march 2012 issue 503-504 www ... · academics were split over their support of rotation. university...

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Winners unveiled

IAB hosts inaugural industry awards

March 2012 Issue 503-504 www.InternationalAccountingBulletin.com

• PCAOB and EU Paliamentary hearings into audit begin • Switzerland survey: Audit threshold and competition on the rise

• Canada survey: Firms grow despite intense fee pressure

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contentsnews & analysis 02-04

news Headlines■ Stakeholders oppose firm rotation

■ Congress could block PCAOB plan

■ EC warns against ‘excessive’ lobbying

comment: women in accounting

Leaders from Crowe Horwath International and MLBennett Consulting reflect on the importance if nurturing and developing

iaB awaRds 2012 05-09

IAB hosted its inaugural industry awards to celebrate global excellence in the accounting. Our extensive coverage provides details on all of the winners and highlights of the evening

10-14: switzeRland

Swiss firms are feeling the effects of fee pressure and increased competition from law firms. Growth has been slow for the three largest firms and stable for the rest of the market

15-20: canada

Despite solid growth, Canadian firms have had to tackle increased competi-tion, fee pressure and a raft of new accounting standards. Gundi Jeffrey reports

editorial advisory BoardFrank arford, Crowe Horwath International CEO

Kevin arnold, Nexia International executive director

geoff Barnes, Baker Tilly International president and CEO

graeme gordon, Praxity executive director

stephen Jacobs, INPACT International president

Jon lisby, Kreston International executive director

James mendelssohn, MSI Global Alliance CEO

christian mouillon, Ernst & Young global vice-chair, assurance

Jeremy newman, independent

ed nusbaum, Grant Thornton International CEO

michael Reiss von Filski, Geneva Group Inter-national CEO

liza Robbins, Morison International CEO

martin van Roekel, BDO International CEO

Jean stephens, RSM International CEO

Robert tautges, HLB International CEO

Pauline wallace, PwC head of public policy and regulatory affairs

editoR’s letteRInternational Accounting Bulletin

Away from the media glare and hype of audit debates in Brussels and Washing-

ton, the CEO of a large accounting firm left his job this month for something he did not do.

His name is Piet Hein Meeter and he stepped down because of a breach of the firm’s independence rules that do not allow audit firm employees to have any financial interests in audit clients.

An investigation concluded that Meeter was not personally involved in any of the investment decisions in question or worked as part of the audit teams for these clients. But the fact he could be linked with a poten-tial conflict of interest meant he had to go.

Meeter was the CEO of Deloitte Nether-lands, a firm with revenue of €632 million and more than 4,500 staff.

Independence breaches are very uncom-mon at the rarefied heights of Big Four sen-ior management but this case highlights the ultra-cautious, risk averse nature of the audit business.

Would the CEO of a major bank, con-struction company or hospital step down under similar circumstances?

I suspect not.Meeter’s resignation will hardly raise an

eyelid from policy makers in Europe and the US who are adamant auditors lack independ-ence. After all, if auditors had been more independent and sceptical, there’s little doubt the financial crisis could have been halted in its tracks, right?

What is not recognised is that audit firms are heavily regulated and most endure rigor-ous independent oversight and frequent (and often burdensome) reviews.

Proposals that attack a perceived lack of independence need to ask the very basic question – is trying to fix a perception prob-lem worth the likely fallout?

Frequent mandatory firm rotation, let’s say between six to 12 years, is costly, impractical and could lead to a reduction in audit quality for larger, more complex engagements.

It is little wonder most US stakeholders are against it few people on the other side of the Atlantic show support.

The other issue that was debated in this month’s PCAOB hearing is how the role of

the auditor should evolve to meet current and future market demands.

I’m of the strong belief the role of the auditor should be determined before other Barnier/PCAOB proposals are put forward. Until we know how what is expected of and auditor, how can sensible proposals be made that help change the current system to a new and improved one?

It’s like asking a Formula 1 team to design a new car before knowing what new rules and circuits they will be subjected to.

a night to rememberThis month’s IAB Awards was a landmark moment for this publication. We had more than 60 people attend our inaugural indus-try awards event, including firm leaders and award hopefuls.

It was a wonderful networking event that paid tribute to excellence in our industry. We hope that in our 2013 instalment we will better the 120-plus nominations we received this year and put on an even big-ger show but retain the fun-filled and semi-informal atmosphere that made this an event to remember.

Congratulations to all the winners, shortlisted firms and everyone involved in organising the event, from our sponsors Aon, the judging panel and the IAB team.<

Arvind [email protected]

A question of independence

countRy suRveys 10-20

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content campus-wide with one login

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2 y March 2012 www.InternationalAccountingBulletin.com

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US Congress has threatened to block the Public Company Accounting Oversight Board (PCAOB) from proposing regula-tion to introduce mandatory audit firm rotation.

At a hearing in the House of Representa-tives, the Financial Services Sub-Committee said the PCAOB is not a policy-making entity and such decisions should stay in the hands of politicians.

Committee member Mike Fitzpatrick, a Republican, proposed a six-line amend-ment to the Sarbanes-Oxley Act prohibiting the PCAOB from require mandatory audit firm rotation.

In response, the PCAOB said it has not tried to push mandatory rotation but just wanted to initiate dialogue about the potential benefits of such a measure.

The move by lawmakers comes a week after the PCAOB held a two-day public hearing discussing mandatory rotation and the role of the auditor.

The US Chamber of Commerce is one of the strongest opponents to rotation and has asked the PCAOB to “stay focused on its mission”. “This is not a matter of audit-ing regulation. This is a matter of corpo-rate governance outside of the PCAOB’s realm,” the chamber stated. <

audit

Congress could block PCAOB plans

news analysis International Accounting BulletinPcaoB HeaRing

Stakeholders oppose firm rotation audit

A majority of stakeholders have opposed mandatory audit firm rotation during a US Public Company Accounting Oversight Board (PCAOB) hearing into rotation and the role of the auditor.

While investors, regulators and some aca-demics backed rotation, audit firms, large corporates and a majority of comment letters received by the audit watchdog are against swapping audit firms after a predefined peri-od of time.

Audit firms and corporates fear that regu-lar rotation will not only increase costs but could decrease audit quality, especially for larger and more complex companies.

KPMG US chairman and chief executive John Veihmeyer said mandatory rotation would create a sales culture at the firm, decrease audit quality and make it harder to attract and retain talent.

Grant Thornton US chief executive Ste-phen Chipman said there is no reason to believe rotation will enhance audit quality “but will have a negative effect on cost espe-cially for small public companies”.

Auditors received strong backing from large companies as the PCAOB heard from representatives of BlackRock, Proctor & Gamble, Goodyear and Edison Electric.

Proctor & Gamble senior vice president and controller Valarie Sheppard explained the company already uses three of the Big Four firms for audit and non-audit services and having to re-tender would pose serious concerns about independence and choice.

PNC Financial Services audit committee chair Paul Chellgren said rotation would add

cost and affect audit quality, and the deci-sion should not be taken away from audit committees.

