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www.InternationalAccountingBulletin.comJanuary 2015 Issue 545

IAB 2015 World Survey

● SEC sanctions Baker Tilly Hong Kong ● FRC files Deloitte UK complaint

● FRC investigates PwC UK over Tesco blunder ● Network profile: Santa Fe Associates

A road less travelled

IAB 545v2.indd 1 27/01/2015 17:54:41

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IAB 545v2.indd 2 27/01/2015 17:54:44

January 2015 y 1www.InternationalAccountingBulletin.com

NEWS

FEATURES 04

02-03

CONTENTS

■■ SEC■sanctions■Baker■Tilly■Hong■Kong.

■■ Deloitte■subject■to■complaint■by■FRC■over■Aero■scandal.

■■ FRC■to■investigate■PwC■UK■over■Tesco■accounting■blunder.

■■ US■‘anonymous’■audit■reports■in■potential■conflict■with■IAASB.

04: INTERVIEW: SANTA FEAna Gyorkos■speaks■to■Alfredo■Spilzinger,■chairman■of■Santa■Fe■Associates,■the■most■recent■addition■to■the■Forum■of■Firms,■about■the■organisation■and■its■future■plans.

EDITOR’S LETTERInternational Accounting Bulletin

■■ TOP■5■RANKING■2004■VS■2014■

Firm 2004 revenue ($m) Difference (2004)

PwC 17,400.0 PwC■and■Deloitte■$1bn

Deloitte■ 16,400.0Deloitte■and■EY■$1.9bn■revenue■gap

EY 14,500.0

KPMG 13,500.0KPMG■and■BDO■$10.6■bn■gap■

BDO 2,942.0

■ FEE SPLIT

Firm 2014 revenue ($m) Difference (2014)

Deloitte■ 34,200.0 Deloitte■and■PwC■$248m

PwC 33,952.0 PwC■and■EY■$6.5bn■revenue■gap■

EY 27,369.0

KPMG■ 24,820.0 KPMG■and■BDO■$17.8bn■gap■

BDO■ 7,021.9

Soure:■IAB

-

The past year was a solid one for the 52 networks and associations survey by Inter-national Accounting Bulletin with their combined revenue increasing by 6% to $181.7bn.

Organic growth on the back of invest-ment coupled by M&A seems to have been the successful formula for many as they adapt to operate in the more volatile condi-tions of this decade.

Improved growth and shrinking econom-ic concerns have given way to other wor-ries, which have more to do with societal and geopolitical issues. As EY chairman Mark Weinberger rightly notes, external challenges include the rise of nationalism around the world, which could have a tre-mendous impact on businesses as a whole and accounting firms in particular.

Internally, international networks and associations will have to outline their corporate philosophies clearly in order to attract and retain talent – a highly valued commodity in many markets, as well as ensure they keep their member firms happy and don’t lose them in a fierce transactions market.

Looking at the top five networks (the Big Four plus BDO) in the past 10 years, they have successfully grown from businesses with combined fee income of $64.7bn in 2004 to $127.3bn in 2014, a 97% increase in a decade. While revenues were smaller in 2004, the gaps between the top five were somewhat more proportionate (see the table

below). With Deloitte and PwC remaining the leading networks by fee income, the dif-ference between the second and third rank-ing Big Four firm stood at $1.9bn in 2004, but has increased to $6.5bn in 2014.

The gap between the smallest of the Big Four and the mid-tier’s biggest, BDO, was never small, but it increased by $7.3bn in a decade, from $10.5bn to $17.8bn.

Many firm leaders speaking to the IAB from around the world tend to use the term the Big Two in their markets and the global trend seems to indicate their statements might not be so far-fetched.

Additionally, the gap between the large players and the mid-tier widens, despite BDO’s climb from $2.9bn to just over $7bn in the ten-year time period.

With the fundamental question of the EU’s audit reform and the UK’s competition enquiry focusing on the competitiveness of the market and the ‘too big to fail’ question, it seems contradictory to see the market evolving towards one featuring even bigger gaps between the top players.

Perhaps the EU’s audit reform and its 83 options to choose from by member states will offer some additional opportunities to the mid-tier market; however it could also easily be argued that it might just result in implementation inconsistency across the EU leading to little change to the market.

Ana Gyorkos & Vincent Huck

Are we heading towards a Big Two market?

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• Contentyoucantrust.Wehave125yearsofexperiencedelivering accountancy news.

