March 2012 Issue 503-504 www.InternationalAccountingBulletin.com Winners unveiled

IAB hosts inaugural industry awards

• PCAOB and EU Paliamentary● xxxxxx hearings into audit begin ● xxxxx • Switzerland survey: Audit threshold● xxxx and competition on the rise • Canada survey: Firms● grow xxxxxxx despite intense fee pressure 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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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. www.vrl-financial-news.com International Accounting Bulletin Editor’s letter

contents A question of independence Give your students a business way from the media glare and hype of news & analysis 02-04 Aaudit debates in Brussels and Washing- ton, the CEO of a large accounting firm left news Headlines perspective of the world of his job this month for something he did not ■ Stakeholders oppose firm rotation do. ■ Congress could block PCAOB plan His name is Piet Hein Meeter and he ■ EC warns against ‘excessive’ lobbying accounting. stepped down because of a breach of the

comment: women in accounting firm’s independence rules that do not allow Leaders from Crowe Horwath audit firm employees to have any financial International and MLBennett Consulting interests in audit clients. Give your students access to reflect on the importance if nurturing An investigation concluded that Meeter and developing was not personally involved in any of the

IaB AWARDS 2012 05-09 investment decisions in question or worked content they can trust. as part of the audit teams for these clients.

IAB hosted its inaugural industry awards But the fact he could be linked with a poten- to celebrate global excellence in the tial conflict of interest meant he had to go. accounting. Our extensive coverage Meeter was the CEO of Deloitte Nether- provides details on all of the winners Give your students and highlights of the evening lands, a firm with revenue of €632 million the auditor should evolve to meet current and more than 4,500 staff. and future market demands. Independence breaches are very uncom- I’m of the strong belief the role of the the edge. Subscribe to mon at the rarefied heights of Big Four sen- auditor should be determined before other ior management but this case highlights the Barnier/PCAOB proposals are put forward. ultra-cautious, risk averse nature of the audit Until we know how what is expected of and The Accountant business. auditor, how can sensible proposals be made Would the CEO of a major bank, con- that help change the current system to a new country surveys 10-20 struction company or hospital step down and improved one? A subscription to The Accountant is the ideal accompaniment to an accountancy course of study. Including under similar circumstances? It’s like asking a Formula 1 team to design I suspect not. a new car before knowing what new rules 10-14: switzerland Meeter’s resignation will hardly raise an and circuits they will be subjected to. exclusive features and interviews with major figures in the accountancy sector, The Accountant will help Swiss firms are feeling the effects of fee pressure and increased competition eyelid from policy makers in Europe and the your students to understand the real-world implications of the theory they are learning, and help improve from law firms. Growth has been slow US who are adamant auditors lack independ- A night to remember for the three largest firms and stable for ence. After all, if auditors had been more This month’s IAB Awards was a landmark the rest of the market their employability in a competitive jobs market. A weekly newswire gives you regular updates of all the big independent and sceptical, there’s little doubt moment for this publication. We had more stories, while IP access means students can view our content anywhere with access to the student portal. 15-20: Canada the financial crisis could have been halted in than 60 people attend our inaugural indus- Despite solid growth, Canadian firms its tracks, right? try awards event, including firm leaders and have had to tackle increased competi- tion, fee pressure and a raft of new What is not recognised is that audit firms award hopefuls. accounting standards. Gundi Jeffrey are heavily regulated and most endure rigor- It was a wonderful networking event that reports ous independent oversight and frequent (and paid tribute to excellence in our industry. Subscribe to The Accountant for: SIGN UP FOR THE FREE NEWSWIRE often burdensome) reviews. We hope that in our 2013 instalment we Proposals that attack a perceived lack will better the 120-plus nominations we • IP access to our content. So your students can access our Get free weekly updates and free content. of independence need to ask the very basic received this year and put on an even big- content campus-wide with one login Sign up here: question – is trying to fix a perception prob- ger show but retain the fun-filled and semi- Editorial Advisory Board lem worth the likely fallout? informal atmosphere that made this an event • Content you can trust. We have 125 years of experience Frank Arford, Crowe Horwath International CEO Frequent mandatory firm rotation, let’s say to remember. http://www.vrl-financial-news.com/system- Kevin Arnold, Nexia International executive delivering accountancy news. pages/headernav/free-news.aspx director between six to 12 years, is costly, impractical Congratulations to all the winners, Geoff Barnes, Baker Tilly International president and could lead to a reduction in audit quality shortlisted firms and everyone involved in and CEO for larger, more complex engagements. organising the event, from our sponsors Aon, • Truly global analysis. We cover a range of stories from around Graeme Gordon, Praxity executive director It is little wonder most US stakeholders are the judging panel and the IAB team.< the world, so your students get a wide perspective of the sector. Stephen Jacobs, INPACT International president Jon Lisby, Kreston International executive against it few people on the other side of the director Atlantic show support. James Mendelssohn, MSI Global Alliance CEO The other issue that was debated in this Arvind Hickman Christian Mouillon, Ernst & Young global vice- chair, assurance month’s PCAOB hearing is how the role of [email protected] Jeremy Newman, independent DON’T mISS OUT. Subscribe to The Accountant today. Ed Nusbaum, Grant Thornton International CEO Michael Reiss von Filski, Geneva Group Inter- national CEO Contact our subscriptions team on +44(0)20 7563 5688 Liza Robbins, Morison International CEO Martin van Roekel, BDO International CEO or email us at [email protected] to find out more. Jean Stephens, RSM International CEO Robert Tautges, HLB International CEO Pauline Wallace, PwC head of public policy and regulatory affairs www.vrl-financial-news.com www.InternationalAccountingBulletin.com March 2012 y 1 news analysis Pcaob hearing International Accounting Bulletin

audit Follow IAB Stakeholders oppose firm rotation

A majority of stakeholders have opposed cost and affect audit quality, and the deci- mandatory audit firm rotation during a sion should not be taken away from audit US Public Company Accounting Oversight committees. Board (PCAOB) hearing into rotation and On the flip side, investment groups were the role of the auditor. adamant rotation should be adopted. While investors, regulators and some aca- “Unless, the PCAOB takes the regulatory LinkedIn – Search for the demics backed rotation, audit firms, large action to require auditor rotation, the status group ‘World Accounting corporates and a majority of comment letters quo, which encourages audit firm for life, or Intelligence’ received by the audit watchdog are against forever, whichever comes first, will continue swapping audit firms after a predefined peri- and investor concerns about audit firm inde- od of time. pendence will persist,” said Peter Clapman, Audit firms and corporates fear that regu- US chairman of investor group Governance lar rotation will not only increase costs but for Owners. could decrease audit quality, especially for The main arguments supporting rotation larger and more complex companies. were building on SOX, increasing independ- KPMG US chairman and chief executive ence, providing a fresh set of eyes on an audit John Veihmeyer said mandatory rotation in order to improved prudence and scepti- would create a sales culture at the firm, cism. Supporters also dismissed concerns Twitter – Search for WAI_News decrease audit quality and make it harder to over increased cost. attract and retain talent. Academics were split over their support Grant Thornton US chief executive Ste- of rotation. University of Illinois professor phen Chipman said there is no reason to Richard Kaplan said rotation alone would believe rotation will enhance audit quality not solve the problem of auditor independ- “but will have a negative effect on cost espe- ence because auditors are hired, fired and cially for small public companies”. paid by the company they are auditing. Auditors received strong backing from Kaplan said rotation would “fundamentally large companies as the PCAOB heard from improve the situation and counter to some representatives of BlackRock, Proctor & degree the natural tendency of accounting Facebook – Search for the Gamble, Goodyear and Edison Electric. firms to identify with their clients”. page World Accounting Proctor & Gamble senior vice president City University of New York professor Al Intelligence and controller Valarie Sheppard explained Ghosh said there is little evidence rotation the company already uses three of the Big would work. Four firms for audit and non-audit services “Only 25% of existing mandatory audit Scan our QR code for quick and having to re-tender would pose serious rotation studies globally found there are ben- access to all our content concerns about independence and choice. efits to it,” Ghosh said. “Rotation would be online PNC Financial Services audit committee limited to the Big Four if implemented and chair Paul Chellgren said rotation would add would lead to higher fees.” <

audit Congress could block PCAOB plans US Congress has threatened to block the In response, the PCAOB said it has Public Company Accounting Oversight not tried to push mandatory rotation but Board (PCAOB) from proposing regula- just wanted to initiate dialogue about the tion to introduce mandatory audit firm potential benefits of such a measure. rotation. The move by lawmakers comes a week At a hearing in the House of Representa- after the PCAOB held a two-day public tives, the Financial Services Sub-Committee hearing discussing mandatory rotation and said the PCAOB is not a policy-making the role of the auditor. entity and such decisions should stay in the The US Chamber of Commerce is one of hands of politicians. the strongest opponents to rotation and has Committee member Mike Fitzpatrick, asked the PCAOB to “stay focused on its a Republican, proposed a six-line amend- mission”. “This is not a matter of audit- ment to the Sarbanes-Oxley Act prohibiting ing regulation. This is a matter of corpo- the PCAOB from require mandatory audit rate governance outside of the PCAOB’s firm rotation. realm,” the chamber stated. <