On the flip side, investment groups were adamant rotation should be adopted.

“Unless, the PCAOB takes the regulatory action to require auditor rotation, the status quo, which encourages audit firm for life, or forever, whichever comes first, will continue and investor concerns about audit firm inde-pendence will persist,” said Peter Clapman, US chairman of investor group Governance for Owners.

The main arguments supporting rotation were building on SOX, increasing independ-ence, providing a fresh set of eyes on an audit in order to improved prudence and scepti-cism. Supporters also dismissed concerns over increased cost.

Academics were split over their support of rotation. University of Illinois professor Richard Kaplan said rotation alone would not solve the problem of auditor independ-ence because auditors are hired, fired and paid by the company they are auditing. Kaplan said rotation would “fundamentally improve the situation and counter to some degree the natural tendency of accounting firms to identify with their clients”.

City University of New York professor Al Ghosh said there is little evidence rotation would work.

“Only 25% of existing mandatory audit rotation studies globally found there are ben-efits to it,” Ghosh said. “Rotation would be limited to the Big Four if implemented and would lead to higher fees.” <


news analysisInternational Accounting Bulletin

Big Four lobbyists have come under fire at the first public hearing of EU Parliament legal affairs committee on the EC’s audit reform proposal.

Although the aim of the hearing was to discuss the EC proposals, such as mandatory rotation and audit-only firms, plenty of scorn was directed at the intense lobbying efforts of the four largest firms, PwC, Deloitte, KPMG and Ernst & Young.

EC deputy head of auditing unit Arvind Wadhera said Big Four lobbying has been excessive and is “becoming counterproduc-tive”.

Another committee member said: “The message has to go out to the Big Four that we can not let this oligopoly to continue.”

The European Group of International Accounting Networks and Associations (EGIAN), which represents the interest of mid-tier firms, also chimed into the lobby-ing debate. Director Andrew Brown called on the EU parliament to “rise above the unacceptable lobbying by some of the larger firms”.

European MEP Sajjad Karim, who is lead-ing the committee’s debate on audit reform, said the parliament is open to many views but called for constructive dialogue.

“I want to assure everyone of the inde-pendence of the committee and offer a hand

of co-operation to all interest groups in order to break the existing status quo, which is not an option,” Karim said.

The majority of the witnesses expressed little support for the EC’s proposals, such as mandatory audit firm rotation, pure audit firms and banning certain non-audit services.

Federation of European Accountants chairman Philip Johnson told the commit-tee there is room for improvement of audit quality but some of the EC proposals are detrimental.

“Pure audit firms, mandatory rotation, restricting non-audit services will isolate EU on the global stage and reduce the level of expertise with in audit firms and make the profession less attractive,” he said.

UK Corporate Governance and Reporting, Investment Management Association direc-tor Liz Murrall said investors are against mandatory rotation and banning non-audit services.

“We find non-audit services proposal are a step too far,” she said.

Brown said the EU Parliament should con-sider any measures as a package.

“Single measures as they are being looked at now on their own won’t work,” he said.

Theo Siegert, managing partner of Haen Carstanjen & Söhne and member of several German audit committees said committee

chairs are against non-audit services restric-tions.

All of the witnesses spoke of the impor-tance to improve corporate governance and audit quality but not through the EC’s pro-posals.

Karim said the committee plans to engage further with stakeholders as it debates “the most challenging dossier of my 20 year career”. <

Ana Gyorkos

EC warns against ‘excessive’ lobbyingaudit

Audit policy unit calls for stronger independenceaudit

The argument that auditing services have to be subsidised by other “more remunerative services” is “extremely worrying”, mem-bers of the European Parliament heard at an introductory session this month.

Arvind Wadhera, acting head of the EC’s audit policy unit, told members of the Legal Affairs (Juri) Committee legislators were seeking to have auditing carried out by com-pletely independent service providers.

Open mindedness over the proposed legis-lation on statutory auditing of public interest entities was the tone set by the committee’s rapporteur, a role that has passed to Sajjad Karim, a UK Conservative. Karim said his role is to come up with the “need to pro-tect citizens who are reliant on audit servic-es”. The MEP for North West England has recently taken over as rapporteur from Syed Kamall, the MEP for London.

A key aim of the EC’s proposed audit

regulation is to make the audit market more dynamic. Measures include mandatory rota-tion, mandatory retendering and prohibition of audit firms providing some non–audit ser-vices to audit clients.

On oversight, the EC proposes each EU nation designate a competent supervision authority. These authorities will have to co-operate among themselves as well as with the European Securities and Markets Authority.

Other parliamentary standing commit-tees that are to give opinions to the legisla-tive process cover Economic and Monetary Affairs (ECON), Industry, Research and Energy, and Internal Market and Consumer Protection.

The proposals’ progress through Parlia-ment includes a second hearing, considera-tion of a draft report in July, consideration of amendments in November and a vote by the committee at the end of November. Adop-

tion in plenary is planned for January 2013. On the day before the parliamentary open-

ing session, members of audit firms gathered at another meeting in Brussels ‘Audit Policy — the way forward after the crisis’.

This was moderated by Olivier Boutellis-Taft, chief executive of the Federation of European Accountants (FEE). Boutellis-Taft described some proposals — such as the six-year rotation of auditors — as “not so wel-come” and “an excessive restriction”.

Wadhera repeatedly took the line he found it “extremely perplexing that ‘the incum-bents’ should wish to retain the status quo”.

Main guest speaker, Pervenche Berès, a prominent French reformist MEP, described the proposed legislation as “an essential step in market reform”. She described the domi-nation by the Big Four as needing “urgent action”. <

Jeremy Woolfe, Brussels correspondent

ec audit ReFoRm

■ European MEP Sajjad Karim says the EC will not be swayed by lobbying.

Women vital to long-term sustainabilityAs 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

Across nearly all regions of the world, it is now common for more than half of accounting firm new hires to be women. Yet today, women only

account for 5% to 20% of partners in CPA firms, if not less.

While lack of progress of women towards leadership positions has become a frequently discussed topic in some countries, the topic still suffers from a lack of visibility in many others.

There are three primary reasons why women either slow in progression or leave accounting firms in greater numbers than their male counterparts:

The most obvious reason is a conflict between responsibilities outside of work and the intense time commitment required to progress in accounting firms. Although the role of men in many societies now includes more family commitments, women generally still have greater responsibilities outside of work that they find incompatible with cur-rent professional norms.

The second reason is related to a lack of visibility that has two parts to it: there are

not enough female role models and women leaders are often not as visible as male lead-ers.

The impact of lack of visibility is a very significant and underestimated part of the problem. Without role models to demon-strate important aspects of professional development such as work/life integration, leadership styles and business development approaches, women in the profession often limit their aspirations and/or conclude they cannot succeed because they do not identify with the style and approach of the current masculine models.

The third reason is related to career navi-gation and guidance. Many women do not have the same access to career development and advocacy relationships with senior lead-ers in the firm as their male counterparts. For instance, ambition seems harder for women to express as competitive behaviours tend to be seen as more appropriate for men than for women.