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

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

O5-24: WORLD SURVEY 2015The■profession■worldwide■is■learning■to■be■more■comfortable■in■an■evolving■economic■landscape■characterised■by■fundamental■regulatory■changes■and■geopolitical■upheaval.■Despite■improv-ing■revenues■over■the■past■12■months,■firm■leaders■still■face■difficult■choices■about■where■and■how■to■position■their■businesses■to■ensure■success■and■future■growth.

SURVEY 05-24

IAB 545v2.indd 1 27/01/2015 17:54:45

2 y January 2015 www.InternationalAccountingBulletin.com

NEWS International Accounting BulletinROUND-UP

Facebook page World■Accounting■Intelligence

Scan our QR code for quick smartphone access to■IAB

Join our online community

LinkedIn■Group■World■Accounting■Intelligence

Twitter WAI_News

IAB ONLINE – JANUARYTop 5 articlesFRC■to■investigate■PwC■UK■over■Tesco■accounting■blunder

KPMG■US■gender■suit■opt-ins■rise■to■900

Deloitte■subject■to■formal■complaint■by■FRC■over■Aero■scandal

BDO■reshuffles■its■Greek■operations

Grant■Thornton■International■reports■$4.7bn■in■global■revenue

Most retweeted articleUS■‘anonymous’■audit■reports■in■potential■conflict■with■IAASB■standards

Read in 155 countries

UK 21%

US 13%

India 5%

Singapore 5%

Malaysia 4%Rest of the world 46%

HONG KONG

SEC sanctions Baker Tilly Hong KongThe■US■Securities■and■Exchange■Commission■(SEC)■has■sanctioned■Baker■Tilly■Hong■Kong,■as■well■as■two■of■the■firm’s■top■members■of■staff■for■their■failure■to■audit■cor-rectly■the■financial■statements■of■a■company■it■charged■with■fraud■in■2012.

An■SEC■investigation■found■that■Baker■Tilly■Hong■Kong,■alongside■director■Andrew■Ross■and■former■director■Helena■Kwok,■ignored■the■

“red■flags”■indicating■a■total■of■176■related-party■transactions■detailed■in■an■independent■forensic■account-ing■report.■

The■SEC’s■investigation■also■found■that■the■audit■team■had■failed■to■obtain■properly■the■evi-dence■necessary■to■support■its■audit■report,■including■conflicting■infor-mation■about■the■source■of■a■$4.6m■capital■contribution■to■one■of■the■company’s■subsidiaries.

As■a■consequence,■it■ruled,■the■audit■report■issued■by■Baker■Tilly■Hong■Kong■contained■unqualified■opinions■of■China■North■East■Petro-leum’s■financial■statements.

The■firm■agreed■to■settle■the■SEC■charges■and■must■pay■$75,000■in■audit■fees■as■well■as■a■pre-judgment■interest■payment■of■$9,101.

Baker■Tilly■Hong■Kong■will■also■be■banned■from■accepting■any■new■US■audit■clients■until■an■independ-ent■consultant■has■reviewed■and■confirmed■the■firm’s■audit■policies■

and■procedures■are■compliant■with■both■SEC■regulation■and■PCAOB■standards.

Kwok■and■Ross■also■agreed■to■settle;■they■have■been■ordered■to■pay■fines■of■$10,000■and■$20,000,■respectively,■and■have■been■banned■from■practising■as■accountants■on■behalf■of■any■SEC-governed■entity■for■a■minimum■of■three■years.

UK

Deloitte subject to complaint by FRC over Aero scandalThe■UK’s■Financial■Reporting■Coun-cil■(FRC)■has■filed■a■formal■com-plaint■against■Deloitte■UK■in■rela-tion■to■the■audit■of■Aero■Inventory,■an■aviation■stockholding■group■which■collapsed■in■2009■following■doubts■over■its■accounting.

A■former■partner■of■the■firm,■John■Clennett,■was■also■subject■to■a■formal■complaint,■as■well■as■Aero■Inventory’s■former■finance■director,■Hugh■Bevan.

The■FRC’s■complaint■alleges■the■conduct■of■Deloitte■UK,■Clennett■and■Bevan■“fell■significantly■short■of■the■standards■reasonably■to■be■expected”■of■members■of■the■ICAEW■in■the■context■of■the■preparation■and■audit■of■the■company’s■finan-cial■statements■for■the■years■ending■30■June■2006,■2007■and■2008.