2 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin Ec Audit reform news Analysis

audit EC warns against ‘excessive’ lobbying

Big Four lobbyists have come under fire at of co-operation to all interest groups in order the first public hearing of EU Parliament to break the existing status quo, which is not legal affairs committee on the EC’s audit an option,” Karim said. reform proposal. The majority of the witnesses expressed Although the aim of the hearing was to little support for the EC’s proposals, such as discuss the EC proposals, such as mandatory mandatory audit firm rotation, pure audit rotation and audit-only firms, plenty of scorn firms and banning certain non-audit services. was directed at the intense lobbying efforts of Federation of European Accountants the four largest firms, PwC, Deloitte, KPMG chairman Philip Johnson told the commit- and Ernst & Young. tee there is room for improvement of audit EC deputy head of auditing unit Arvind quality but some of the EC proposals are Wadhera said Big Four lobbying has been detrimental. excessive and is “becoming counterproduc- “Pure audit firms, mandatory rotation, tive”. restricting non-audit services will isolate EU Another committee member said: “The on the global stage and reduce the level of message has to go out to the Big Four that expertise with in audit firms and make the we can not let this oligopoly to continue.” profession less attractive,” he said. The European Group of International UK Corporate Governance and Reporting, ■ European MEP Sajjad Karim says the EC will Accounting Networks and Associations Investment Management Association direc- not be swayed by lobbying. (EGIAN), which represents the interest of tor Liz Murrall said investors are against mid-tier firms, also chimed into the lobby- mandatory rotation and banning non-audit chairs are against non-audit services restric- ing debate. Director Andrew Brown called services. tions. on the EU parliament to “rise above the “We find non-audit services proposal are a All of the witnesses spoke of the impor- unacceptable lobbying by some of the larger step too far,” she said. tance to improve corporate governance and firms”. Brown said the EU Parliament should con- audit quality but not through the EC’s pro- European MEP Sajjad Karim, who is lead- sider any measures as a package. posals. ing the committee’s debate on audit reform, “Single measures as they are being looked Karim said the committee plans to engage said the parliament is open to many views at now on their own won’t work,” he said. further with stakeholders as it debates “the but called for constructive dialogue. Theo Siegert, managing partner of Haen most challenging dossier of my 20 year “I want to assure everyone of the inde- Carstanjen & Söhne and member of several career”. < pendence of the committee and offer a hand German audit committees said committee Ana Gyorkos audit Audit policy unit calls for stronger independence The argument that auditing services have to regulation is to make the audit market more tion in plenary is planned for January 2013. be subsidised by other “more remunerative dynamic. Measures include mandatory rota- On the day before the parliamentary open- services” is “extremely worrying”, mem- tion, mandatory retendering and prohibition ing session, members of audit firms gathered bers of the European Parliament heard at an of audit firms providing some non–audit ser- at another meeting in Brussels ‘Audit Policy introductory session this month. vices to audit clients. — the way forward after the crisis’. Arvind Wadhera, acting head of the EC’s On oversight, the EC proposes each EU This was moderated by Olivier Boutellis- audit policy unit, told members of the Legal nation designate a competent supervision Taft, chief executive of the Federation of Affairs (Juri) Committee legislators were authority. These authorities will have to co- European Accountants (FEE). Boutellis-Taft seeking to have auditing carried out by com- operate among themselves as well as with the described some proposals — such as the six- pletely independent service providers. European Securities and Markets Authority. year rotation of auditors — as “not so wel- Open mindedness over the proposed legis- Other parliamentary standing commit- come” and “an excessive restriction”. lation on statutory auditing of public interest tees that are to give opinions to the legisla- Wadhera repeatedly took the line he found entities was the tone set by the committee’s tive process cover Economic and Monetary it “extremely perplexing that ‘the incum- rapporteur, a role that has passed to Sajjad Affairs (ECON), Industry, Research and bents’ should wish to retain the status quo”. Karim, a UK Conservative. Karim said his Energy, and Internal Market and Consumer Main guest speaker, Pervenche Berès, a role is to come up with the “need to pro- Protection. prominent French reformist MEP, described tect citizens who are reliant on audit servic- The proposals’ progress through Parlia- the proposed legislation as “an essential step es”. The MEP for North West England has ment includes a second hearing, considera- in market reform”. She described the domi- recently taken over as rapporteur from Syed tion of a draft report in July, consideration of nation by the Big Four as needing “urgent Kamall, the MEP for London. amendments in November and a vote by the action”. < A key aim of the EC’s proposed audit committee at the end of November. Adop- Jeremy Woolfe, Brussels correspondent www.InternationalAccountingBulletin.com March 2012 y 3 comment Women in accounting International Accounting Bulletin

Women vital to long-term sustainability

As the world celebrated International Women’s Day this month, leaders from Crowe Horwath International and MLBennett Consulting reflect on the importance of nurtuting and developing women at CPA firms. There is still a significant gender imbalance at partner and senior levels that is not sustainable

cross nearly all regions of the world, not enough female role models and women it is now common for more than leaders are often not as visible as male lead- half of accounting firm new hires to ers. be women. Yet today, women only The impact of lack of visibility is a very A significant and underestimated part of the account for 5% to 20% of partners in CPA firms, if not less. problem. Without role models to demon- While lack of progress of women towards strate important aspects of professional leadership positions has become a frequently development such as work/life integration, discussed topic in some countries, the topic leadership styles and business development still suffers from a lack of visibility in many approaches, women in the profession often others. limit their aspirations and/or conclude they There are three primary reasons why cannot succeed because they do not identify women either slow in progression or leave with the style and approach of the current accounting firms in greater numbers than masculine models. their male counterparts: The third reason is related to career navi- ■ As many women are entering the profession The most obvious reason is a conflict gation and guidance. Many women do not than men but a gender imbalance occurs from between responsibilities outside of work and have the same access to career development partner level. the intense time commitment required to and advocacy relationships with senior lead- progress in accounting firms. Although the ers in the firm as their male counterparts. For building and career awareness that women role of men in many societies now includes instance, ambition seems harder for women need access to. more family commitments, women generally to express as competitive behaviours tend to The lack of progress of women is a busi- still have greater responsibilities outside of be seen as more appropriate for men than for ness issue that can impact the sustainability work that they find incompatible with cur- women. of accounting firms if targeted efforts are not rent professional norms. Interwoven with the above barriers are pursued. The business concerns impacted by The second reason is related to a lack of cultural aspects that organisations should the lack of progression of over 50% of the visibility that has two parts to it: there are address along with critical areas of skill current talent pool include: • Sustainable growth models and suc- n gender diversity cession planning models; • Viable exit strategies; How to mitigate against female talent drain • Bottom line cost of the loss or stagna- tion of high potential talent; No matter the country or culture there are • Leadership succession issues, • Increased need for gender diversity fundamental actions that accounting firms which force many accounting that mirrors the talent pool and shift- have to take to avoid facing the economic firms to sell, and increase in sever- ing marketplace; and, issues incurred if experienced women ity if the firm loses its most talented • Increased need for gender diversity at leave or do not develop. women; the leadership level to broaden leader- Consider the business case issues related • Potential loss of entry into new ship models. to the lack of progression of 50% of its markets as the market shifts to rep- Besides these obvious economic reasons, talents. This includes: resent new demographics. accounting firms in many countries have • Costs incurred by the loss or stag- It is important to understand when yet to broaden their talent development and nation of a high percentage of the and how your firm will implement pro- retention programs to encourage experienced experienced women that the firm grammes such as flexible work arrange- women to commit to a long-term career. has developed for several years; ments, cultural awareness raising, mentor- These firms have yet to learn that there is a • Challenges for firms that aspire to ing and advocacy. high cost, in terms of talent drain, if they do substantial growth and to retain a Look closely at the potential barriers not assure that talented women are succeed- common culture. These firms will outlined above: lack of visibility of female ing at the same rate as men.< have to assure that experienced, role models, work/life integration and lack talented women, as well as men, of access to assure that developmental and *By Crowe Horwath International CEO access leadership to keep pace with advocacy experiences supporting success- Frank Arford, MLBennett Consulting’s Mary and support firm growth; ful career navigation are provided. < Bennett and Crowe Horwath International communications director Cecile Barrault.

4 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin IAb awards 2012

Sponsors of IAB Awards

■ Up and coming: Kreston International claimed the Rising Star Network award. Pictured, from left to right, is Andrew Collier, Joanne Morris, Emma Perkins, Melloney Pritchard and Jon Lisby. And the winner is...

The International Accounting Bulletin hosted its inagural industry awards to celebrate global best practice in the accounting profesison. Industry leaders and legends within firms, networks and associations attended a cocktail reception in London to catch up with old friends and find out all the winners?

ixty industry leaders attended the 550 partners and staff. He helped BDO position. The global network advised on a 2012 International Accounting Bul- Norway through a transition from a fed- full suite of tax services, including European letin (IAB) Awards cocktail reception eration of firms to a single national firm. VAT, Enterprise Resource Planning systems, Sat John Carpenter House, London, on After helping conclude a merger with a for- R&D credits and transfer pricing. Thursday 8 March. mer Praxity firm, Trond-Morten led BDO Sponsored by Aon, the awards proved an Norway to grow 50% in the past two years. Sustainable Firm of the Year excellent platform to network and pay hom- KPMG age to some of the highest achievers in the Audit Innovation of the Year global accounting profession. Mazars - Human Rights Audit Since 2007, KPMG has reduced its global IAB received more than 100 nomina- carbon emissions by 29%. KPMG is the only tions from across the world in 13 catego- Mazars has taken a lead role in assess- global firm to participate in the supply chain ries. Shortlists and winners were adjudi- ing audit clients against the Mazars Indi- program of the Carbon Disclosure project. cated by a judging panel, which was com- cators for Human Rights Compliance, KPMG held a global business sustainability prised of former BDO global chief executive which indicate how well a company summit in collaboration with the UN Global Jeremy Newman, ACCA technical director is complying with basic human rights. Compact and its European staff volunteered Sue Almond, London City lawyer Jane How- Judges felt the Mazars Human Rights Audit 77,500 hours of time to the community. ard and IAB editor Arvind Hickman. was unique, pertinent, innovative and could PwC was highly commended in this category. set a benchmark for global best practice. 2012 IAB Awards Winners Employer of the Year Tax Adviser of the Year Plante Moran Young Accountant of the Year BDO International Plante Moran has a staff turnover rate of Trond-Morten Lindberg (BDO Norway) BDO demonstrated how a co-ordinated, less than 13% in the past 10 years and has. cross-border approach to tax planning Most importantly, our judges warmed to Plan- Trond-Morten is the managing part- helped a major IT client in 60 countries iden- te Moran’s focus on staff just having fun, an ner of a firm with revenue of €130m and tify and resolve tax risks and maximise its tax often overlooked aspect of professional life. www.InternationalAccountingBulletin.com March 2012 y 5 iab awards 2012 International Accounting Bulletin

KPMG UK and Beierholm were highly com- mended in this category.

