* 111.1 1% 45 25 8 4 4 - 14 May-13

4 Morison International*(3) 102.0 5% 58 23 2 3 6 1 7 Mar-13

5 EuraAudit International* 73.2 1% 56 24 12 - - - 18 Aug-12

6 DFK International 66.3 22% 46 21 3 2 12 - 16 Sep-12

7 KS International* 40.5 0% 56 15 13 4 6 2 4 Apr-13

8 MSI Global Alliance* 37.7 6% 31 18 2 2 33 - 14 Mar-13

9 MGI* 35.0 6% - - - - - - - Jun-13

10 AGN International* 33.5 –4% 45 16 - - - - 39 Oct-12

11 BKR International* 29.8 8% 45 26 7 6 2 8 6 Jun-13

12 INPACT International* 8.7 10% 41 19 30 2 8 - - Dec-12

13 GMN International* 7.2 12% 57 11 12 - - - 20 May-13

14 Integra International* 6.2 1% 45 35 10 - 10 - - Jul-13

Total revenue/growth 1,039.4 9%

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) IAPA’s year-end is the latest available year-end of participating firms; (2) Praxity’s year-end is the latest available year-end of participating firms (3) Morison International is represented by MHA Association in the UK


£1,721m in the year end to 30 June 2013. The firm is now tailing right behind KPMG UK in the rankings and this suggests a com-petitive year for the Big Four in the coming year, with potential changes in the rankings this time next year.

EY chairman and managing partner for UK and Ireland Steve Varley believes the firm’s good results come from its interna-tional work: helping businesses to settle in fast growth markets for trade and also help-ing foreign investments into the UK.

For the mid-tier firms the year was marked by two major deals, which marked a change in the structure of the market. First, in April BDO UK finalised the merger with PKF UK, which resulted in a 10% growth in revenue for BDO UK, up to £312m for the year to 30 June 2013. BDO UK managing partner Simon Michael says: “The merger was the single biggest thing that happened in the business and the important thing about it was that it was a strategic merger.

Michael says that most deals that happen at the moment are “events driven”. “Which means one party has issues,” he explains. “It’s not often you get strategic mergers and this was a deal that neither firm needed to do but felt strategically it would be a good thing to do.”

Michael says both firms had identified a

possible consolidation of the mid-tier and saw the merger as a way to stay competi-tive in the market.

“We put a huge amount of effort to make sure that within the first hundred days we were going to market as one firm,” he says. “And we hit our financial targets for the year without breaking stride, so we we’re pleased even though there’s still an awful lot to do.”

Following the merger, PKF International was left without a member firm in the UK and throughout the year added three firms to their UK network: Littlejohn, PKF Coop-er Parry and Johnston Carmichael.

The second deal to resonate in the mar-ket took place in August when Baker Tilly UK bought RSM Tenon in a pre-pack deal after the firm went into administration. The financial impact of this acquisition is still unknown but the IAB estimates Baker Tilly UK could potentially double its exist-ing fee income and staff count. Baker Tilly UK reported £165.3m total fee income for the year to 31 March 2013, while RSM Tenon reported revenues of £88.4m in the six months to 31 December 2012. The firm went into administration before publishing its results for the fiscal year 2013 and both the administrator, Deloitte, and Baker Tilly UK refused to share with IAB fee income

information for RSM Tenon prior to the pre-pack. Baker Tilly UK also declined IAB’s invitation to comment on the acquisi-tion and the firm’s integration strategy for RSM Tenon. At the time of publication, RSM International had no member firm in the UK after the loss of RSM Tenon.

Despite those deals, Grant Thornton UK remains ahead of BDO UK and Baker Tilly UK as the fifth-largest network in the UK, reporting 13% growth in annual revenue up to £471.2 in the year to 30 June 2013.

Grant Thornton UK chief executive Scott Barnes says he doesn’t feel threatened by the results of the two M&As. “We are still well ahead of those two firms [BDO UK and Baker Tilly UK],” he says. “I think it just made two firms bigger. Overtime they will create stronger businesses but it will take two or three years. So this [the M&As] won’t change our strategy.”