The■issuing■of■a■formal■complaint■by■the■FRC■means■there■is■sufficient■evidence■of■misconduct■to■warrant■the■case■being■taken■to■an■inde-pendent■tribunal,■where■the■FRC■will■present■the■allegations■against■the■defendants■included■in■the■

complaint■itself.A■spokesperson■for■the■FRC■said■

the■tribunal■hearing■date■is■to■be■set■shortly.

UK

FRC to investigate PwC UK over Tesco accounting blunderThe■UK’s■Financial■Reporting■Council■(FRC)■has■launched■an■investigation■into■the■work■of■PwC■as■external■auditor■to■Tesco,■as■the■accounting■scandal■surrounding■the■UK■grocery■giant■appears■far■from■over.

The■investigation■centres■on■the■preparation,■approval■and■audit■of■the■financial■statements■for■the■financial■years■ending■25■February■2012,■23■February■2013■and■22■February■2014.

While■the■examination■of■the■preparation,■approval■and■internal■audit■will■pertain■to■Tesco,■the■external■audit■investigation■will■centre■on■PwC’s■conduct■as■the■com-pany’s■auditor.

The■FRC’s■announcement■marks■the■latest■development■in■an■ongoing■accounting■scandal■which■engulfed■Tesco■throughout■the■second■half■of■2014■and■now■looks■to■be■threatening■the■business’s■long-standing■auditor,■PwC.

Commenting■on■the■announce-ment,■a■spokesperson■for■PwC■said■the■firm■intends■to■cooperate■fully■with■the■FRC■in■its■enquiries,■and■added:■“We■take■our■responsibilities■very■seriously■and■remain■commit-ted■to■delivering■work■to■the■high-est■professional■standards.”■<

NEWS ROUND-UP

MOVERS & SHAKERS

John■Veihmeyer■(pictured)■has■been■appointed■to■the■board■of■trustees■of■the■Financial■Accounting■Foundation■(FAF),■replacing■Grant■Thornton■International■chief■executive■Ed■Nusbaum.■

The■FAF■is■the■US■equivalent■of■the■IFRS■Foundation,■and■oversees■two■standard-setting■bodies,■the■Financial■Accounting■Standards■Board■

(FASB)■and■the■Governmental■Accounting■Standards■Board■(GASB).

Veihmeyer’s■appointment■is■for■a■four-year■term,■

ending■31■December■2019.■In■April■2010■he■took■over■as■KPMG■US■chairman■and■chief■executive■for■a■five-

year■term.

PKF International Africa regional director Theo

Vermaak has been elected as chair of the Forum of Firms , effective January 2015.

Sacha■Romanovitch■has■been■

elected■as■chief■executive■of■Grant■

Thornton■UK■and■will■succeed■

current■chief■executive■Scott■

Barnes■in■June.

The■appointment■makes■

Romanovitch■the■only■female■chief■

executive■among■the■top■10■UK■

accounting■firms.

Deloitte Australia has appointed Cindy Hook as chief executive officer, effective from 1 February, marking the first appointment of a female leader by a Big Four firm in the country.

IAB 545v2.indd 2 27/01/2015 17:54:50


NEWSInternational Accounting Bulletin ANALYSIS

One■of■MSI■Global■Alliance’s■founding■members■Abels■Decker■Kuhfuss■&■Partner■(ADK)■has■merged■with■ex-Moore■Stephens■firm■Dr■Müller,■Haeb■&■Partner■in■Germany,■effective■1■January.

Following■the■merger,■the■firm■will■operate■under■the■name■Abels■Decker■Kuhfuss■Lenzen■&■Partner■(ADKL).As■well■as■17■partners,■ADKL■has■100■members■of■staff■and■offers■services■in■legal,■tax,■audit,■corporate■finance,■restructuring■and■consulting.

BDO International has replaced its

member firm in Greece, BDO Hellas, with the firm resulting from the split of Baker Tilly Hellas late last year.

Following the termination of the agreement between BDO Hellas and BDO International as of 31 December 2014, the two former members trading as BDO Hellas will return to trading under the names of Delta Partners Certified Public Accountants and DP Business Solutions.

Kreston■International■has■added■Chinese■firm■Shenzhen■Yida■CPAs■to■

its■network.The■newly■added■firm■has■11■

partners,■as■well■as■100■members■of■staff,■and■offers■a■range■of■audit,■accounting,■tax■and■consulting■services■to■both■domestic■and■international■clients■in■Shenzen.■

Kreston International has also added member firm Exactt Consulting to its network in West Africa. With offices in Algiers, Algeria and Tunis, Tunisia, Exactt Consulting provides a range of audit, accounting, tax and consulting services.