Interwoven with the above barriers are cultural aspects that organisations should address along with critical areas of skill

building and career awareness that women need access to.

The lack of progress of women is a busi-ness issue that can impact the sustainability of accounting firms if targeted efforts are not pursued. The business concerns impacted by the lack of progression of over 50% of the current talent pool include:

• Sustainable growth models and suc-cession planning models;

• Viable exit strategies;• Bottom line cost of the loss or stagna-

tion of high potential talent;• Increased need for gender diversity

that mirrors the talent pool and shift-ing marketplace; and,

• Increased need for gender diversity at the leadership level to broaden leader-ship models.

Besides these obvious economic reasons, accounting firms in many countries have yet to broaden their talent development and retention programs to encourage experienced women to commit to a long-term career.

These firms have yet to learn that there is a high cost, in terms of talent drain, if they do not assure that talented women are succeed-ing at the same rate as men.<

*By Crowe Horwath International CEO Frank Arford, MLBennett Consulting’s Mary Bennett and Crowe Horwath International communications director Cecile Barrault.

No matter the country or culture there are fundamental actions that accounting firms have to take to avoid facing the economic issues incurred if experienced women leave or do not develop.

Consider the business case issues related to the lack of progression of 50% of its talents. This includes:

• Costs incurred by the loss or stag-nation of a high percentage of the experienced women that the firm has developed for several years;

• Challenges for firms that aspire to substantial growth and to retain a common culture. These firms will have to assure that experienced, talented women, as well as men, access leadership to keep pace with and support firm growth;

• Leadership succession issues, which force many accounting firms to sell, and increase in sever-ity if the firm loses its most talented women;

• Potential loss of entry into new markets as the market shifts to rep-resent new demographics.

It is important to understand when and how your firm will implement pro-grammes such as flexible work arrange-ments, cultural awareness raising, mentor-ing and advocacy.

Look closely at the potential barriers outlined above: lack of visibility of female role models, work/life integration and lack of access to assure that developmental and advocacy experiences supporting success-ful career navigation are provided. <

■ gendeR diveRsity

How to mitigate against female talent drain

comment International Accounting Bulletinwomen in accounting

www.InternationalAccountingBulletin.com4 y March 2012

■ As many women are entering the profession than men but a gender imbalance occurs from partner level.

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?

Sixty industry leaders attended the 2012 International Accounting Bul-letin (IAB) Awards cocktail reception at John Carpenter House, London, on

Thursday 8 March. Sponsored by Aon, the awards proved an

excellent platform to network and pay hom-age to some of the highest achievers in the global accounting profession.

IAB received more than 100 nomina-tions from across the world in 13 catego-ries. Shortlists and winners were adjudi-cated by a judging panel, which was com-prised of former BDO global chief executive Jeremy Newman, ACCA technical director Sue Almond, London City lawyer Jane How-ard and IAB editor Arvind Hickman.

2012 iaB awards winners

young accountant oF tHe yeaR

trond-morten lindberg (Bdo norway)

Trond-Morten is the managing part-ner of a firm with revenue of €130m and

550 partners and staff. He helped BDO Norway through a transition from a fed-eration of firms to a single national firm. After helping conclude a merger with a for-mer Praxity firm, Trond-Morten led BDO Norway to grow 50% in the past two years.

audit innovation oF tHe yeaR

mazars - Human Rights audit

Mazars has taken a lead role in assess-ing audit clients against the Mazars Indi-cators for Human Rights Compliance, which indicate how well a company is complying with basic human rights. Judges felt the Mazars Human Rights Audit was unique, pertinent, innovative and could set a benchmark for global best practice.

tax adviseR oF tHe yeaR

Bdo international

BDO demonstrated how a co-ordinated, cross-border approach to tax planning helped a major IT client in 60 countries iden-tify and resolve tax risks and maximise its tax

position. The global network advised on a full suite of tax services, including European VAT, Enterprise Resource Planning systems, R&D credits and transfer pricing.

sustainaBle FiRm oF tHe yeaR

KPmg

Since 2007, KPMG has reduced its global carbon emissions by 29%. KPMG is the only global firm to participate in the supply chain program of the Carbon Disclosure project. KPMG held a global business sustainability summit in collaboration with the UN Global Compact and its European staff volunteered 77,500 hours of time to the community. PwC was highly commended in this category.

emPloyeR oF tHe yeaR

Plante moran

Plante Moran has a staff turnover rate of less than 13% in the past 10 years and has. Most importantly, our judges warmed to Plan-te Moran’s focus on staff just having fun, an often overlooked aspect of professional life.

■ 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.

sponsors of iaB awards

iaB awaRds 2012International Accounting Bulletin

www.InternationalAccountingBulletin.com March 2012 y 5


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. Importantly, 37% of Morison’s members have been recruited in the past two years, highlighting consistent growth.

association oF tHe yeaR

morison international

Aside from a good financial performance, Morison International displayed many examples of client and member firm sat-isfaction that eclipsed its rivals. Morison improved its strategic positions across sev-eral geographies, recently adding MacIn-tyre Hudson in the UK, Marks Paneth & Shron in the US and 2KAudit in Russia. Morison also rolled out an association-wide technical support service to all member firms.

Rising staR netwoRK

Kreston international

Kreston posted solid growth of 5% but what really impressed judges is Kreston’s successful

transition from an association to a network. This involved rolling out a common audit methodology, common quality control and audit firm inspection programme. It’s a mas-sive undertaking, and Kreston was recently welcomed to the Forum of Firms group of global networks for its efforts.

netwoRK oF tHe yeaR

Pwc

PwC capped off an impressive year of 10% growth by reclaiming the posi-tion of largest global accounting network from Deloitte. PwC is the top performing Big Four firm in audit and advisory, and regional leader in EMEA and Asia-Pacific. PwC has been heavily involved in CSR ini-tiatives and meaningful thought leadership, such as strengthening the role of audit com-mittee reports. The network has nearly dou-bled staff mobility in the past year and is widely acclaimed as an employer of choice.

iaB PeRsonality oF tHe yeaR

Jeremy newman

The IAB Editorial team’s choice for Personal-ity of the Year Award is one of the most out-spoken accountants in recent history. Jeremy Newman had an illustrious career at BDO, leading its UK firm and global network through a period of unprecedented growth.

More recently he has played troubleshooter at UK firm RSM Tenon. A champion of the mid-tier, Newman will be remembered for wearing his heart on his sleeve.

iaB liFetime acHievement awaRd

sir david tweedie

As chairman of the International Account-ing Standards Board for 10 years, Sir David Tweedie was the driving force behind the global transition from national accounting standards to international standards. Testa-ment to his hard work, passion and belief, IFRS is now the accepted set of financial reporting standards in more than 100 coun-tries, with the US and Japan likely to follow suit. This feat was not even conceivable 10 years ago. <

consultancy oF tHe yeaR

deloitte london 2012

Deloitte advised on over 200 advisory projects for the London Olympic Games in business management, procurement, operational readiness and organisational design. Deloitte’s LOGOC framework on integrated strategic and business planning is now an International Olympic Committee template. Judges said Deloitte set a ‘gold medal’ stand-ard in service provision to the global sports management industry.