IT Vendor of the Year CaseWare International

In 2011, Caseware International released Audit International, which has helped firms conduct audits in a more efficient and intui- tive manner. CaseWare International also launched Collaborate, which allows teams to access all engagement data in real-time from a secure cloud-based repository.

Rising Star Association Morison International

Morison International has performed partic- ularly well in the past year with 44% growth. ■ Deloitte London 2012 programme director Sally Ormiston collects the IAB Consultancy of Importantly, 37% of Morison’s members the Year award from Aon managing director of professional services Keith Tracey. have been recruited in the past two years, highlighting consistent growth. Consultancy of the Year Deloitte London 2012 Association of the Year Morison International Deloitte advised on over 200 advisory projects for the London Olympic Games in business management, procurement, operational readiness and organisational design. Aside from a good financial performance, Deloitte’s LOGOC framework on integrated strategic and business planning is now an Morison International displayed many International Olympic Committee template. Judges said Deloitte set a ‘gold medal’ stand- examples of client and member firm sat- ard in service provision to the global sports management industry. isfaction that eclipsed its rivals. Morison improved its strategic positions across sev- transition from an association to a network. More recently he has played troubleshooter eral geographies, recently adding MacIn- This involved rolling out a common audit at UK firm RSM Tenon. A champion of the tyre Hudson in the UK, Marks Paneth & methodology, common quality control and mid-tier, Newman will be remembered for Shron in the US and 2KAudit in Russia. audit firm inspection programme. It’s a mas- wearing his heart on his sleeve. Morison also rolled out an association-wide sive undertaking, and Kreston was recently technical support service to all member firms. welcomed to the Forum of Firms group of IAB Lifetime ACHIEVEMENT AWARD global networks for its efforts. Sir David Tweedie Rising Star Network Kreston International Network of the Year As chairman of the International Account- PwC ing Standards Board for 10 years, Sir David Kreston posted solid growth of 5% but what Tweedie was the driving force behind the really impressed judges is Kreston’s successful PwC capped off an impressive year of global transition from national accounting 10% growth by reclaiming the posi- standards to international standards. Testa- tion of largest global accounting network ment to his hard work, passion and belief, from Deloitte. PwC is the top performing IFRS is now the accepted set of financial Big Four firm in audit and advisory, and reporting standards in more than 100 coun- regional leader in EMEA and Asia-Pacific. tries, with the US and Japan likely to follow PwC has been heavily involved in CSR ini- suit. This feat was not even conceivable 10 tiatives and meaningful thought leadership, years ago. < such as strengthening the role of audit com- mittee reports. The network has nearly dou- IAB Awards Webinar bled staff mobility in the past year and is widely acclaimed as an employer of choice. What is the greatest challenge facing the profession? How are accountants vital to the success of an Olympic Games? What strategies help IAB Personality of the year associations pick up and retain members? Jeremy Newman IAB editor Arvind Hickman interviews award winners to find out about their achievements The IAB Editorial team’s choice for Personal- and thoughts on the profession. Special guests ity of the Year Award is one of the most out- include Sir David Tweedie, Deloitte London 2012’s spoken accountants in recent history. Jeremy Sally Ormiston, KPMG Europe ‘s Vincent Neate and ■ PwC head of public policy and regulatory Newman had an illustrious career at BDO, Morison International’s Liza Robbins. Stay tuned affairs Pauline Wallace receives the IAB leading its UK firm and global network to the International Accounting Bulletin website Network of the Year award. through a period of unprecedented growth. for full details.

6 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin awards iab sponsor’s note awards 2012

■ Talking point: Aon’s Adam Neverton (far left), Keith Tracey and Simon Hutton (far right) network with CPA Associates Interna- tional Hans van den Bessel. A risky business

Insurance coverage is a fundamental part of running an accounting firm, network and association in today’s increasingly litigious society. In this sponsor’s feature, leading global insurance broker Aon provides insights on some of the major risks and concerns that are on its radar

s far back as the mid-80s Aon has ent character, and insurers will be on alert sis management recognised and attended to? had significant client relationships about how firms are reacting and managing People risks: The competition for talent with 13 of the top 15 international those risks. has never been as fierce. Also, the risks of accounting organisations. The land- In the area of litigation, the IAB recently travel, the threat from the loss of key per- A reported that audit firms have been in the scape is different today but in the interven- sonnel and security concerns require close ing period Aon continued to serve the profes- firing line of lawyers in the past year. monitoring. sion’s needs and have a market position that The increase in the number of class actions What is the information security risk and has stood the test of time. outside of the US is a trend that we are track- is it being managed. Is there financial protec- In today’s world there are strong links ing in our risk analysis. Transnational litiga- tion available against adverse consequences between change, growth and risk. Some of tion is increasing in volume and litigation of policy failure or data breach? the key trends and issues that we see include activity is growing in a number of territories. Aon, the leading insurance broker for regulatory activity. A number of country and The issue of vicarious liability is well docu- global accounting networks and associa- regional regulators are seeking to impose mented and network exposures are of grow- tions, provides unique market knowledge change on the profession. This creates com- ing concern. and leverage by virtue of our history and plexity with risk implications with some current client portfolio. business models being under attack. Core risks We are responsible for the vast majority At the same time, there is consolidation as Outside of professional negligence, we see of historical innovations in this area, many networks continue to grow and evolve. some other risk issues and concerns: of which are now standard market practice. The International Accounting Bulletin Is the core risk identification the assess- This unique relationship with the account- (IAB) recently reported that severe fee pres- ment and management process linked into ing profession stretches back over several sures and tough competition are the main the management and operations of the firm? decades and we will continue to adapt our characteristics of Western audit markets but What is Enterprise Risk Management and thinking and capabilities to these challenges. in emerging economies audit firms cannot how can an organisation design and imple- We are proud to be associated with the grow fast enough to meet demand. These ment a successful and working framework? first IAB Awards and would like to thank the twin pressures create risks, albeit of a differ- Are the risks of business continuity and cri- IAB team for this opportunity. < www.InternationalAccountingBulletin.com March 2012 y 7 ■ Well deserved: Sir David Tweedie picked up the IAB Lifetime Achievement Award.

■ De Lage Landen – winners of the the Green Lessor of the Year award

■ On the rise: The Kreston International team celebrates their Rising Star Network award with CaseWare International sales director Marcel Keizer (second from right). ■ Right: International Accounting Bulletin Personality of the Year Jeremy Newman displays some of the pizzazz that helped him claim the award.

■ Winner: Morison Intenational CEO Liza Rob- bins accepts the Associa- tion of the Year gong from Aon managing director of professional services Keith Tracey.

■ Right: Award winners battled tooth and nail to ■ get their hands on this ■ Société CHP glass version of the ‘holy Générale Consulting’s grail’. ■ High achiever: BDO Norway managing partner Trond-Morten Lindberg (pictured left) took out the Young Accountant of the Year Award in a strong field.

■ Talking shop: IAB Awards judge Sue Almond (pictured below, centre) catches up PwC’s Pauline Wallace and David Jetuah.

■ Celebrations: Ed Dwan, Neil Brackstone and Lauren Gough, ■ Société Générale Equipment Finance with from BDO’s winning tax team, enjoy a drink at the IAB Awards. the Vendor Finance Provider of the Year award

■ Class act: KPMG International ■ Pensive: HLB International marketing manager Pauline Rottstock global head of citizenship and (centre) ponders how her life would change with an IAB award as HLB diversity Lord Michael Hastings International chief executive Rob Tautges mingles with HLB quality accepts the Sustainable Firm of the assurance reviewer Bettina Cassegrain. Year Award from Aon’s Keith Tracey. Country survey switzerland International Accounting Bulletin

Testing times ahead

Swiss firms feeling the effects of global market volatility as fee pressure and increased competition escalate. There is also an increase in the audit threshold, squeezing the audit market at the lower end. Despite this, Ana Gyorkos reports that firms are finding growth