Grant■Thornton■UK■has■acquired■Recovery■Cost■Auditing■Group■(RCAG),■a■billing■audit■firm■specialising■in■the■telecommunications■and■energy■sectors.

RCAG■provides■forensic■auditing■and■retrospective■billing■services,■identifying■refund■and■savings■opportunities■through■the■exploration■of■anomalies■and■known■deficiencies■in■charging■structures■over■up■to■a■six-year■history.■As■part■of■the■acquisition,■six■RCAG■employees■are■set■to■join■Grant■Thornton■UK.

FirmMovements

AUDIT

US ‘anonymous’ audit reports in potential conflict with IAASB

The revised auditor reporting standards issued by the International Auditing and Assurance Standards Board (IAASB), which include disclosing the name of the engage-ment audit partner, might create a conflict between US rules and the international standards.

The IAASB final standards are intended to enhance the relevance of audit reports and transparency in the financial reporting chain, a long-standing demand of investors.

Among measures to improve the audi-tor’s report, IAASB rules include a section to express key audit matters, or additional information subject to the auditor’s profes-sional judgement, and notably, the disclo-sure of the engagement audit partner that conducted the work. Such requirements are mandatory to listed companies, and volun-tary for non-listed businesses.

According to the general provisions of International Standards on Auditing (ISAs) an auditor may be required to comply with additional regulatory requirement, as well as the international standards.

The standards’ guidance states: “The ISAs do not override law or regulation that governs an audit of financial statements. In the event that such law or regulation differs from the ISAs, an audit conducted only in accordance with law or regulation will not automatically comply with ISAs.”

It also states that an audit can be con-ducted in accordance with both, perform-ing additional audit procedures to comply

with the relevant standard and the national law. The Association of Chartered Certi-fied Accountants head of auditing practice David York said the guidance doesn’t clearly address the conflict between laws and ISAs.

“An easy – but incredibly odd – auditor’s report could say ‘complied with ISAs except for this non-disclosure’,” York said.

The guidance also states that in rare cir-cumstances, the auditor would be allowed not to sign off the audit report if that creates a personal security threat, but this does not include the threat of legal liability or profes-sional sanctions.

However, the guidance indicates that the law or national standards of a given coun-try may establish further requirements that are relevant to determine whether or not the disclosure of the engagement partner is com-pulsory.“The guidance was intended to make sure

that auditors did not use some spurious rea-son about personal security,” York said.

However the last part of the guidance could be a hint, according to York, that if the law prevents the disclosure there might be a way around. “But it is too woolly; I think law preventing

disclosure would be rare,” he added.In August the US Council of Institutional

Investors (CII) urged the Public Company Accounting Oversight Board (PCAOB) to include this issue on its standard-setting agenda. The CII was reissuing a previous call, when the PCAOB discarded the idea of

requiring auditors to sign their reports on a mandatory basis.

PCAOB chairman James Doty said he saw the need for the auditors to have at least an option to sign their reports.“All the major markets except the US have

it,” Doty said. “We’re not expecting them to sign; we are giving auditors alternatives about whether further to disclose the name.”

In opposition to the investors’ view, the US audit profession has so far showed little support for the idea of a mandatory signa-ture on the audit reports.

The American Institute of Certified Pub-lic Accountants’ vice-president firm services and global alliances, Mark Koziel, said:

“What value will it bring to the end-user to have the engagement partner physically sign the audit report with their names instead of the name of the firms? Auditors are already doing the best job they possibly can, and signing their name is not going to raise the level of quality of the audit.”

The US Center for Audit Quality’s execu-tive director, Cindy Fornelli, said national policymakers are pursuing more transpar-ency in this area. “The PCAOB has said it will release a supplemental request for com-ment on a proposal that would require dis-closure of the engagement partner and oth-ers involved in the audit, either in the audit report or in a separate form to be filed with the PCAOB,” she said. The PCAOB’s stand-ard-setting agenda has been recently updated to discuss this issue during H1 2015.■<

IAB 545v2.indd 3 27/01/2015 17:54:50


FEATURE International Accounting BulletinNETWORK PROFILE

www.InternationalAccountingBulletin.com

FEATURE International Accounting Bulletin

Intellectual support for a better world

Ana Gyorkos speaks■to■Alfredo■Spilzinger,■chairman■of■Santa■Fe■Associates,■the■most■recent■addition■to■the■Forum■of■Firms,■about■the■organisation■and■its■future■plans

Ana Gyorkos, editor, International Accounting Bulletin: You have a long and distinguished career in the accounting industry. Would you be

able to summarise your career in the profes-sion, up to starting with Santa Fe Associates International? Spilzinger: I have been working in the profes-sion since 1960 when I got my first degree as a public accountant in Buenos Aires, Argen-tina. I also have several other degrees and PhDs from Argentina and the US. Balancing career and study used to mean little time to sleep earlier in my career.