■ PwC head of public policy and regulatory affairs Pauline Wallace receives the IAB Network of the Year award.

■ Deloitte London 2012 programme director Sally Ormiston collects the IAB Consultancy of the Year award from Aon managing director of professional services Keith Tracey.

What is the greatest challenge facing the profession? How are accountants vital to the success of an Olympic Games? What strategies help associations pick up and retain members?IAB editor Arvind Hickman interviews award winners to find out about their achievements and thoughts on the profession. Special guests include Sir David Tweedie, Deloitte London 2012’s Sally Ormiston, KPMG Europe ‘s Vincent Neate and Morison International’s Liza Robbins. Stay tuned to the International Accounting Bulletin website for full details.

iaB awaRds weBinaR

iaB awaRds 2012 International Accounting Bulletin


As far back as the mid-80s Aon has had significant client relationships with 13 of the top 15 international accounting organisations. The land-

scape is different today but in the interven-ing period Aon continued to serve the profes-sion’s needs and have a market position that has stood the test of time.

In today’s world there are strong links between change, growth and risk. Some of the key trends and issues that we see include regulatory activity. A number of country and regional regulators are seeking to impose change on the profession. This creates com-plexity with risk implications with some business models being under attack.

At the same time, there is consolidation as networks continue to grow and evolve.

The International Accounting Bulletin (IAB) recently reported that severe fee pres-sures and tough competition are the main characteristics of Western audit markets but in emerging economies audit firms cannot grow fast enough to meet demand. These twin pressures create risks, albeit of a differ-

ent character, and insurers will be on alert about how firms are reacting and managing those risks.In the area of litigation, the IAB recently reported that audit firms have been in the firing line of lawyers in the past year.

The increase in the number of class actions outside of the US is a trend that we are track-ing in our risk analysis. Transnational litiga-tion is increasing in volume and litigation activity is growing in a number of territories.

The issue of vicarious liability is well docu-mented and network exposures are of grow-ing concern.

core risksOutside of professional negligence, we see some other risk issues and concerns:

Is the core risk identification the assess-ment and management process linked into the management and operations of the firm?

What is Enterprise Risk Management and how can an organisation design and imple-ment a successful and working framework?

Are the risks of business continuity and cri-

sis management recognised and attended to?People risks: The competition for talent

has never been as fierce. Also, the risks of travel, the threat from the loss of key per-sonnel and security concerns require close monitoring.

What is the information security risk and is it being managed. Is there financial protec-tion available against adverse consequences of policy failure or data breach?

Aon, the leading insurance broker for global accounting networks and associa-tions, provides unique market knowledge and leverage by virtue of our history and current client portfolio.

We are responsible for the vast majority of historical innovations in this area, many of which are now standard market practice.

This unique relationship with the account-ing profession stretches back over several decades and we will continue to adapt our thinking and capabilities to these challenges.

We are proud to be associated with the first IAB Awards and would like to thank the IAB team for this opportunity. <

A risky businessInsurance 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

■ 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.

awaRds iaB awaRds 2012International Accounting Bulletin sPonsoR’s note

■ Société Générale

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

■ CHP Consulting’s

■ 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 glass version of the ‘holy grail’.

■ 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.

■ Well deserved:Sir David Tweedie picked up the IAB Lifetime Achievement Award.

■ 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.

■ Société Générale Equipment Finance with the Vendor Finance Provider of the Year award

■ Pensive: HLB International marketing manager Pauline Rottstock (centre) ponders how her life would change with an IAB award as HLB International chief executive Rob Tautges mingles with HLB quality assurance reviewer Bettina Cassegrain.

■ Class act: KPMG International global head of citizenship and diversity Lord Michael Hastings accepts the Sustainable Firm of the Year Award from Aon’s Keith Tracey.

■ Celebrations: Ed Dwan, Neil Brackstone and Lauren Gough, from BDO’s winning tax team, enjoy a drink at the IAB Awards.

The Swiss accounting market has done relatively well in the past fiscal with 4% market growth. However, pend-ing audit requirement changes and

struggling global clients demanding more for less make the future just as uncertain as most European economies.

The increase in the audit threshold for companies requiring a full audit might have a severe effect on mid-tier firms, which have so far done well with average growth of 7% in the past fiscal.

Over the past 12 months it was the global economy and sovereign debt crisis that has had an effect on Swiss firms, especially the Big Four.

Big Four firms grew by 4% on average, driven mainly by Deloitte’s reported 27% increase in revenues.

Deloitte chief executive Howard Lovell says the firm grew by securing significant engagements across key markets and indus-try sectors.

Despite Deloitte’s solid performance, the firm is still the smallest of the Big Four with annual revenues of CHF300m($331m) in the year to 31 May 2011. In comparison, the third largest firm KPMG reported annu-al fee income of CHF430m in the year to 31 September 2011.

Ernst & Young and market leader PwC reported 1% growth in the past fiscal. PwC reported revenues of CHF449m in the year to 30 June 2011 and E&Y posted CHF510m for the same period.

The gap between the top three players in the market and the fourth largest firm enable us to speak of a Big Three market in Switzerland.

Since the last International Accounting Bulletin Switzerland survey in 2008, the market has not grown so much and the Big Four are reporting similar revenues or slight contractions since fiscal 2007.

Market leader PwC reported CHF674m in the year to 30 June 2007 and in the past fiscal it reported lower earnings of CHF619m. However this is partially due to the value of the Swiss frank substantially increasing compared to the US dollar and euro over the past few years. If converted to US dollars with historic exchange rates.

PwC has grown by just under 30% since 2007, however in the domestic currency it had a 4% contraction in the same time period.

The fifth largest firm, BDO, is well ahead of its mid-tier competitors reporting fee income of CHF164m. The sixth largest firm Baker Tilly is CHF115m behind in annual revenues reporting CHF48.4m in the year to 30 June 2011.

The Big Four and BDO take up 78% of total CHF2.4bn market fees leaving the mid-tier players 22% of market share.

The Big Four were affected by fee pres-sure intensifying as international clients’ struggle, there has been increased competi-tion from Swiss law firms for tax work and clients have increasingly been demanding better value for money.

KPMG was the only Big Four firm and one of two firms in this year’s Swiss survey to report a decrease in revenues.

KPMG said its 1% drop in the year to 30 September 2011 was due to the economic climate and severe fee pressure.

One of the reasons why the mid-tier have done marginally better than the Big Four is due to the client base they serve, which is mainly domestic SME clients that have avoided the severe effects of the global eco-nomic downturn.

Swiss economy with one of the highest GDP’s globally and low unemployment rate has done well since the global economic downturn.

Baker Tilly OBT’s head of international tax group Fabian Petrus says the Swiss economy has done well up to now in com-parison to the US and some other European countries.

audit changesThe major challenge ahead for the Swiss accounting market, especially the mid-tier is a change in the Swiss Code of Obligation, which starting 1 January 2012 exempts companies’ with under CHF40m in annual revenues from a full audit.