he Swiss accounting market has done PwC has grown by just under 30% since n relatively well in the past fiscal with 2007, however in the domestic currency switzerland 4% market growth. However, pend- it had a 4% contraction in the same time At a glance ing audit requirement changes and period. T The fifth largest firm, BDO, is well ahead Revenue struggling global clients demanding more Largest by revenue: PwC, CHF619m for less make the future just as uncertain as of its mid-tier competitors reporting fee Smallest by revenue: Kreston most European economies. income of CHF164m. The sixth largest firm International, CHF2.1m The increase in the audit threshold for Baker Tilly is CHF115m behind in annual Highest growth rate: Nexia International, companies requiring a full audit might have revenues reporting CHF48.4m in the year 34% a severe effect on mid-tier firms, which have to 30 June 2011. Lowest growth rate: Kreston International, so far done well with average growth of 7% The Big Four and BDO take up 78% of -32% in the past fiscal. total CHF2.4bn market fees leaving the Over the past 12 months it was the global mid-tier players 22% of market share. Staff PwC, 2,819 economy and sovereign debt crisis that has The Big Four were affected by fee pres - Largest workforce: had an effect on Swiss firms, especially the sure intensifying as international clients’ Smallest workforce: BKR International, 18 Big Four. struggle, there has been increased competi- Most professionals: PwC, 1,941 Big Four firms grew by 4% on average, tion from Swiss law firms for tax work and Most partners: PwC, 176 driven mainly by Deloitte’s reported 27% clients have increasingly been demanding Most admin staff: PwC, 702 increase in revenues. better value for money. Most offices: BDO, 31 Deloitte chief executive Howard Lovell KPMG was the only Big Four firm and Source: International Accounting Bulletin says the firm grew by securing significant one of two firms in this year’s Swiss survey engagements across key markets and indus- to report a decrease in revenues. The companies that are exempt from a try sectors. KPMG said its 1% drop in the year to 30 full audit under the law also have to have Despite Deloitte’s solid performance, the September 2011 was due to the economic less than CHF20m on the balance sheet an firm is still the smallest of the Big Four with climate and severe fee pressure. increase from CHF10m and have to have annual revenues of CHF300m($331m) in One of the reasons why the mid-tier have less than 250 employees an increase from the year to 31 May 2011. In comparison, done marginally better than the Big Four 50. the third largest firm KPMG reported annu- is due to the client base they serve, which Ernst & Young Switzerland chairman al fee income of CHF430m in the year to 31 is mainly domestic SME clients that have Thomas Stenz says the change in the thresh- September 2011. avoided the severe effects of the global eco- old is a sizeable step as there are a large Ernst & Young and market leader PwC nomic downturn. number of companies that used to have a reported 1% growth in the past fiscal. Swiss economy with one of the highest full audit and now only have the limited PwC reported revenues of CHF449m in GDP’s globally and low unemployment rate examination. the year to 30 June 2011 and E&Y posted has done well since the global economic “I personally believe this is a good thing. CHF510m for the same period. downturn. So while the assurance volume may go The gap between the top three players Baker Tilly OBT’s head of international down a little bit we will have happier cli- in the market and the fourth largest firm tax group Fabian Petrus says the Swiss ents. Even our margins won’t suffer from it enable us to speak of a Big Three market in economy has done well up to now in com- as it will only be the volume going down,” Switzerland. parison to the US and some other European Stenz says. Since the last International Accounting countries. Grant Thornton managing partner Jörg Bulletin Switzerland survey in 2008, the Fischer says despite a lot of clients being market has not grown so much and the Big Audit changes able to opt for a limited audit and reduce Four are reporting similar revenues or slight The major challenge ahead for the Swiss their audit cost, there is still a lot of tran- contractions since fiscal 2007. accounting market, especially the mid-tier sition work these companies will require Market leader PwC reported CHF674m is a change in the Swiss Code of Obligation, assistance with. in the year to 30 June 2007 and in the which starting 1 January 2012 exempts “In the next year or two as [companies] past fiscal it reported lower earnings of companies’ with under CHF40m in annual need to change their accounting systems and CHF619m. However this is partially due revenues from a full audit. they will require some advisory work on to the value of the Swiss frank substantially Previously all companies with annual that. So, if we do end up loosing audits we increasing compared to the US dollar and revenue of CHF20m had to comply with are hopefully going to gain in advisory work euro over the past few years. If converted full audit requirements instead of a limited to assist with the transition,” Fischer says. to US dollars with historic exchange rates. audit. Petrus says the accounting change will be

10 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin iab switzerland country survey

n SWITZERLAND

networks - FEE DATA Revenue split by service line (%) Corporate Revenue Growth Audit & Tax Management Corporate recovery/ Litigation Year- Rank Name (CHFm) rate Accounting services consulting finance Insolvency support Other end 1 PwC* 619.0 1% 57 29 14 - - - - Jun-11 2 Ernst & Young*(1) 510.3 1% 53 30 - - - - 17 Jun-11 3 KPMG* 430.0 -1% 52 27 - - - - 21 Sep-11 4 Deloitte* 300.0 27% ------May-11 5 BDO* 164.2 2% 80 11 - - - - 9 Dec-11 6 Baker Tilly Switzerland* 48.4 5% 53 11 9 - - 2 25 Jun-11 7 Nexia International* 45.3 34% 40 17 11 8 - 2 22 Jun-11 8 Moore Stephens* 26.1 9% 67 19 1 1 - 7 5 Dec-11 9 Crowe Horwath International* 25.3 10% 69 15 9 6 - 1 - Dec-11 10 PKF International* 15.6 3% 56 9 32 - - - 3 Jun-11 11 Mazars* 10.0 5% 87 2 10 1 - - - Aug-11 12 Grant Thornton 7.7 4% 51 10 - 5 - - 34 Dec-11 International*(2) 13 HLB International* 6.8 1% 54 26 8 - - 2 10 Dec-11 14 Kreston International*(3) 2.1 -32% 35 20 25 - 3 - 17 Oct-11 Total revenue/growth 2,210.8 4% Notes: *Disclaimer = Only data from the exclusive member firms within the network is included. Data relating to correspondent and non-exclusive member firms is not included. (1) Ernst & Young fee split: Audit and accounting also include assurance services, tax includes legal services and other includes advisory services; (2) Grant Thornton: 34% of ‘other’ represents fee income for providing family office services, such as trust accounting, reporting and acting as trustee directors; (3) Kreston International fee income does not include non-exclusive members. If it were to include them the total fee income would be CHF 5.9bn. Source: International Accounting Bulletin n SWITZERLAND

ASSOCIATIONs - FEE DATA Revenue split by service line (%) Corporate Revenue Growth Audit & Tax Management Corporate recovery/ Litigation Year- Rank Name (CHFm) rate Accounting services consulting finance Insolvency support Other end 1 AGN International 28.2 12% 51 28 - - - - 21 Oct-11 2 EuraAudit International* 18.8 4% 84 6 7 - - - 3 Dec-11 3 MGI*(1) 17.1 ------Jun-11 4 IGAF Polaris*(1) 16.4 - 56 25 13 - - - 6 Aug-11 5 Praxity* 14.0 7% 74 3 7 1 - - 15 n/a 6 INPACT International* 13.6 5% 63 24 12 - - 0 1 Dec-10 7 Alliot Group* 13.0 6% 47 13 13 25 2 - - Dec-11 8 MSI Global Alliance*(1) 12.8 - 86 9 - - - - 5 Dec-11 9 DFK International* 11.2 15% 56 33 3 - - - 8 Dec-11 10 Morison International* 9.0 8% 64 15 10 7 - 1 3 Dec-11 11 Integra International* 7.5 0% 65 25 10 - - - - Dec-11 12 ECOVIS* 6.5 5% 37 39 - - - - 24 Dec-11 13 BKR International 3.0 3% 60 20 20 - - - - Dec-11 14 GMN International* 3.0 7% 45 8 33 - - - 14 Dec-11 Total revenue/growth 174.1 7% Notes: *Disclaimer = Only data from the exclusive member firms within the association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) The growth rate of these organisations is unavailable. Source: International Accounting Bulletin www.InternationalAccountingBulletin.com March 2012 y 11 Country survey switzerland International Accounting Bulletin

beneficial for the firm as it has experience in “And the problem is that the Big Four are tries. Lately, if you want to do international limited audit. struggling with fee pressure making them tax planning you have to combine it with “In terms of limited audits the price for come down the market and after some of other advisory skills to be relevant in the some of the medium-sized company clients our clients,” Fischer adds. market,” he says. might just be too high at the Big Four and “We have lost several clients to the Lovell says Deloitte’s tax practice has BDO and they will opt for our firm,” Petrus Big Four and BDO, and it is a permanent grown steadily despite unfavourable mar- says. struggle.” ket conditions due to the eurozone crisis and Swiss firms claim the full audit require- For the past 11 years Grant Thornton uncertain capital markets across the globe. ment changes won’t effect business severely International has had a small firm in Swit- “Despite these challenging markets we going forward, but fee pressure is worrying zerland representing the network following have experienced strong growth especially firm leaders. a failed relationship with two larger firms. within our transfer pricing practice and Stenz says regulatory pressures have lead Fischer says the firm has growth plans to global employee services. Both areas have to increased pricing pressures. increase the size by three fold in the next won important engagements and gained “With regulatory requirements increas- three years through organic and M&A market share.” Lovell says. ing the audit becomes more and more a growth. “We are also seeing great opportunities in compliance-based exercise and clients are the commodity trading industry and life sci- not ready to pay high prices for compliance Non-audit services strong ences sector.” based exercises,” Stenz says. Despite strong competition for tax work Petrus says for Baker Tilly the main area Stenz says it is increasingly about provid- from Swiss law firms most firm leaders say has been corporate tax followed by personal ing added value during an audit. there has been an increase in international tax services, which he says is a big deal in “The audit committee at times might have and tax planning services demand. Switzerland, especially as there has been an different constraints to what the regulators “That service line has actually had a increase in wealthy individuals moving to want us to look at. This can create further small decline in revenues in the past year Switzerland. tension on the prices,” he explains. due to the competition from law firms. We “We have seen an increase in individual’s Lovell says one of the major changes in have sizable law firms in the country that seeking tax work since the start of the finan- audit services is how it could be delivered offer more and more tax services and the cial crisis.” he explains. more effectively and can deliver more value. competition is becoming fierce,” Stenz says. “More and more individuals, mainly “This is the major challenge for the audit Stenz says transfer pricing and interna- from Russia and the UK, as a lot of hedge profession,” he says. tional tax planning service demand had funds have changed location from the UK to Fischer says due to the small size of Grant been growing due to increased pressure Geneva and Zurich.” Thornton Switzerland there has been intense from foreign tax authorities. Petrus says the firm has a strong interna- competition from small practitioners, who “Governments lack tax revenues so they tional tax service due to clients wanting to do a lot of price under-cutting. are looking to get taxes from other coun- expand beyond Swiss boarders. As a result

n SWITZERLAND

NETWORKS - staff table Administrative Total staff Partners Professional staff staff Offices Growth Rank Name 2011 2010 (%) 2011 2010 2011 2010 2011 2010 2011 2010 1 PwC* 2,819 2,623 7 176 171 1,941 1,808 702 644 15 15 2 Ernst & Young(e)* 1,820 1,840 -1 127 129 1,293 1,306 400 405 11 11 3 KPMG(e) 1,600 1,480 8 134 130 1152 1010 448 470 11 11 4 Deloitte* 1,019 837 22 74 68 786 640 159 129 6 5 5 BDO* 818 785 4 79 84 658 624 81 77 31 31 6 Baker Tilly Switzerland* 289 261 11 31 31 233 207 25 23 13 12 7 Nexia International* 240 - - 18 - 170 - 52 - 16 - 8 Crowe Horwath International* 137 122 12 26 21 85 72 26 29 8 6 9 Moore Stephens International* 124 115 8 29 27 77 71 18 17 16 16 10 Mazars* 69 48 44 4 4 58 38 7 6 4 3 11 PKF International* 68 65 5 11 11 49 46 8 8 3 3 12 Kreston International 45 53 -15 4 4 38 46 3 3 2 4 13 HLB International* 35 34 3 6 6 19 18 10 10 2 2 14 Grant Thornton International* 33 33 0 5 5 24 24 4 4 3 3 Totals 7,581 6,880 7 476 449 4,178 3,632 1,107 959 123 104 Notes: *Disclaimer = Only data from the exclusive member firms within the network is included. Data relating to correspondent and non-exclusive member firms is not included. (e) IAB estimate. Source: International Accounting Bulletin