Changes in audit tenderingThis year is likely to be remembered in the profession as the year the comprehen-sive two-year investigation into the statu-tory audit market concentration levels by the Competition Commission (CC) finally came to an end. In October the CC issued its final report and a package of remedies including mandatory retendering at least

COUNTRY sURveYInternational Accounting Bulletin


uK

■ uK

networks – stAff DAtA

Rank Name

Total staff Growth rate

Partners Professional staff Administrative staff offices

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1 PwC* 17,420 17,617 –1% 840 842 13,247 13,211 3,333 3,534 34 34

2 Deloitte* 14,631 13,867 6% 983 934 11,331 10,640 2,317 2,293 24 24

3 EY* 14,253 11,049 29% 565 549 - - - - 23 19

4 KPMG* 11,335 12,229 –7% 583 617 - 9,149 - 2,463 - 23

5 Grant Thornton International* 4,234 3,867 9% 206 202 3,012 2,723 1,016 942 27 26

6 BDO* 3,893 2,599 50% 259 206 2,778 1,836 856 557 25 15

7 Nexia International* 2,297 2,263 2% 359 341 1,246 1,202 692 720 30 27

8 Kreston International* 1,737 1,636 6% 171 163 1,267 1,185 299 288 46 43

9 Baker Tilly International* 1,722 1,831 –6% 224 229 1,183 878 315 499 25 28

10 Moore Stephens International* 1,349 1,397 –3% 149 142 886 931 314 324 35 35

11 Mazars* 1,310 1,290 2% 120 115 850 853 340 214 18 17

12 HLB International* 1,038 734 41% 123 99 627 449 215 186 24 22

13 PKF International* 924 1,279 –28% 107 75 599 1,043 218 166 18 16

14 UHY International* 734 712 3% 80 83 509 484 145 145 23 22

15 Crowe Horwath International* 645 665 –3% 72 75 454 479 119 111 9 9

16 ECOVIS International*(1) 63 51 24% 8 8 50 17 5 6 1 1

Totals 77,585 73,086 6% 4,849 4,680 38,039 45,080 10,184 12,448 362 361

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. (e) estimate. (1) ECOVIS International does not include staff of its full member law firm in the UK. If it were to, the total staff number would be 203.


every 10 years by all FTSE 350 companies. With this remedy the CC added to the exist-ing rules introduced by the UK Financial Reporting Council (FRC) in 2012 which prescribe retendering every 10 year on a comply or explain basis.

Despite many stakeholders believing the FRC rules went far enough, the CC was of a different opinion and said at the time that “no company will be able to delay beyond 10 years, and the CC believes that many companies would benefit from going out to tender more frequently at every five years”.

In addition the CC provisions also state that if companies choose not to go out to tender every five years, the audit committee “will be required to report in which finan-cial year it plans to put the audit engage-ment out to tender and why this is in the best interests of shareholders”.

However, the issue has still not been completely dealt with as the EU is still to have its final say on the proposed Euro-pean audit reform. As the European elec-tions in May 2014 approach the debate has been pushed into gear and the trialogue between the European Council led by the Lithuanian presidency, the European

Parliament and the European Commission is currently under way. With all three par-ties having slightly different views on the proposal, they are all in agreement that mandatory audit firm rotation might be the right remedy for the market. Mandatory rotation has been widely opposed in the UK with the CC dismissing it as a remedy.

Speaking about the CC, Varley of EY says he’s glad it’s concluded and “we’d like the EU also to conclude, so we can have some stability with which to plan”.

No evidenceVarley says that after two years of investiga-tion by the CC and “several thousand pages of evidence, the CC has failed to provide any evidence of a lack of competition”.

“We’re glad those points are being put to bed. It just took a long time and effort from organisations like ours to provide the con-tent for the CC to review. I am looking for-ward to redirecting those teams onto work servicing clients,” he adds.

Varley also echoes the opinion of other Big Four leaders and says that regardless of the CC’s decision the FRC amendment to the Corporate Governance Code has

already “moved the market significant-ly as there are a lot of tenders going out at the moment”.

He believes this change in the market sig-nals a “new era of competition”.

“We expect more audits to go out than ever before,” Varley adds. “We are strength-ening our capability around business devel-opment, and what we need to be careful of in the new world is that we still deliver audit quality.”

Collins says he does not agree that audit and assurance are ex-growth markets.

“I think you’ve got society taking assur-ance more seriously. You’ve got institution-al investors, audit committees and regula-tors taking assurance more seriously and you’ve got the profession and our firm very definitely thinking about how we provide greater assurance and more rapid and more valuable assurance.”

Collins at KPMG says the market is see-ing the start of a deluge of audit tendering, which is unstoppable.