My career turned international when my accounting firm in Argentina collaborated with The Economist Intelligence Unit and the firm also became the member firm of Jolliffe Cork Ingram.

In 1980, when Sir Anthony Jolliffe merged operations with Grant Thornton Interna-tional, my firm was admitted as the Argen-tine member firm of Grant Thornton Inter-national and I was elected as member of the board in Chicago and director for Central and South America.

After more than 20 years with Grant Thornton International, I decided to change my practise direction and I was invited to become partner and international director of Santa Fe Associates, a consulting firm based in Santa Fe, New Mexico, US.

Since then I have expanded the service offering to include accounting and tax and built a network of firms.

Therefore, my life has so far been devoted to the profession and the industry.

IAB: You’re currently in the role of chairman of the executive board of Santa Fe Associates. For our readers who have not come across the organisations, could you please tell us a bit more about the organisation?Spilzinger: Santa Fe Associates’ roots go back to 1943 when Los Alamos Laboratory was founded by President Roosevelt as a conse-quence of a letter Albert Einstein wrote to

him about the necessity to expand nuclear investigation. After the war, its work focused on innovation with the highest level of excel-lence.

In 1980 three vice-presidents decided to devote their efforts to teaching those disci-plines and founded the Santa Fe Institute.

In 1997 a decision was made to abandon teaching and to formalise a consulting firm called Santa Fe Associates International.

Therefore our roots are professional excel-lence, academic recognition and a very deep respect for others. In our case the others are our clients. With me joining the organisation a big push was made towards accounting and we have made it.

IAB: What is your geographical coverage like?Spilzinger: We currently have 125 offices throughout the world in more than 60 coun-tries. All our firms are exclusive member firms; some of them are certified member firms and others non-certified member firms – what other networks call correspondent firms.

All our firms are independently operated by their partnership, but with a very close surveillance by our technical officer who implements technical reviews every two years for the certified firms, and every three years for the non-certified. Quality is the goal we cannot leave aside in our plans.

In terms of coverage, we’re present across most of Latin America and Africa. In Asia and in Europe we’re growing at a very fast pace. Our short-time destination will be to complete our Western European coverage, and in the US as well.

IAB: What is the general profile of your member firms? Are you a multidisciplinary organisation and welcome law firms and consulting businesses as well? And what is the average size of your member firms or offices in terms of partners and staff num-bers?

Spilzinger: We only have member firms deal-ing with economic, accounting, tax and consulting matters. For experts in another professional field, we have strategic alli-ances – environmental, actuarial, biological or medical matters – which we call on for specific skills to assist our clients.

We cannot express an average size within our network due to the very big differences between countries – Nicaragua versus Ger-many, or Dubai versus Argentina. We don’t accept firms with just one partner or firms that practise in several specialties, for exam-ple selling software and the like.

IAB: Santa Fe Associates appears slightly different from some competitors in the net-works and associations arena as it has an academic board. Why is this board impor-tant and how does it operate as part of your organisation? Spilzinger: We build our success on the con-cept that professional practise is a continua-tion of academic effort.

Due to extensive academic background of our leadership we’re far from being just reporting financial statements or to fulfill-ing a tax form. We deliver business solutions based on the best expertise and knowledge available.

IAB: What are your main objectives for Santa Fe Associates? Spilzinger: We have a five-year plan, which will see us by 2020 being the professional organisation giving the best intellectual sup-port to our clients in order to help create bet-ter financial markets, better countries and a better world. Our commitment to our clients is to lead them to a better place and a better society. Mankind has always been equipped to fight, and our forefathers have fought against animals, for food and space to live.

Today, some of this fight is happening in the markets and in business, and this is where we can help – and fight without fraud or corruption. <

IAB 545v2.indd 4 27/01/2015 17:54:52


SURVEYInternational Accounting Bulletin WORLD SURVEY 2015

Trading places...