12 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin iab switzerland country survey

Baker Tilly is looking to expand transfer also implement. Pure strategy advisors have EU it will soon or later affect Swiss firms. pricing offering. a harder time these days as clients today BDO’s Schiesser says the proposed regula- “At the moment in Switzerland we do not want to pay for advisor services if there is tion has had no direct effect on business yet. have specific transfer pricing regulation, proven track record of the implementation “But it triggered an interesting and impor- because usually the profits stay in Switzer- of the recommendations given,” he says. tant discussion in our industry on market land and they don’t go abroad. The fact that Stenz explains the Swiss private banking concentration and ways to further improve a lot of companies are becoming interna- sector is going to have severe cost pressures audit quality. I am sceptical over the pro- tional they are coming across transfer pric- due to reduced margins and a lower number posed changes having the effect they are ing issues with Germany and the UK and of assets under management . meant to have. Once the EU has reformed US. I think transfer pricing will become a Deloitte’s Lovell says transactions related the audit market it will for sure affect the bigger and bigger issue for our Swiss-based work is “patchy” as some sectors are see- Swiss market. We will sooner or later be an companies,” he says. ing increased M&A activity while others are autonomous follower,” he says. BDO Switzerland managing partner Wer- stagnant. Petrus says that the potential effects of ner Schiesser says advisory services have “Across all sectors, there is a greater focus the reform could be positive for Baker Tilly, grown 18% in the past fiscal driven by cor- on acquisitions in developing countries, especially if joint audits would make it back porate finance services such as valuation, rather than developed markets as companies to the reform as mandatory. M&A, forensics and due diligence. look to buy into the growth. However, there “Most of the listed companies are audited “Despite the macroeconomic challenges are now hugely inflated prices in many of by the Big Four and if these clients would during the past year, falling price expecta- these markets and many Swiss buyers are require a joint audit then they would come tions for trade deals and the continuing pres- cautious about over-paying,” he explains. to us. The second interesting thing is the sure of private equity to invest have driven Firm leaders have a firm attempt to build splitting of audit and non-audit services. transaction volumes higher. Private equity on their advisory and transactions service The Big Four do get a lot of their revenues continues to have an overhang of funds to with smaller firms such as Grant Thornton in consulting and if they were required to invest and many corporates are holding rel- looking at consolidating in order to gain drop some of these engagements in order to atively high levels of cash on their balance market share. keep their structure then this would signal sheets. These two factors should continue an opportunity for us to get some of those to support deal volumes going into 2012,” consulting engagements,” he says. he says. Ready for change Stenz says E&Y is vigorously against two E&Y’s Stenz says advisory has been a Switzerland is not part of the European of the proposals: one is the firm rotation “growth engine” predominantly advising Union, however firm leaders have strong and the other one is audit-only firms. the banking and insurance sector. views on the audit market reform taking “I think the EU should now quickly “One thing that has also helped the Big place at the moment. There is no doubt that decide what they want, because if they Four is that clients want advisers who can what ever legislation is to come out of the debate it for the next five years that does n SWITZERLAND

ASSOCIATIONS - staff table Administrative Total staff Partners Professional staff staff Offices Growth Rank Name 2011 2010 (%) 2011 2010 2011 2010 2011 2010 2011 2010 1 AGN International 128 126 2 17 19 87 84 24 23 8 8 2 EuraAudit International* 128 112 14 8 7 108 93 12 12 5 5 3 Praxity* 85 57 49 8 8 69 42 8 7 6 5 4 IGAF Polaris* 80 - - 15 - 53 - 12 - 15 - 5 Alliot Group* 73 70 4 6 6 53 53 14 11 7 7 6 MSI Global Alliance* 73 - - 21 - 45 - 7 - 4 - 7 DFK International* 71 65 9 11 10 44 41 16 14 5 6 8 MGI* 68 67 1 13 12 36 36 19 19 9 9 9 INPACT International* 65 64 2 13 17 40 38 12 9 4 4 10 Morison International* 61 60 2 10 10 36 39 15 11 6 6 11 Integra International* 40 40 0 7 7 14 14 19 19 4 4 12 ECOVIS ws&p ag* 37 38 -3 7 7 24 25 6 6 2 1 13 GMN International* 29 29 0 6 7 19 18 4 4 3 3 14 BKR International* 18 18 0 5 5 9 9 4 4 2 2 Totals 956 746 147 115 637 492 172 139 80 60 Notes: *Disclaimer = Only data from the exclusive member firms within the association is included. Data relating to correspondent and non-exclusive member firms is not included. Source: International Accounting Bulletin www.InternationalAccountingBulletin.com March 2012 y 13 Country survey switzerland International Accounting Bulletin

not help our profession, because then that staff. It’s very competitive as such compa- easier over the past few years. brings uncertainty and makes it harder to nies offer high salaries,” he says. “There is competition for people in the attract the right people. We not only want Petrus says the recruitment market is market but the competition for people is the EU to make the right decision, but also competitive in Switzerland. more intense in the mid-tier arena as it is a quick decision,” he says. “The knowledge level is very high, but among the Big Four and BDO, as BDO does And, attracting staff is something that the problem is that the level of graduates have a very good reputation in the market. can be a challenging task for Swiss firms as is low and there is a big competition from Very often people want to start their career competition from insurance companies and banks and insurance companies to get that in a Big Four firm,” he says. banks is tough. staff. It’s very competitive as such compa- Schiesser says it is hard to find experi- Petrus agrees it’s hard to find people in nies offer high salaries,” he says. enced chartered accountants because many Switzerland. Despite difficulties in recruiting, firms of them leave the profession for areas with “The knowledge level is very high, but are thinking of steadily increase there head- less restriction, regulation and control. the problem is that the level of graduates counts with no predicted redundancies on As the auditing market changes and com- is low and there is a big competition from the horizon. petition escalates, accounting firms might banks and insurance companies to get that Stenz says Big Four recruiting has become be in for some rough waters ahead. < n switzerland

network & association contacts Name Telephone, Fax, Email, Website Region head/contact AGN International Tel: +44 (0)208 947 4888; Fax: +44 (0)208 947 3477; Email: [email protected]; Website: www.agn.org Nick Blake Alliot Group Tel: +44 (0)203 330 111; Fax: +44 (0) 870 870 2652; Email [email protected]; Website: www.alliottgroup.net James Hickey Baker Tilly Switzerland Tel: +41 (0)44 278 4500; Fax: +41 (0)44 278 4505; Email: [email protected]; Website: www.bakertillyobt. Fabian Petrus ch and www.bakertillyinternational.com BDO Tel: +41 (0)44 444 35 55; Fax: +41 (0)44 444 35 35; Email: [email protected]; Website: www.bdo.ch Andreas Wyss BKR International Tel: +44 (0)207 544 4840; Fax: n/a; Email: [email protected]; Website: www.bkremea.com Stephen Hamlet Crowe Horwath International Tel: +44 (0)207 583 3771; Fax: 44 (20) 7583 689; Email: [email protected]; Website: www. Bernard Deloménie crowehorwath.net Deloitte Tel: +41 (0)44 421 60 00; Fax: +41 (0)44 421 66 00; Email: [email protected]; Website: www.deloitte.ch James Baird DFK International Tel: +44 (0)207 436 6722; Fax: +44 (0)207 436 6606; Email: [email protected]; Website: www.dfk.com Martin Sharp ECOVIS ws&p ag ??? Tel: +41 (0)44 268 25 55; Fax: +41 (0)44 268 25 59; Email: [email protected]; Website: www.ecovis.com/ Marcel De Boni switzerland EuraAudit International Tel: +33 1 53 93 94 60; Fax: +33 1 42 89 46 56; Email: [email protected]; Website: www.euraaudit.org Yves Marguerat GMN International Tel: +1 818 525 2185; Fax: +1 818 566 6571; Email: [email protected]; Website: www.gmni.com Michael Wilford Grant Thornton International Tel: +41 (0)43 960 71 06, Fax: +41 (0)43 960 71 00; Email: [email protected]; Website: www.grantthornton.ch Jörg Fischer HLB International Tel: +44 (0)207 881 1100; Fax: +44 (0)207 881 1109; Email: [email protected]; Website: www.hlbi.com Rob Tautges IGAF Polaris Tel: +49 2254 805 3898; Fax: +49 2254 805 3896; Email: [email protected]; Website: www.igafpolaris.org Norbert Schmitz INPACT International Tel: +41(91)6836641; Fax: n/a; Email: [email protected]; Website: www.inpactint.com Massimo Tognola Integra International Tel: +49 30 8938890; Fax: +49 308 938 8999; Email: [email protected]; Website: www.integra- Susanne Martius international.net Kreston International Tel: +44 (0)1245449266; Fax: +44 (0)1245462882; Email: [email protected]; Website: www.kreston.com Jon Lisby Mazars Tel: +41 (0)22 708 1072; Fax: +41 (0)22 708 1088; Email: [email protected]; Website: www.mazars.ch Jacques Fournier MGI Tel: +44 (0)193 285 3393; Fax: +44 (0)193 285 4323; Email: [email protected]; Website: www.mgiworld.com Jonathan Farrow Moore Stephens International Tel: +41 (0)22 908 65 65; Fax: +41 (0)22 908 65 55; Email: [email protected]; Website: www. Jacques Grossen moorestephens.ch Morison International Telephone: +44 (0)207 638 4005; Fax: +44 (0)207 638 4006; Email: [email protected]; Website: Liza Robbins www.morisoninternational.com MSI Global Alliance Tel: +44 (0)207 583 7000; Fax: +44 (0)207 583 7577; Email: [email protected]; Website: www.msiglobal. James Mendelssohn org Nexia International Tel: +44 (0)207 436 1114; Fax: +44 (0)207 436 1536; Email: [email protected]; Website: www.nexia.com Kevin Arnold PKF International Tel: +49 (0)69 17 00 00 580; Fax: +49 (0)69 17 00 00 758; Email: [email protected]; Website: www. Oliver Grosse- pkf.com Brauckmann Praxity Tel: +44 (0)208 774 4020; Fax +44 (0)208 774 4029; Email: [email protected]; Website: www.praxity.com Graeme Gordon PwC Tel: +41 (0)58 792 44 00; Fax: +41 (0)58 792 44 10; Markus Neuhaus: Email: [email protected]; Urs Markus Neuhaus/Urs Honegger: Email: [email protected]; Website: www.pwc.ch Honegger Source: International Accounting Bulletin