Previously all companies with annual revenue of CHF20m had to comply with full audit requirements instead of a limited audit.

The companies that are exempt from a full audit under the law also have to have less than CHF20m on the balance sheet an increase from CHF10m and have to have less than 250 employees an increase from 50.

Ernst & Young Switzerland chairman Thomas Stenz says the change in the thresh-old is a sizeable step as there are a large number of companies that used to have a full audit and now only have the limited examination.

“I personally believe this is a good thing. So while the assurance volume may go down a little bit we will have happier cli-ents. Even our margins won’t suffer from it as it will only be the volume going down,” Stenz says.

Grant Thornton managing partner Jörg Fischer says despite a lot of clients being able to opt for a limited audit and reduce their audit cost, there is still a lot of tran-sition work these companies will require assistance with.

“In the next year or two as [companies] need to change their accounting systems and they will require some advisory work on that. So, if we do end up loosing audits we are hopefully going to gain in advisory work to assist with the transition,” Fischer says.

Petrus says the accounting change will be

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countRy suRvey International Accounting BulletinswitzeRland

Testing times aheadSwiss 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

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At a glanceRevenuelargest by revenue: PwC, CHF619msmallest by revenue: Kreston International, CHF2.1mHighest growth rate: Nexia International, 34%lowest growth rate: Kreston International, -32%

stafflargest workforce: PwC, 2,819smallest workforce: BKR International, 18most professionals: PwC, 1,941most partners: PwC, 176most admin staff: PwC, 702most offices: BDO, 31Source: International Accounting Bulletin

10 y March 2012


iaB countRy suRveyInternational Accounting Bulletin switzeRland

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networks - Fee DAtA

Rank nameRevenue (cHFm)

growth rate

Revenue split by service line (%)

year-end

audit & accounting

tax services

management consulting

corporate finance

corporate recovery/

insolvency litigation

support other

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 International*(2)

7.7 4% 51 10 - 5 - - 34 Dec-11

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

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AssoCIAtIons - Fee DAtA

Rank nameRevenue (cHFm)

growth rate


year-end

audit & accounting

tax services


corporate finance

corporate recovery/


support other

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

12 y March 2012

beneficial for the firm as it has experience in limited audit.

“In terms of limited audits the price for some of the medium-sized company clients might just be too high at the Big Four and BDO and they will opt for our firm,” Petrus says.

Swiss firms claim the full audit require-ment changes won’t effect business severely going forward, but fee pressure is worrying firm leaders.

Stenz says regulatory pressures have lead to increased pricing pressures.

“With regulatory requirements increas-ing the audit becomes more and more a compliance-based exercise and clients are not ready to pay high prices for compliance based exercises,” Stenz says.

Stenz says it is increasingly about provid-ing added value during an audit.

“The audit committee at times might have different constraints to what the regulators want us to look at. This can create further tension on the prices,” he explains.

Lovell says one of the major changes in audit services is how it could be delivered more effectively and can deliver more value.

“This is the major challenge for the audit profession,” he says.

Fischer says due to the small size of Grant Thornton Switzerland there has been intense competition from small practitioners, who do a lot of price under-cutting.

“And the problem is that the Big Four are struggling with fee pressure making them come down the market and after some of our clients,” Fischer adds.

“We have lost several clients to the Big Four and BDO, and it is a permanent struggle.”

For the past 11 years Grant Thornton International has had a small firm in Swit-zerland representing the network following a failed relationship with two larger firms.

Fischer says the firm has growth plans to increase the size by three fold in the next three years through organic and M&A growth.

non-audit services strongDespite strong competition for tax work from Swiss law firms most firm leaders say there has been an increase in international and tax planning services demand.

“That service line has actually had a small decline in revenues in the past year due to the competition from law firms. We have sizable law firms in the country that offer more and more tax services and the competition is becoming fierce,” Stenz says.

Stenz says transfer pricing and interna-tional tax planning service demand had been growing due to increased pressure from foreign tax authorities.

“Governments lack tax revenues so they are looking to get taxes from other coun-

tries. Lately, if you want to do international tax planning you have to combine it with other advisory skills to be relevant in the market,” he says.

Lovell says Deloitte’s tax practice has grown steadily despite unfavourable mar-ket conditions due to the eurozone crisis and uncertain capital markets across the globe.

“Despite these challenging markets we have experienced strong growth especially within our transfer pricing practice and global employee services. Both areas have won important engagements and gained market share.” Lovell says.

“We are also seeing great opportunities in the commodity trading industry and life sci-ences sector.”

Petrus says for Baker Tilly the main area has been corporate tax followed by personal tax services, which he says is a big deal in Switzerland, especially as there has been an increase in wealthy individuals moving to Switzerland.

“We have seen an increase in individual’s seeking tax work since the start of the finan-cial crisis.” he explains.

“More and more individuals, mainly from Russia and the UK, as a lot of hedge funds have changed location from the UK to Geneva and Zurich.”

Petrus says the firm has a strong interna-tional tax service due to clients wanting to expand beyond Swiss boarders. As a result

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networks - stAFF tABle

Rank name

total staff Partners Professional staffadministrative

staff offices

2011 2010growth

(%) 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


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Baker Tilly is looking to expand transfer pricing offering.

“At the moment in Switzerland we do not have specific transfer pricing regulation, because usually the profits stay in Switzer-land and they don’t go abroad. The fact that a lot of companies are becoming interna-tional they are coming across transfer pric-ing issues with Germany and the UK and US. I think transfer pricing will become a bigger and bigger issue for our Swiss-based companies,” he says.

BDO Switzerland managing partner Wer-ner Schiesser says advisory services have grown 18% in the past fiscal driven by cor-porate finance services such as valuation, M&A, forensics and due diligence.

“Despite the macroeconomic challenges during the past year, falling price expecta-tions for trade deals and the continuing pres-sure of private equity to invest have driven transaction volumes higher. Private equity continues to have an overhang of funds to invest and many corporates are holding rel-atively high levels of cash on their balance sheets. These two factors should continue to support deal volumes going into 2012,” he says.

E&Y’s Stenz says advisory has been a “growth engine” predominantly advising the banking and insurance sector.

“One thing that has also helped the Big Four is that clients want advisers who can

also implement. Pure strategy advisors have a harder time these days as clients today want to pay for advisor services if there is proven track record of the implementation of the recommendations given,” he says.

Stenz explains the Swiss private banking sector is going to have severe cost pressures due to reduced margins and a lower number of assets under management .

Deloitte’s Lovell says transactions related work is “patchy” as some sectors are see-ing increased M&A activity while others are stagnant.

“Across all sectors, there is a greater focus on acquisitions in developing countries, rather than developed markets as companies look to buy into the growth. However, there are now hugely inflated prices in many of these markets and many Swiss buyers are cautious about over-paying,” he explains.

Firm leaders have a firm attempt to build on their advisory and transactions service with smaller firms such as Grant Thornton looking at consolidating in order to gain market share.