“Irrespective of the CC, we’re glad they didn’t go much further than the FRC, because that would have been wrong,” says Collins. “It wasn’t just us that said

■ uK

AssoCIAtIons – stAff DAtA

Rank Name

Total staff Growth rate

Partners Professional staff Administrative staff offices

2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1 IAPA* 5,043 2,936 72% 573 502 4,119 1,631 351 803 163 152

2 Praxity* 2,120 1,835 16% 189 185 1,425 1,290 506 360 59 40

3 Morison International* 1,690 1,507 12% 172 168 784 930 388 409 42 42

4 PrimeGlobal* 1,503 1,492 1% 187 189 1,005 997 311 306 42 45

5 DFK International* 1,049 914 15% 128 115 718 619 203 164 38 30

6 MSI Global Alliance* 650 601 8% 63 55 451 418 136 128 5 5

7 MGI* 592 526 13% 79 75 349 293 164 158 24 19

8 KS International* 488 484 1% 59 59 333 330 96 95 7 7

9 BKR International* 375 353 6% 52 53 252 235 71 71 5 5

10 AGN International* 301 390 –23% 30 40 199 259 72 91 5 13

11 INPACT International* 119 119 0% 11 11 82 82 26 26 4 4

12 EuraAudit International* 108 107 1% 15 14 68 68 25 25 6 7

13 Integra International* 90 65 38% 14 15 57 43 19 20 4 4

14 GMN International* 69 73 –5% 15 16 44 43 10 14 1 1

Totals 14,197 11,402 25% 1,587 1,497 9,886 7,238 2,378 2,670 405 374

Notes: *Disclaimer = Only data from the named member firm or the exclusive member firms within a network/association is included. Data relating to correspondent and non-exclusive member firms is not included. Source: International Accounting Bulletin

that, it was audit committees, inves-tors and companies.

“We think the FRC proposals are embed-ded now and are changing the way audit is looked at. We’re happy with that; we backed the original proposals and we’re happy to live with the consequences of that.

“The big fly in the ointment is the EU which seems continually to want to do more and different things. We still believe rota-tion rather than tendering takes governance and accountability away from audit com-mittees and boards,” Collins adds.

“We also believe some of the other pro-posed restrictions by the EU would make the market substantially less competitive because firms simply wouldn’t bid for audit. We think we’ve got to a decent place overall in governance.”

A ‘new normal’In a more practical sense Collins says both the CC and FRC changes signal a ‘new nor-mal’ for audit services.

“We now have to consider a much less stable relationship,” he says. “That doesn’t mean a worse relationship; it means you have to consider what you can do in a period potentially leading up to a tender for audit. I think we’re having a first round of audit

tenders at the moment that are helping us to find the market. And then we’ll get an idea of what the ‘new normal’ looks like.

“For example a lot of companies tendering at the moment are actually ten-dering their advisory contracts and their tax contracts at the same time as the audit to make sure they’re not left in a position where they’ve got to clean up independ-ence problems. So we’re inventing a new normal,” he adds.

“A huge amount of change is going on at the moment, and there are some lessons coming out of it.”

Collins also adds that fee pressure con-tinues to be a challenge. However “it’s a market that’s careful about price, not obsessed about price”.

Collins continues: “Our sense is that audit committees are increasingly, rightly, obsessing about quality and resilience of service and those sorts of issues, much more than price. Once they’ve got all that, they still want to make sure they’ve got the right price though.”

Big Four leaders speaking to the Interna-tional Accounting Bulletin also observed an increased interest in assurance services with Powell at PwC saying the firm is seeing skills from audit moving through into the

assurance market, particularly around risk and regulation.

EY’s Varley also says there is increasing demand for assurance services with board-rooms and non-execs asking for assurance.

More liquidityMichaels at BDO says if “you combine the CC with market sentiment and the EU enquiries going on at the moment, the pack-age of measures coming in will create more liquidity in the market, which will present an opportunity for us, on the back of which we’re looking to grow our market share.

“If you work on the basis that the EU is seriously looking at mandatory rotation, we’ve got mandatory rotation, a ban on Big Four-only clauses, more explicit respon-sibilities for audit committees chairs in decision-making, a restriction over the level of the non-audit fees that can be provided by the auditor of a FTSE 350 company. All of that will open up the market.

“What we have to do is give people the confidence to be prepared to switch to BDO. Our ambition over the next five years is to grow our FTSE 350 audit share from 3% to 5% and our advisory share from 30% to 50%.