14 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin iab canada country survey

Strong growth in evolving market

Despite a solid growth, Candian firms have had to tackle increased n canada competition, fee pressure and a raft of new accounting standards. At a glance Gundi Jeffrey reports on an evoloving profession Revenue Largest by revenue: Deloitte, C$1.5bn t’s been an eventful year for Canada’s says PwC chief executive Bill McFarland, led Smallest by revenue: Integra accounting firms. A sluggish economy, to fewer deals and negatively affected “all International, C$4m influenced by ongoing recessionary aspects of our business”. Highest growth rate: AGN North America, struggles in Europe and the United “A heightened cost focus at many compa- 34% I nies led to price competition and a smaller States, proposals for radical changes to audit- Lowest growth rate: Kreston International, ing, an onslaught of new standards, stiffer consulting and tax wallet for many of our -49% competition for work leading to fee pressure services. This was partially offset by rev- Staff and an unprecedented wave of consolidation enue from additional IFRS related services,” Largest workforce: Deloitte, 8,068 are changing the landscape of the industry. he says. Smallest workforce: Integra International, Alan MacGibbon, chief executive of BDO Canada chief executive Keith Far- 25 Deloitte Canada, says the effects of the linger says the competitive landscape in Can- Most professionals: Deloitte, 5,513 recession, particularly in Europe, continued ada is heating up. Most partners: Deloitte, 538 “As the pool of businesses seeking to to have a significant impact on clients’ deci- Most admin staff: Deloitte, 2,017 sions in the past year. change accounting firms is reduced, the mar- Most offices: BDO Canada, 124 “The uncertain future of traditionally ket becomes much more competitive. One of Source: International Accounting Bulletin steady government bonds, combined with the results of this is that some firms drasti- the threat of global debt contagion, had a cally reduce audit fees, negatively affecting cooling effect on our clients’ decisions to the bottom line for all firms,” he explains. strong, especially compared to the US. Sup- invest in their business. In Canada, overall, The good news, according to Collins Bar- ply chain problems arising from the natural our clients remained risk averse.” row national chair Dean Woodward, is that disasters in Japan and Thailand proved trou- KPMG chief executive Bill Thomas points Canada continued to have a solid economy. blesome for clients in the automotive sec- out it has been a year of slow growth for “The beginnings of a US economic recov- tor in southern Ontario while the oil-sands Canada’s economy. ery certainly helped many Canadian busi- expansion continued to drive strong growth “Although our clients’ confidence nesses working and investing cross-border. in most sectors of the Alberta economy.” improved, there was still uncertainty that Low interest rates and a strong Canadian Ernst & Young chairman and chief execu- impacted their spending and investment dollar were favourable for clients seeking to tive Trent Henry says for the most part com- decisions,” he says. “We gradually saw a expand their operations in the US, although pany balance sheets remain strong and public return to business as usual and, as a result, it was less favourable for exporters, includ- sector finances are robust. some companies repositioned themselves and ing natural resources and other commodities “Canada offers low business startup costs, adjusted their offerings.” whose prices tend to be fixed in US dollars. a well-regulated and resilient financial system The reduced confidence in the economy, “Construction activity was relatively and an educated workforce – all good things www.InternationalAccountingBulletin.com March 2012 y 15 Country survey canada International Accounting Bulletin

with the power to move the needle in the “From the beginning of 2011, when com- IFRS, Canada’s accounting leaders would direction of increased stability and sustained panies commenced reporting under IFRS, now like to see the US do the same. growth,” Henry says. our focus turned to dealing with the transi- “The adoption of IFRS by the US is essen- Despite the economic challenges last year, tion almost solely in our capacity as audi- tial if there is going to be a single set of high- most of Canada’s firms saw substantially tor,” explains Phil Noble, chief executive quality global accounting standards. Multi- more growth than the year before, some and executive partner of Grant Thornton ple standards create confusion and a lack of moving into the double-digit range. Canada. “While there were some non-audit comparability of data,” McFarland says. Canada’s largest firm, Deloitte, post- clients who sought advisory help with the “The current uncertainty affects all com- ed impressive revenue growth of 9% to transition, this was much reduced from prior panies and creates a situation where financial C$1.51bn ($1.51bn) in the year to 31 May years.” statement comparability is challenging, mak- 2011. All of the Big Four grew with third Overall, the transition to IFRS has been ing the right investment and capital alloca- placed KPMG (C$1.14bn) gaining on PwC somewhat mixed. tion decisions more difficult and increasing (C$1.18bn) in the battle for second position. “While many of the smaller reporting issu- costs related to training and maintaining The largest mid-tier firm, Grant Thornton, er clients were slow in preparing, there were separate accounting records.” increased revenue by 11% to C$515m and very few significant issues that arose with this sixth placed BDO grew revenue 8% to group and, for the most part, the transition Audit reform concerns C$425m. was uneventful,” Noble adds. “However, for The various proposals on audit reform Driving some of this growth is a plethora other clients the transition has required sig- floated this past year in Europe and the of new standards implemented in Canada nificant effort and a number of them strug- US – including changes to the audit report, last year – IFRSs and new accounting stand- gled with the conversion.” mandatory rotation of auditors, joint audits, ards for private companies (ASPEs), along Woodward says while the large implemen- mandatory tendering and further restrictions with international standards on auditing tation push has subsided, many clients are on non-audit services provided by auditors – becoming Canadian GAAS. still working out “the myriad uncertainties pose a bigger concern. and complexities of these rules that will con- “We will be watching where the changes n CANADA tinue indefinitely”. in Europe, the US and Canada will go and Top 20 firms “IFRS further encouraged the idea that what the implications of these changes will companies often need accounting advisers be,” Thomas says. Revenue Rank Firm Growth separate from their auditors, and we are Henry stresses that E&Y strongly supports ($m) seeing more and more of that kind of work, measures to promote auditor independence 1 Deloitte 1,505.0 9% even amongst junior issuers who are not nec- “for the good of investor confidence and the 2 PwC 1,179.7 4% essarily required to do so under independ- capital markets”. 3 KPMG 1,138.1 6% ence standards,” Woodward adds. “But we do not believe that mandatory “Also, we are seeing new work in surpris- firm rotation, for example, is a necessary or 4 Ernst & Young 870.0 2% ing places – for example, we have found that constructive means to promote auditor scep- 5 Grant Thornton 515.0 11% we are auditing more South American enti- ticism or to improve audit quality,” he says. 6 BDO Canada 425.0 8% ties that are listing on Canadian exchanges Canadian firms are also monitoring audit 7 MNP(1) 351.0 8% because of the common accounting language reform developments in Europe with interest. that IFRS has created.” “We are concerned, especially about the 8 Collins Barrow(2) 143.0 3% Paul Rhodes, a partner and co-leader of European Commission’s draft proposals, 9 RSM Richter 83.8 3% Soberman’s IFRS Group, says the implemen- because there is little or no empirical evi- Chamberland tation of both IFRS and ASPEs haven’t had dence of any benefits to support many of 10 Mallette(e)(i) 52.3 6% a big impact on the firm’s services, although them,” McFarland says. “They would be 11 MacKay(i) 37.5 4% “we have been providing more assistance in unduly costly or could have negative unin- 12 Welch(3) 30.0 7% sourcing the new standards and interpreting tended consequences, especially at a time of them for our clients”. economic weakness.” 13 Soberman(4) 29.0 7% Virtually all of Zeifmans’ unregulated pri- Despite these preoccupations, business 14 Schwartz Levitsky 21.7 0% vate companies adopted ASPE, says Larry overall was good for the firms last year. Feldman(5) Zeifman, the firm’s managing partner. “[KPMG] saw particularly significant 15 Davidson & 21.5 13% The implementation of these standards, growth in our Western Canada practices and Company(6) which are simpler and more streamlined than across the advisory practice as a whole, par- 16 DMCL(e)(i) 19.7 6% Canadian GAAP, “has been well received ticularly in the public sector,” Thomas says. 17 Ginsberg Gluzman 19.6 3% and the transition was very smooth.” “We are seeing the benefits of our strategic Fage & Levitz(7) Daryl Ritchie, CEO of MNP, adds: “This is investments in public sector and healthcare 18 Manning Elliot(e)(i) 19.5 6% the business we’re in. Accounting standards work. There was slower growth in our audit have always been a major service offering practice than in previous years, as we see 19 Zeifmans(6) 17.7 8% of the firms and, over the years, they have less regulatory driven growth and continued 20 Millard Rouse & 17.7 1% changed. With change come education, sys- audit fee pressure. Our mid-market enter- Rosebrugh(5) tem changes and helping clients change. But prise practice continues to thrive as well.” Notes: (e) IAB estimate; (i) = independent, no global there was a lot to be done for us to get ready, Deloitte’s consulting practice achieved affiliation; Firms are members of the following global networks and associations: (1) Praxity; (2) Baker Tilly a lot to be done to help clients be ready. More double-digit growth, with particularly strong International; (3) BKR International; (4) Crowe Horwath work went into helping clients convert than performance across technology and human International; (5) HLB International; (6) Nexia International; (7) DFK International. in a normal year.” capital practices. Source: International Accounting Bulletin Having made a successful transition to “[The financial advisory practice] respond-