Ready for changeSwitzerland is not part of the European Union, however firm leaders have strong views on the audit market reform taking place at the moment. There is no doubt that what ever legislation is to come out of the

EU it will soon or later affect Swiss firms.BDO’s Schiesser says the proposed regula-

tion has had no direct effect on business yet. “But it triggered an interesting and impor-

tant discussion in our industry on market concentration and ways to further improve audit quality. I am sceptical over the pro-posed changes having the effect they are meant to have. Once the EU has reformed the audit market it will for sure affect the Swiss market. We will sooner or later be an autonomous follower,” he says.

Petrus says that the potential effects of the reform could be positive for Baker Tilly, especially if joint audits would make it back to the reform as mandatory.

“Most of the listed companies are audited by the Big Four and if these clients would require a joint audit then they would come to us. The second interesting thing is the splitting of audit and non-audit services. The Big Four do get a lot of their revenues in consulting and if they were required to drop some of these engagements in order to keep their structure then this would signal an opportunity for us to get some of those consulting engagements,” he says.

Stenz says E&Y is vigorously against two of the proposals: one is the firm rotation and the other one is audit-only firms.

“I think the EU should now quickly decide what they want, because if they debate it for the next five years that does

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AssoCIAtIons - stAFF tABle

Rank name


staff offices

2011 2010growth

(%) 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



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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.ch and www.bakertillyinternational.com

Fabian Petrus

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.crowehorwath.net

Bernard Deloménie

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/switzerland

Marcel De Boni

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-international.net

Susanne Martius

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.moorestephens.ch

Jacques Grossen

Morison International Telephone: +44 (0)207 638 4005; Fax: +44 (0)207 638 4006; Email: [email protected]; Website: www.morisoninternational.com

Liza Robbins

MSI Global Alliance Tel: +44 (0)207 583 7000; Fax: +44 (0)207 583 7577; Email: [email protected]; Website: www.msiglobal.org

James Mendelssohn

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.pkf.com

Oliver Grosse-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 Honegger: Email: [email protected]; Website: www.pwc.ch

Markus Neuhaus/Urs Honegger

Source: International Accounting Bulletin

not help our profession, because then that brings uncertainty and makes it harder to attract the right people. We not only want the EU to make the right decision, but also a quick decision,” he says.

And, attracting staff is something that can be a challenging task for Swiss firms as competition from insurance companies and banks is tough.

Petrus agrees it’s hard to find people in Switzerland.

“The knowledge level is very high, but the problem is that the level of graduates is low and there is a big competition from banks and insurance companies to get that

staff. It’s very competitive as such compa-nies offer high salaries,” he says.

Petrus says the recruitment market is competitive in Switzerland.

“The knowledge level is very high, but the problem is that the level of graduates is low and there is a big competition from banks and insurance companies to get that staff. It’s very competitive as such compa-nies offer high salaries,” he says.

Despite difficulties in recruiting, firms are thinking of steadily increase there head-counts with no predicted redundancies on the horizon.

Stenz says Big Four recruiting has become

easier over the past few years. “There is competition for people in the

market but the competition for people is more intense in the mid-tier arena as it is among the Big Four and BDO, as BDO does have a very good reputation in the market. Very often people want to start their career in a Big Four firm,” he says.

Schiesser says it is hard to find experi-enced chartered accountants because many of them leave the profession for areas with less restriction, regulation and control.

As the auditing market changes and com-petition escalates, accounting firms might be in for some rough waters ahead. <


It’s been an eventful year for Canada’s accounting firms. A sluggish economy, influenced by ongoing recessionary struggles in Europe and the United

States, proposals for radical changes to audit-ing, an onslaught of new standards, stiffer competition for work leading to fee pressure and an unprecedented wave of consolidation are changing the landscape of the industry.

Alan MacGibbon, chief executive of Deloitte Canada, says the effects of the recession, particularly in Europe, continued to have a significant impact on clients’ deci-sions in the past year.

“The uncertain future of traditionally steady government bonds, combined with the threat of global debt contagion, had a cooling effect on our clients’ decisions to invest in their business. In Canada, overall, our clients remained risk averse.”

KPMG chief executive Bill Thomas points out it has been a year of slow growth for Canada’s economy.

“Although our clients’ confidence improved, there was still uncertainty that impacted their spending and investment decisions,” he says. “We gradually saw a return to business as usual and, as a result, some companies repositioned themselves and adjusted their offerings.”

The reduced confidence in the economy,

says PwC chief executive Bill McFarland, led to fewer deals and negatively affected “all aspects of our business”.

“A heightened cost focus at many compa-nies led to price competition and a smaller consulting and tax wallet for many of our services. This was partially offset by rev-enue from additional IFRS related services,” he says.

BDO Canada chief executive Keith Far-linger says the competitive landscape in Can-ada is heating up.

“As the pool of businesses seeking to change accounting firms is reduced, the mar-ket becomes much more competitive. One of the results of this is that some firms drasti-cally reduce audit fees, negatively affecting the bottom line for all firms,” he explains.

The good news, according to Collins Bar-row national chair Dean Woodward, is that Canada continued to have a solid economy.

“The beginnings of a US economic recov-ery certainly helped many Canadian busi-nesses working and investing cross-border. Low interest rates and a strong Canadian dollar were favourable for clients seeking to expand their operations in the US, although it was less favourable for exporters, includ-ing natural resources and other commodities whose prices tend to be fixed in US dollars.

“Construction activity was relatively

strong, especially compared to the US. Sup-ply chain problems arising from the natural disasters in Japan and Thailand proved trou-blesome for clients in the automotive sec-tor in southern Ontario while the oil-sands expansion continued to drive strong growth in most sectors of the Alberta economy.”

Ernst & Young chairman and chief execu-tive Trent Henry says for the most part com-pany balance sheets remain strong and public sector finances are robust.

“Canada offers low business startup costs, a well-regulated and resilient financial system and an educated workforce – all good things

■ canada

At a glanceRevenuelargest by revenue: Deloitte, C$1.5bnsmallest by revenue: Integra International, C$4mHighest growth rate: AGN North America, 34%lowest growth rate: Kreston International, -49%

stafflargest workforce: Deloitte, 8,068smallest workforce: Integra International, 25most professionals: Deloitte, 5,513most partners: Deloitte, 538most admin staff: Deloitte, 2,017most offices: BDO Canada, 124Source: International Accounting Bulletin

Strong growth in evolving marketDespite a solid growth, Candian firms have had to tackle increased competition, fee pressure and a raft of new accounting standards. gundi Jeffrey reports on an evoloving profession

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with the power to move the needle in the direction of increased stability and sustained growth,” Henry says.

Despite the economic challenges last year, most of Canada’s firms saw substantially more growth than the year before, some moving into the double-digit range.

Canada’s largest firm, Deloitte, post-ed impressive revenue growth of 9% to C$1.51bn ($1.51bn) in the year to 31 May 2011. All of the Big Four grew with third placed KPMG (C$1.14bn) gaining on PwC (C$1.18bn) in the battle for second position.