“That will take investment, which we are

CouNTRy SuRvEy International Accounting BulletinuK


■ uK

FiRM MovEMENTS

NETWoRK/ASSoCiATioN FiRM AddiTioNS, MERGERS & ACQuiSiTioNS

AGN Lost: Wright Vigar (Lincoln, Gainsborough, London, Newark, Retford, Sleaford)

Bdo Merger: with PKF UK

BKR international Added: UNW (Newcastle)

hLB Gained: Beever and Struthers (Blackburn and Manchester)

Kreston Added: Mitchell Charlesworth (North-west England), Alex Picot (Jersey)

iAPA Merger: Wilkins Kennedy and CW Fellowes; Added: MGC Hales Limited (Leicester); Lost: two from the UK200Group

Mazars/Praxity Acquired: Sarah Buttler Associates (Hertfordshire)

MGi Added: Bishops Chartered Accountants (Blackburn), Jeffrey Crawford & Co. (Edinburgh)

PKF Lost: PKF UK; Added: PKF Littlejohn, PKF Cooper Parry, Johnston Carmichael

uhy Gained: UHY Hacker Young (Winchester office)


prepared to make,” says Michaels.Despite the merger with PKF UK in the

past few months, Michaels says combining mid-market-sized firms is not going to cre-ate the critical mass that’s going to get FTSE 350 companies to switch their auditors to BDO or other mid-market focused firms.

“That’s going to come through building our industry capabilities and our interna-tional capabilities and our credentials in the FTSE 350 market.

“Only by building our credentials are we going to give FTSE 350 businesses the con-fidence to switch to BDO, and that change will take time,” Michaels adds.

Barnes at Grant Thornton says the CC investigation was important for “raising the profile of the issue rather than anything it is going to achieve through regulation”.

“I think already because of the debates in Europe and with the CC, the mood music changed. There are more audits tenders now for large listed businesses,” he says.

“Audit committee chairman are begin-ning to look at putting the audit out to tender.

“And we have already seen in the past 12 months before the CC findings were pub-lished there has been quite a bit of tendering especially in the FTSE 100, within the Big Four in the first instance, but I think that will trickle down.”

HLB International member firm Menzies managing partner Andrew Denley say the CC investigation was beneficial, but unlike-ly to affect his firm.

“I don’t think it will impact us. For the mid-tier firms – maybe those ranked six

or seven downwards – there will still be the merry-go-round of audits between the larger firms. And I can’t see them spilling out further down.”

Tax and moralityThe past 12 months saw several large cor-porations have their tax arrangements wide-ly publicised in the national press leading to a number of questions being asked of their accountants and eventually culminating in senior partners at of the Big Four appearing before a Parliamentary committee, chaired by Margaret Hodge.

For firm leaders, the main takeaway from the whole argument appears to have been a need for greater transparency, and BDO’s Michaels predicts a possible rise in transparency in the market with regards to tax structuring and tax payments in the immediate future. While some leaders the IAB spoke to agreed that there is a debate to be had around tax and tax morality, the way the debate has been framed meets a lot of criticism, and Barnes, for example sug-gests the debate has been dominated by unhelpful “sound bites,” rather than rea-soned arguments.

Others disagree with the introduction of morality into a tax debate. For example Denley firmly states “accountants and firms are not the moral custodians of the rules”, instead saying “accountants work with their clients to make sure that they are within the boundaries of the law and we rely on the system being stable to advice our clients.”

A key point is that the debate centres on whether accountants have been responsible

for active tax avoidance, as opposed to doing anything illegal, such as tax evasion. This has led to a grey area about what is considered ‘tax planning’ and ‘tax avoid-ance’ and, according to Barnes, “legitimate planning has got mixed up with avoidance”.

Part of the problem is that countries and government’s tend to use tax relief as a way of making regions attractive for investment, and it’s only natural that companies look-ing to make profits will take advantage of it. As Powell at PwC notes: “As long as countries use tax rates to make themselves attractive for investment, you are going to get tax arbitrage.”

For KPMG’s Collins, if government’s want companies to pay a minimum of tax then they should say so, adding: “It’s no good saying you can have relief for this and that, and then saying ‘oh wait, you’re not paying much tax, we didn’t mean that’.”

All this has resulted in a number of changes. One change, according to Varley, is a slowdown in the number of companies looking to re-domicile or looking to invest in the UK, as companies are put off by a lack of clarity about the government and citizen stakeholder groups’ intentions.

A second change is a push for clarity. The majority of firms already had some sort of ethical code in place, and, by and large, they judge these to be adequate. Col-lins, for example, notes that KPMG feels its ten-year-old tax principles are adequate to make sure they act in a correct and respon-sible manner, and says the debate “hasn’t made us rethink our fundamental philoso-phy or values”. However, he adds that “all good business is more thoughtful about public interest now”.

According to Varley, the debate has estab-lished an urgent need for more clarity around the codes on tax and transparency to help rebuild confidence in tax, while Barnes says there is a need for international collabora-tion to prevent countries behaving unfairly.