16 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin iab canada country survey

n CANADA

networks - fee data Revenue split by service line (%) Corporate Revenue Growth Audit & Tax Management Corporate recovery/ Litigation Year- Rank Name (C$m) rate Accounting services consulting finance Insolvency support Other end 1 Deloitte* 1,505.0 9% ------May-11 2 PwC*(1) 1,179.7 4% ------Jun-11 3 KPMG* 1,138.1 6% ------Sep-11 4 Ernst & Young* 870.0 2% ------Jun-11 5 Grant Thornton* 515.0 11% ------Dec-11 6 BDO* 425.0 8% 52 29 3 1 10 - 5 Dec-11 7 Baker Tilly International* 158.1 4% 67 22 5 1 1 0 4 Dec-11 8 RSM International* 83.8 3% 38 23 35 - - - 4 Dec-11 9 Nexia International* 56.7 7% 67 19 7 - 3 2 2 Jun-11 10 Moore Stephens 43.4 7% 56 16 6 - - - 22 Dec-11 International* 11 HLB International* 43.2 1% 62 20 6 2 6 - 4 Dec-11 12 Crowe Horwath 39.6 4% 58 17 5 1 11 8 0 Dec-11 International* 13 UHY International* 13.6 -26% 65 16 19 - - - - Dec-11 14 Mazars* 12.0 18% 70 25 5 - - - - n/a 15 Kreston International* 9.2 -49% 77 19 4 - - - - Oct-11 Total revenue/growth 6,250.5 6% Notes: *Disclaimer = Only data from the exclusive member firms within the network is included. Data relating to correspondent and non-exclusive member firms is not included. (1) Fee income includes expenses billed to clients as well as sub-consultant and member firm charges. Source: International Accounting Bulletin

n CANADA

associations - fee data Revenue split by service line (%) Corporate Revenue Growth Audit & Tax Management Corporate recovery/ Litigation Year- Rank Name ($m) rate Accounting services consulting finance Insolvency support Other end 1 Praxity* 363.0 12% 55 22 11 2 8 - 2 n/a 2 DFK International* 143.7 0% 51 24 7 1 12 2 3 Sep-11 3 PKF North America* 114.0 -5% 67 18 7 - - - 8 Dec-11 4 BHD Association of 77.8 6% 65 22 11 - - - 2 Dec-11 Chartered Accountants/IAPA 5 BKR International* 70.0 -7% 70 18 - - - - 12 Jun-11 6 IGAF Polaris* 50.8 ?? 61 21 17 - - - 1 May-11 7 AGN International-North 33.7 34% 26 21 14 - - - 39 Dec-10 America*(1) 8 Porter Hetu (UC&CS Global) 33.6 11% 62 22 10 6 - - - Dec-11 9 Morison International* 20.9 8% 46 28 8 14 1 - 3 Dec-11 10 MSI Global Alliance* 16.9 31% 83 11 3 3 Dec-11 11 MGI* 6.6 8% ------Jun-11 12 Integra International* 4.0 0% 15 50 10 - - 25 - Dec-11 Total revenue/growth 935.0 6% Notes: *Disclaimer = Only data from the exclusive member firms within the association is included. Data relating to correspondent and non-exclusive member firms is not included. (1) Other includes comp/review, technology consulting, pensions adzministration, IAS, EBPA, WriteDowns. Source: International Accounting Bulletin www.InternationalAccountingBulletin.com March 2012 y 17 Country survey canada International Accounting Bulletin

n CANADA

Networks - staff data Administrative Total staff Partners Professional staff staff Offices Growth Rank Name 2011 2010 (%) 2011 2010 2011 2010 2011 2010 2011 2010 1 Deloitte* 8,068 7,638 6 538 542 5,513 5,263 2,017 1,833 56 57 2 PwC* 5,731 5,721 0 420 429 3,919 3,912 1,392 1,380 25 25 3 KPMG* 5,110 4,997 2 429 418 3,459 3,400 1,222 1,179 33 33 4 Ernst & Young* 3,821 3,699 3 331 330 2,729 2,604 761 765 15 15 5 Grant Thornton Canada* 3,742 3,548 5 416 415 2,558 2,396 768 737 118 112 6 BDO Canada* 2,937 2,702 9 380 368 1,996 1,962 561 372 124 113 7 Baker Tilly International* 1,032 1,064 -3 179 189 695 693 158 182 38 39 8 RSM Richter Chamberland* 396 421 -6 47 48 237 252 112 121 1 1 9 Nexia International* 336 293 15 55 49 221 191 60 53 6 7 10 Moore Stephens International* 250 227 10 36 33 177 160 37 34 5 5 11 Crowe Horwath International* 240 232 3 36 34 144 147 60 51 4 4 12 HLB Canada* 211 217 -3 49 57 124 120 38 40 9 9 13 Mazars* 99 86 15 14 14 60 53 25 19 1 1 14 Kreston International* 94 142 -34 18 24 64 100 12 18 9 8 15 UHY International* 71 100 -29 12 22 50 64 9 14 2 5 Totals 32,138 31,087 3 2,960 2,972 21,946 21,317 7,232 6,798 446 434 N o t e s : * D i s c l a i m e r = O n l y d a t a f r o m t h e e x c l u s i v e m e m b e r f i r m s w i t h i n t h e n e t w o r k i s i n c l u d e d . D a t a r e l a t i n g t o c o r r e s p o n d e n t a n d n o n - e x c l u s i v e m e m b e r f i r m s i s n o t i n c l u d e d . Source: International Accounting Bulletin

n CANADA

associations - staff data Administrative Total staff Partners Professional staff staff Offices Growth Rank Name 2011 2010 (%) 2011 2010 2011 2010 2011 2010 2011 2010 1 Praxity* 2,224 1,569 42 212 250 1,660 927 352 392 55 62 2 DFK International* 948 974 -3 140 143 589 614 219 217 33 34 3 PKF North America* 899 921 -2 1zt28 132 456 485 315 304 36 36 4 BKR International* 599 610 -2 66 83 454 442 79 85 24 24 5 BHD Association of Chartered 448 364 23 87 66 361w 298 - - 14 12 Accountants/IAPA* 6 IGAF Polaris* 329 - - 54 - 217 - 58 - 7 - 7 AGN International-North 204 203 0 24 24 148 148 32 31 6 6 America* 8 Morison International* 166 163 2 28 26 107 91 31 46 8 8 9 Porter Hetu/UC&CS Global* 166 184 -10 64 75 101 108 1 1 38 44 10 MSI Global Alliance* 117 95 23 19 15 78 62 20 18 3 3 11 MGI* 37 40 -8 12 10 6 10 19 20 2 2 12 Integra International* 25 25 0 8 8 13 13 4 4 4 4 Totals 6,162 5,148 14 842 832 4,190 3,198 1,130 1,118 230 235 Notes: *Disclaimer = Only data from the exclusive member firms within the association is included. Data relating to correspondent and non-exclusive member firms is not included. Source: International Accounting Bulletin

18 y March 2012 www.InternationalAccountingBulletin.com International Accounting Bulletin Country canada country survey

ed strongly to the changing focus of our digit growth across energy and resources, ic research and experimental development, clients as they repositioned themselves for financial services and public sector industry transfer pricing and dispute resolution. growth in the aftermath of the financial cri- practices. “Our private company services practice sis,” MacGibbon points out. PwC’s highest growth was in Western continued to grow and, from an industry “And, as the financial advisory market Canada, led by its energy practice, McFar- perspective, the mutual fund and investment improved, we worked closely with them to land explains. The consulting practice also management practice results were strong and capture, protect and enhance value for their had good growth, while audit and assur- the public sector practice had a good pipeline stakeholders.” ance results were bolstered by the regulatory of business transformation and eHealth man- Deloitte’s M&A and forensic dispute ser- change resulting from IFRS conversions. In dates,” McFarland explains. vices also did well, while there was double- tax, stronger growth areas included scientif- BDO’s growth was driven by robust per- n CANADA