The largest mid-tier firm, Grant Thornton, increased revenue by 11% to C$515m and sixth placed BDO grew revenue 8% to C$425m.

Driving some of this growth is a plethora of new standards implemented in Canada last year – IFRSs and new accounting stand-ards for private companies (ASPEs), along with international standards on auditing becoming Canadian GAAS.

“From the beginning of 2011, when com-panies commenced reporting under IFRS, our focus turned to dealing with the transi-tion almost solely in our capacity as audi-tor,” explains Phil Noble, chief executive and executive partner of Grant Thornton Canada. “While there were some non-audit clients who sought advisory help with the transition, this was much reduced from prior years.”

Overall, the transition to IFRS has been somewhat mixed.

“While many of the smaller reporting issu-er clients were slow in preparing, there were very few significant issues that arose with this group and, for the most part, the transition was uneventful,” Noble adds. “However, for other clients the transition has required sig-nificant effort and a number of them strug-gled with the conversion.”

Woodward says while the large implemen-tation push has subsided, many clients are still working out “the myriad uncertainties and complexities of these rules that will con-tinue indefinitely”.

“IFRS further encouraged the idea that companies often need accounting advisers separate from their auditors, and we are seeing more and more of that kind of work, even amongst junior issuers who are not nec-essarily required to do so under independ-ence standards,” Woodward adds.

“Also, we are seeing new work in surpris-ing places – for example, we have found that we are auditing more South American enti-ties that are listing on Canadian exchanges because of the common accounting language that IFRS has created.”

Paul Rhodes, a partner and co-leader of Soberman’s IFRS Group, says the implemen-tation of both IFRS and ASPEs haven’t had a big impact on the firm’s services, although “we have been providing more assistance in sourcing the new standards and interpreting them for our clients”.

Virtually all of Zeifmans’ unregulated pri-vate companies adopted ASPE, says Larry Zeifman, the firm’s managing partner.

The implementation of these standards, which are simpler and more streamlined than Canadian GAAP, “has been well received and the transition was very smooth.”

Daryl Ritchie, CEO of MNP, adds: “This is the business we’re in. Accounting standards have always been a major service offering of the firms and, over the years, they have changed. With change come education, sys-tem changes and helping clients change. But there was a lot to be done for us to get ready, a lot to be done to help clients be ready. More work went into helping clients convert than in a normal year.”

Having made a successful transition to

IFRS, Canada’s accounting leaders would now like to see the US do the same.

“The adoption of IFRS by the US is essen-tial if there is going to be a single set of high-quality global accounting standards. Multi-ple standards create confusion and a lack of comparability of data,” McFarland says.

“The current uncertainty affects all com-panies and creates a situation where financial statement comparability is challenging, mak-ing the right investment and capital alloca-tion decisions more difficult and increasing costs related to training and maintaining separate accounting records.”

audit reform concernsThe various proposals on audit reform floated this past year in Europe and the US – including changes to the audit report, mandatory rotation of auditors, joint audits, mandatory tendering and further restrictions on non-audit services provided by auditors – pose a bigger concern.

“We will be watching where the changes in Europe, the US and Canada will go and what the implications of these changes will be,” Thomas says.

Henry stresses that E&Y strongly supports measures to promote auditor independence “for the good of investor confidence and the capital markets”.

“But we do not believe that mandatory firm rotation, for example, is a necessary or constructive means to promote auditor scep-ticism or to improve audit quality,” he says.

Canadian firms are also monitoring audit reform developments in Europe with interest.

“We are concerned, especially about the European Commission’s draft proposals, because there is little or no empirical evi-dence of any benefits to support many of them,” McFarland says. “They would be unduly costly or could have negative unin-tended consequences, especially at a time of economic weakness.”

Despite these preoccupations, business overall was good for the firms last year.

“[KPMG] saw particularly significant growth in our Western Canada practices and across the advisory practice as a whole, par-ticularly in the public sector,” Thomas says. “We are seeing the benefits of our strategic investments in public sector and healthcare work. There was slower growth in our audit practice than in previous years, as we see less regulatory driven growth and continued audit fee pressure. Our mid-market enter-prise practice continues to thrive as well.”

Deloitte’s consulting practice achieved double-digit growth, with particularly strong performance across technology and human capital practices.

“[The financial advisory practice] respond-

■ canada

top 20 firms

Rank FirmRevenue

($m)growth

1 Deloitte 1,505.0 9%

2 PwC 1,179.7 4%

3 KPMG 1,138.1 6%

4 Ernst & Young 870.0 2%

5 Grant Thornton 515.0 11%

6 BDO Canada 425.0 8%

7 MNP(1) 351.0 8%

8 Collins Barrow(2) 143.0 3%

9 RSM Richter Chamberland

83.8 3%

10 Mallette(e)(i) 52.3 6%

11 MacKay(i) 37.5 4%

12 Welch(3) 30.0 7%

13 Soberman(4) 29.0 7%

14 Schwartz Levitsky Feldman(5)

21.7 0%

15 Davidson & Company(6)

21.5 13%

16 DMCL(e)(i) 19.7 6%

17 Ginsberg Gluzman Fage & Levitz(7)

19.6 3%

18 Manning Elliot(e)(i) 19.5 6%

19 Zeifmans(6) 17.7 8%

20 Millard Rouse & Rosebrugh(5)

17.7 1%

Notes: (e) IAB estimate; (i) = independent, no global affiliation; Firms are members of the following global networks and associations: (1) Praxity; (2) Baker Tilly International; (3) BKR International; (4) Crowe Horwath International; (5) HLB International; (6) Nexia International; (7) DFK International. Source: International Accounting Bulletin


■ canada

networks - Fee DAtA

Rank nameRevenue (c$m)

growth rate


year-end

audit & accounting

tax services


corporate finance

corporate recovery/


support other

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 International*

43.4 7% 56 16 6 - - - 22 Dec-11

11 HLB International* 43.2 1% 62 20 6 2 6 - 4 Dec-11

12 Crowe Horwath International*

39.6 4% 58 17 5 1 11 8 0 Dec-11

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

■ canada

AssoCIAtIons - Fee DAtA

Rank nameRevenue

($m)growth

rate


year-end

audit & accounting

tax services


corporate finance

corporate recovery/


support other

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 Chartered Accountants/IAPA

77.8 6% 65 22 11 - - - 2 Dec-11

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 America*(1)

33.7 34% 26 21 14 - - - 39 Dec-10

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

iaB countRy suRveyInternational Accounting Bulletin canada


■ canada

networks - stAFF DAtA

Rank name


staff offices

2011 2010growth

(%) 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

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. Source: International Accounting Bulletin

■ canada

AssoCIAtIons - stAFF DAtA

Rank name


staff offices

2011 2010growth

(%) 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 Accountants/IAPA*

448 364 23 87 66 361w 298 - - 14 12

6 IGAF Polaris* 329 - - 54 - 217 - 58 - 7 -

7 AGN International-North America*

204 203 0 24 24 148 148 32 31 6 6

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



■ canada

network & AssoCIAtIon ContACts

name telephone, Fax, email, website Region head/contact

AGN International-North America

Tel: +1 (303) 743 7880; Fax: +1 (303) 743 7660; Email: [email protected]; Website: www.agn-na.org Rita Hood