Technology opportunitiesA number of firms reported strong growth in certain parts of their advisory and con-sulting services. For example, PwC’s con-sulting grew by 9%, with growth being driven by a rising interest in technology, and Powell highlights “cyber, cyber secu-rity and data analytics”. This is an area the firm is investing heavily in, and in Octo-ber the firm signed a conditional merger

CouNTRy SuRvEyInternational Accounting Bulletin uK


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top 20 fIrms: fee DAtA

Rank Fee income (£m)

Growth rate

1 PwC 2,689.0 3%

2 Deloitte 2,515.0 8%

3 KPMG (e) 1,782.0 0%

4 EY 1,721.0 6%

5 Grant Thornton UK 471.2 13%

6 BDO (1) 304.0 11%

7 Smith & Williamson (2) 185.7 11%

8 Baker Tilly UK 165.3 –3%

9 Moore Stephens International

124.7 –3%

10 Mazars 120.0 4%

11 Haines Watts (e) 64.2 4%

12 Crowe Clark Whitehill (3) 60.7 –1%

13 Saffery Champness (4) 61.0 5%

14 Kingston Smith (5) 40.5 0%

15 Johnston Carmichael (6) 33.4 13%

16 MHA MacIntyre Hudson (7)

38.2 18%

17 Wilkins Kennedy 31.5 4%

18 Menzies (8) 30.6 7%

19 Buzzacott (9) 25.2 25%

20 Reeves (10) 20.0 –6%

Notes: (e) International Accounting Bulletin estimate; (1) BDO provided unaudited figures as audited figures were not available at the time of publication. (2) Smith & Williamson is a member firm of Nexia International, (3) Crowe Clark Whitehill is a member firm of Crowe Horwarth International, (4) Saffery Champness is a member firm of Nexia International, (5) Kingston Smith is a member firm of KS International, (6) Johnston Carmichael is a member firm of PKF International, (7) MHA MacIntryre Hudson is a member of Morison International; (8) Menzies is a member firm of HLB International, (9) Buzzacott is a member firm of PrimeGlobal, (10) Reeves is a member firm of Kreston International.


agreement with international advisory giant Booze & Co to expand the firm’s capabili-ties in this area further.

KPMG has a similar belief, and Col-lins describes the rise of technology as “an engine for change or a problem, depending on how you look at it”. In an attempt to remain at the cutting edge, the firm set up a technology investment fund in London. Aside from investing in data and analytic businesses, the fund will be a way of sourc-ing technology, people, applications and processes for clients, says Collins.

The same is true at EY, which has collab-orated with the US Federal Bureau of Inves-tigation to create algorithms that review big data stores and can track patterns indi-cating fraud. According to Varley, EY has invested in a number of enterprise resource planning systems, which he calls “the tip

of the iceberg”.Transaction support has not been as

strong as cyber over the past 12 months. EY’s transaction support services fell slight-ly in the previous financial year, due to what Varley describes as “a perfect storm of very low interest rates and continuing restriction in the finance business”, and he notes that EY has had a good start to the current year in this regard.

Away from the Big Four, transaction has also been growing in the past few months, and Nexia’s Kelsey notes that “a lot of pri-vate deals are starting to happen, the tax transaction team have been really busy.”

The battle to secure top talent remains one of the top concerns for the UK pro-fession; however there are also more broader concerns.

Michaels says: “War for talent is prob-ably the biggest challenge everybody will face. If I look at the profession more widely, the challenge is going to be about continu-ing to build trust in business and value-adds – where can the profession add value to its clients? However this is a profession-wide thing and there is no difference between us and the other firms.”

Powell thinks one of the key chal-lenges for the profession is to work hard to be relevant.

“The capital markets rely on our profes-sion and we have to make sure, as we devel-op reporting, that reports and accounts are useful for the reader,” he says.

“There’s a lot more to be done on that, in terms of the quality of audit reporting and the quality of annual reports to make them usable by investors.”

“My big point would be this: if the pro-fession wants to remain relevant, it has got to adapt and change and account for itself better in terms of the way it describes what it does,” he said.

Similarly, Collins feels it’s important for the profession to restore trust.

“We’re on a knife edge whereby, essen-tially, everyone assumes everyone else is bad and without integrity. That leads to a calamitous cycle of suspicion, over- regulation and paranoia. We won’t get good business like that. So we have to break the circle and show that business can be trusted, push back for the right reasons on regula-tion and start to make some fundamental assumptions that people are not all out to hurt each other.” <

CouNTRy SuRvEy International Accounting BulletinuK


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