network & association contacts Name Telephone, Fax, Email, Website Region head/contact AGN International-North Tel: +1 (303) 743 7880; Fax: +1 (303) 743 7660; Email: [email protected]; Website: www.agn-na.org Rita Hood America Baker Tilly International Tel: +1 (403) 298 1588; Fax: +1 (403) 298 5814; Email: [email protected]; Website: www. Dean Woodward bakertillyinternational.com BDO Canada Tel: +1 (416) 369 3056; Fax: +1 (416) 367 3912; Email: [email protected]; Website: www.bdo.ca Keith Farlinger BHD Association of Tel: +44 (0)125 2720 810; Fax: +44 (0)125 272 8830; Email: [email protected]; Website: www.iapa.net Susan Humphry Chartered Accountants/IAPA BKR International Tel: +1 (212) 964 2115; Fax: +1 (212) 964 2133; Email: [email protected]; Website: www.bkr.com Maureen Schwartz Clarke Henning Group/ Tel: +1 (305) 670 0580; Fax: +1 (305) 670 3818; Email: [email protected]; Website: www.polarisinternational.org Julio Gabay Polaris International Crowe Horwath Tel: +54 (11) 5918 3702; Fax: +54 (11) 4394 0123; Email: [email protected]; Website: www. Eduardo Pestarino International crowehorwath.net Deloitte Tel: +1 (416) 874 3887; Fax: +1 (416) 874 3888; Email: [email protected]; Website: www.deloitte.ca Alan MacGibbon DFK International Tel: +44 (0)207 436 6772; Fax: +44 (0)207 436 6066; Email: [email protected]; Website: www.dfk.com Martin Sharp Enterprise Worldwide Tel: +1 (615) 377 3392; Fax: +1 (615) 377 3092; Email: [email protected]; Website: www. Patrick Pruett enterpriseworldwide.org Ernst & Young Tel: +1 (416) 864 1234; Fax: +1 (416) 864 1174; Email: n/a; Website: www.ey.com/ca Trent Henry Grant Thornton Canada Tel: +1 (416) 366 4240; Fax: +1 (416)360 4944; Email: [email protected]; Website: www.grantthornton.ca Phil Noble HLB Canada Tel: +44 (0)207 8811 100; Fax: n/a; Email: n/a; Webiste www.hlbi.com Rob Tautges IGAF Polaris Tel: +1 (678) 417 7730; Fax: +1 (678) 999 3959; Email: [email protected]; Website: www.igafpolaris.org or www. Julio Gabay accountants.org Integra International Tel: +1 (604) 817 1500; Fax: +1 (604) 939 1872; Email: [email protected]; Richard Purcell Website: www.integra-international.net KPMG Tel: +1 (416) 777 8500; Fax: +1 (416) 777 8818; Email: bbthomas@kpmg.ca; Website: www.kpmg.ca William Thomas Kreston International Tel: +44 (0)1245 449266; Fax: +44 (0)1245 462882; Email: [email protected]; Website: www.kreston.com Jon Lisby Mazars Tel : +1 (514) 845 9253; Fax: +1 (514) 845 3859; Email: [email protected]; Website: www.mazars.ca Lucette Poliquin MGI Tel: +44 (0)1 932 853393; Fax: +44 (0)1 932 854323; Email: [email protected]; Website: www.mgiworld.com Jonathan Farrow Moore Stephens North Tel: +1 (201) 291 2660; Fax: +1(201) 368 1944; Email: [email protected]; Website: www.msnainc.org Steven Sacks America Morison International Tel: +44 (0)207 638 4005; Fax: +44 (0)207 638 4006, Email: [email protected]; Website: www. Liza Robbins morisoninternational.com MSI Global Alliance Tel: +44 (0)20 7583 7000; Fax: +44 (0)20 7583 7577; Email: [email protected]; Website: www.msiglobal.org James Mendelssohn Nexia International Tel: +44 (0)20 7436 1114; Fax: +44 (0)20 7436 1536; Email: [email protected]; Website: www.nexia.com Kevin Arnold Porter Hetu/UC&CS Global Tel: +1 (212) 8479552; Fax: +1 (212) 5120507; Email: [email protected]; Website: www.uccsglobal.org Mauricio Mobarak PKF North America Tel: +1 (770) 279 4560; Fax: +1 770 279 4566; Email: [email protected]; Website: www.pkfna.org Terry Snyder Praxity Tel: +44 (0)20 8774 4020; Fax +44 (0)20 8774 4029; Email: [email protected]; Website: www.praxity.com Graeme Gordon PwC Canada Tel: +1 (416) 863 1133; Fax: n/a; Email: [email protected]; Website: www.pwc.com/ca Chris Clark RSM Richter Chamberland Tel: +1 (514) 934 3400; Fax: +1 (514) 934 3408; Email: [email protected] and [email protected]; Website: Denis Chamberland/ www.rsmrch.com Tasso Lagios SF Group/KS International Tel: +44 (0)20 7566 4000; Fax: +44 (0)20 7566 4010; Email: [email protected]; Website: www.ksi.org Martin Burchmore UHY International Tel: +44 (0)20 7767 2512; Fax: +44 (0)20 7767 2600; Email: [email protected]; Website: www.uhy.com James Vrac Source: International Accounting Bulletin www.InternationalAccountingBulletin.com March 2012 y 19 Country survey canada International Accounting Bulletin

formance in several key service lines. tion of AC Poirier & Associates and Green “Our financial recovery services group Hunt Wedlake to our growing national R&R and BDO Solutions team, our IT consulting practice.” practice, as performing particularly well in Certainly, last year’s intense focus on con- Editor: Arvind Hickman 2011,” Farlinger points out. “This resulted solidation contributed much of the growth Tel: +44 (0)20 7563 5631 in fiscal growth as well as in recognition, experienced by the larger firms, which Email: [email protected] with BDO Solutions receiving top awards together sealed about 50 M&A deals this Deputy Editor: Nicola Maher from Microsoft.” past year. Tel: +44 (0)20 7563 5618 Email: [email protected] Soberman managing partner Jerry Cukier “Consolidation is happening everywhere,” Reporter: Ana Gyorkos says the firm’s performance was stronger in Ritchie points out. “There are many driv- Tel: +44 (0)20 7563 5619 most areas led by the firm’s international and ers, such as the world shrinking and firms, Email: [email protected] domestic tax practices. even the Big Four, needing more resources to Surveys Researcher: Sara Perria Tel: +44 (0)20 7563 5618 Cukier expects to benefit from joining compete in today’s markets. You can expect Email: [email protected] Crowe Horwath Global Advisers, a group of to see this continue for the next five to 10 Contributors: Gundi Jeffrey, Jeremy Woolfe Crowe Horwath International firms that spe- years.” cialise in cross-border advisory, transaction MNP closed at least 16 transactions last Group Publisher: Andy Cook support and integration consulting services. year, giving the firm a much stronger foot- Tel: +44 (0)20 7563 5616 Email: [email protected] In line with this move, the firm will rebrand hold in Eastern Canada – broadening its Sales & Marketing Director: Sarah Wootton as Crowe Soberman in September. presence in Ontario and entering Montreal Tel: +44 (0)20 7563 5650 – as well as giving it expertise in new service Email: [email protected] Solid demand areas. Campaign Solutions Manager: Keri Farrell Tel: +44 (0)20 7563 5634 E&Y’s Henry says there has been strong Grant Thornton and BDO together did Email: [email protected] demand for transformational performance about the same number of transactions, Subscription enquiries: Allan Sahbani improvement services as businesses look to again to increase their geographic footprint Tel: +44 (0)20 7563 5615 optimise efficiencies and costs. and add valuable skills and services. Both Email: [email protected] “We’re seeing businesses increase their bought several practices in the insolvency Customer Services: Tel: +44 (0)20 7563 5681 focus on supply chain management to meet and restructuring area, vying for being the Email: [email protected] the needs of customers in new and emerg- top provider in Canada in this service area. ing markets, for example. The bulk of this The Big Four made major acquisitions For more information on VRL, visit our website demand for performance improvement is in healthcare, specialised tax services, pub- at www.vrlfinancialnews.com For more information on accessing occurring across three sectors: oil and gas, lic sector consulting and IT, and merged in International Accounting Bulletin content financial services, and government and pub- several prominent mid-sized firms in various online, including a five-year archive, please lic sector.” parts of the country to strengthen their pri- telephone +44 (0)20 7563 5681 or email [email protected] Collins Barrow, a member of Baker Tilly vate company practices. International, was successful recruiting expe- The strategy, McFarland sums up, is to London Office rienced senior professionals and leaders in a “bring in skills we didn’t have before, access 34 Porchester Road, London W2 6ES, United Kingdom number of offices, Woodward points out. to an industry that’s important or a compe- Tel: +44 (0)20 7563 5600 “[This contributed] to firm’s significant tency area we need to augment”. Fax: +44 (0)20 7563 5601 success attracting new clients to our model Zeifman says consolidation in the mid- Asia Office of increased service quality through greater market space continues to create more 20 Maxwell Road local office autonomy and partner contact opportunities for the firm. #04-02J, Maxwell House with clients. Our existing clients were also “We wouldn’t be surprised to see yet Singapore 069113 Tel: +65 6383 4688 noticeably more active than 2010, as they another mid-sized firm disappear into a Big Fax: +65 6383 5433 continued to put the downturn behind them Four in the next year. At the same time, the Email: [email protected] and focus on growth.” renewed focus by the Big Four on the SME Financial News Publishing Ltd, 2012 Zeifmans says traditional assurance and market does create some competition.” Registered in the UK No 6931627 tax services held their own, experiencing A proposed merger of a totally different ISSN 0265-0223 Unauthorised photocopying is illegal. The contents some decent growth, while transactional kind will also have an impact on firms, but of this publication, either in whole or part, may not work was down. one they all support. For the past year or so, be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, Despite the continued pressure on fees, the Canadian Institute of Chartered Account- mechanical, photocopying, recording or otherwise, Grant Thornton’s audit and assurance prac- ants, CGA-Canada and CMA Canada have without the prior permission of the publishers. tice grew by nearly 10%. been in complicated discussions about mak- “The combined recovery and reorgani- ing one body from the three. sation (R&R) practice of Grant Thornton “A merger of this nature would give pro- and Raymond Chabot Grant Thornton had fessionals within Canada a unified voice to another outstanding year, benefitting from a address significant global and regulatory number of significant assignments and the changes occurring in the profession and will addition of the Alger & Associates practice continue to harmonise standards across Can- in Alberta and the Morency Conseil in Que- ada,” Henry says. bec,” says Noble. “This could be extremely valuable as we “Overall, our advisory services practice become more and more globalised, and our grew by 20% in 2011, a trend that we think economies, regulatory bodies and markets will continue in 2012 with the recent addi- intersect across borders.” <

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