Baker Tilly International Tel: +1 (403) 298 1588; Fax: +1 (403) 298 5814; Email: [email protected]; Website: www.bakertillyinternational.com

Dean Woodward

BDO Canada Tel: +1 (416) 369 3056; Fax: +1 (416) 367 3912; Email: [email protected]; Website: www.bdo.ca Keith Farlinger

BHD Association of Chartered Accountants/IAPA

Tel: +44 (0)125 2720 810; Fax: +44 (0)125 272 8830; Email: [email protected]; Website: www.iapa.net Susan Humphry

BKR International Tel: +1 (212) 964 2115; Fax: +1 (212) 964 2133; Email: [email protected]; Website: www.bkr.com Maureen Schwartz

Clarke Henning Group/Polaris International

Tel: +1 (305) 670 0580; Fax: +1 (305) 670 3818; Email: [email protected]; Website: www.polarisinternational.org Julio Gabay

Crowe Horwath International

Tel: +54 (11) 5918 3702; Fax: +54 (11) 4394 0123; Email: [email protected]; Website: www.crowehorwath.net

Eduardo Pestarino

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.enterpriseworldwide.org

Patrick Pruett

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.accountants.org

Julio Gabay

Integra International Tel: +1 (604) 817 1500; Fax: +1 (604) 939 1872; Email: [email protected]; Website: www.integra-international.net

Richard Purcell

KPMG Tel: +1 (416) 777 8500; Fax: +1 (416) 777 8818; Email: [email protected]; 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 America

Tel: +1 (201) 291 2660; Fax: +1(201) 368 1944; Email: [email protected]; Website: www.msnainc.org Steven Sacks

Morison International Tel: +44 (0)207 638 4005; Fax: +44 (0)207 638 4006, Email: [email protected]; Website: www.morisoninternational.com

Liza Robbins

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: www.rsmrch.com

Denis Chamberland/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

countRy countRy suRveyInternational Accounting Bulletin

ed strongly to the changing focus of our clients as they repositioned themselves for growth in the aftermath of the financial cri-sis,” MacGibbon points out.

“And, as the financial advisory market improved, we worked closely with them to capture, protect and enhance value for their stakeholders.”

Deloitte’s M&A and forensic dispute ser-vices also did well, while there was double-

digit growth across energy and resources, financial services and public sector industry practices.

PwC’s highest growth was in Western Canada, led by its energy practice, McFar-land explains. The consulting practice also had good growth, while audit and assur-ance results were bolstered by the regulatory change resulting from IFRS conversions. In tax, stronger growth areas included scientif-

ic research and experimental development, transfer pricing and dispute resolution.

“Our private company services practice continued to grow and, from an industry perspective, the mutual fund and investment management practice results were strong and the public sector practice had a good pipeline of business transformation and eHealth man-dates,” McFarland explains.

BDO’s growth was driven by robust per-

canada


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Financial News Publishing Ltd, 2012Registered in the UK No 6931627ISSN 0265-0223Unauthorised photocopying is illegal. The contents of this publication, either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publishers.


formance in several key service lines. “Our financial recovery services group

and BDO Solutions team, our IT consulting practice, as performing particularly well in 2011,” Farlinger points out. “This resulted in fiscal growth as well as in recognition, with BDO Solutions receiving top awards from Microsoft.”

Soberman managing partner Jerry Cukier says the firm’s performance was stronger in most areas led by the firm’s international and domestic tax practices.

Cukier expects to benefit from joining Crowe Horwath Global Advisers, a group of Crowe Horwath International firms that spe-cialise in cross-border advisory, transaction support and integration consulting services. In line with this move, the firm will rebrand as Crowe Soberman in September.

solid demandE&Y’s Henry says there has been strong demand for transformational performance improvement services as businesses look to optimise efficiencies and costs.

“We’re seeing businesses increase their focus on supply chain management to meet the needs of customers in new and emerg-ing markets, for example. The bulk of this demand for performance improvement is occurring across three sectors: oil and gas, financial services, and government and pub-lic sector.”

Collins Barrow, a member of Baker Tilly International, was successful recruiting expe-rienced senior professionals and leaders in a number of offices, Woodward points out.

“[This contributed] to firm’s significant success attracting new clients to our model of increased service quality through greater local office autonomy and partner contact with clients. Our existing clients were also noticeably more active than 2010, as they continued to put the downturn behind them and focus on growth.”

Zeifmans says traditional assurance and tax services held their own, experiencing some decent growth, while transactional work was down.

Despite the continued pressure on fees, Grant Thornton’s audit and assurance prac-tice grew by nearly 10%.

“The combined recovery and reorgani-sation (R&R) practice of Grant Thornton and Raymond Chabot Grant Thornton had another outstanding year, benefitting from a number of significant assignments and the addition of the Alger & Associates practice in Alberta and the Morency Conseil in Que-bec,” says Noble.

“Overall, our advisory services practice grew by 20% in 2011, a trend that we think will continue in 2012 with the recent addi-

tion of AC Poirier & Associates and Green Hunt Wedlake to our growing national R&R practice.”

Certainly, last year’s intense focus on con-solidation contributed much of the growth experienced by the larger firms, which together sealed about 50 M&A deals this past year.

“Consolidation is happening everywhere,” Ritchie points out. “There are many driv-ers, such as the world shrinking and firms, even the Big Four, needing more resources to compete in today’s markets. You can expect to see this continue for the next five to 10 years.”

MNP closed at least 16 transactions last year, giving the firm a much stronger foot-hold in Eastern Canada – broadening its presence in Ontario and entering Montreal – as well as giving it expertise in new service areas.

Grant Thornton and BDO together did about the same number of transactions, again to increase their geographic footprint and add valuable skills and services. Both bought several practices in the insolvency and restructuring area, vying for being the top provider in Canada in this service area.

The Big Four made major acquisitions in healthcare, specialised tax services, pub-lic sector consulting and IT, and merged in several prominent mid-sized firms in various parts of the country to strengthen their pri-vate company practices.

The strategy, McFarland sums up, is to “bring in skills we didn’t have before, access to an industry that’s important or a compe-tency area we need to augment”.

Zeifman says consolidation in the mid-market space continues to create more opportunities for the firm.

“We wouldn’t be surprised to see yet another mid-sized firm disappear into a Big Four in the next year. At the same time, the renewed focus by the Big Four on the SME market does create some competition.”

A proposed merger of a totally different kind will also have an impact on firms, but one they all support. For the past year or so, the Canadian Institute of Chartered Account-ants, CGA-Canada and CMA Canada have been in complicated discussions about mak-ing one body from the three.

“A merger of this nature would give pro-fessionals within Canada a unified voice to address significant global and regulatory changes occurring in the profession and will continue to harmonise standards across Can-ada,” Henry says.

“This could be extremely valuable as we become more and more globalised, and our economies, regulatory bodies and markets intersect across borders.” <

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