The■profession■worldwide■is■learning■to■be■more■comfortable■in■an■evolving■economic■landscape■characterised■by■fundamental■regulatory■changes■and■geopolitical■upheaval.■Despite■improving■revenues■over■the■past■12■months,■firm■leaders■still■face■difficult■choices■about■where■and■how■to■position■their■businesses■to■ensure■success■and■future■growth

IAB 545v2.indd 5 27/01/2015 17:54:54


SURVEY International Accounting BulletinWORLD

At the International Accounting Bulletin we titled last year’s World Survey report Who dares wins, and how true that has proved to be as

the industry grows on the back of invest-ment and M&A in 2014.

For many of those who dared, the gamble has paid off; however dark clouds remain as pre-2008 growth levels remain an elu-sive memory. Overall, the 52 networks and associations surveyed by the IAB reported combined fee income of $181.7bn, up 6% year-on-year.

This is an improvement on last year’s 3% growth. The growth in 2014 was mainly driven by the 27 surveyed networks, which reported a combined fee income of £159.5bn, up 6%.

In the spirit of 6%, 2014 saw all the Big Four report around 6% growth with com-bined fee income at $120.3bn.

Deloitte has, for the first time ever, retained its position as the largest global accounting firm for the second year running. Deloitte beat close rival PwC by $248m as the network reported fee income of $34.2bn in the year to 31 May 2014.

Deloitte global chief executive Barry Salz-berg tells IAB he feels “proud” of the net-work’s performance, as he says growth was recorded across all service lines and regions.

“Dealing with the economic environ-ments around the world, various reces-sions in different parts of the world and as the world emerged from these, to produce aggregate revenues of just over $34bn at a 6.5% growth rate is something that we are very pleased with and very proud of.”

Salzberg says the network also benefited from “identifying areas in the world where growth is happening and demand is pre-sent, like cyber for example, so being able to invest in it and produce”.

Second-ranked PwC, despite the Booz & Company (now Strategy&) acquisition, missed out on the number one spot by reporting $33.9bn in the year to 30 June 2014.

In October, PwC said the benefits of the Booz & Company deal are yet to be accounted for, as “the S t rategy& acquisition was only completed in the last quarter of FY 2014 and there-fore its ful l impact wil l not be felt until FY 2015”.

The promise of those revenues indicates that 2015 is likely to be another year of close competition between the Big Two rivals.

Just over $6.5bn behind PwC, third-ranked EY had another consecutive year of 6% growth with fee income of $27.3bn in the year to 30 June 2014.

EY global chairman and chief execu-tive Mark Weinberger says the network’s investments are an important contributor to the growth.

“A number of our investments are multi-year projects. We’re spending $1.2bn in technology to improve our IT infrastruc-ture and to introduce technology designed to transform the way we do business with our clients,” Weinberger says.

“We are also increasing investment in service-line tools and core business systems. We’re investing $500m in our analytics expertise, recognising the increasing value our clients place on data as a business asset.”

Like its other Big Four rivals, Weinberger confirms M&A will remain an important part of EY’s strategy in order to achieve the 2020 growth plans.

“We will continue to look for acquisitions that are a good fit with our culture, strat-egy and people,” he adds. “We’re focused on opportunities that are closely related to our traditional services and give careful consideration to our ability to protect our independence and brand.”

Fourth-ranked, KPMG, reported fee income of $24.8bn in the year to 31 Septem-ber 2014, breaking the two-year trend of under 5% year-on-year growth.

Newly appointed KPMG chairman John

Deloitte18.8%

PwC18.7%

EY15%

KPMG13.7%

Mid-Tier33.8%

■ MARKET SHARES – THE BIG FOUR VS THE MID-TIER

Source:■IAB

Big Four66.2%

Top SixMid-Tier14.4%

Rest of theMid-Tier19.4%

■ THE BIG FOUR VS THE TOP SIX MID-TIER AND THE REST OF THE MID-TIER

Source:■IAB

IAB 545v2.indd 6 27/01/2015 17:54:55


SURVEYInternational Accounting Bulletin WORLD

■■ SERVICE■LINE■FEE■SPLIT■–■AUDIT■&■ACCOUNTING■

$m %

PwC 15,137.0 3

Deloitte 13,300.0 2

EY 11,277.0 3

KPMG 10,460.0 2

BDO 4,002.5 5

RSM 2,181.0 17

Grant Thornton International 2,033.3 4

Baker Tilly International 1,815.2 7

Crowe Horwath International 1,597.3 1

Moore Stephens International 1,393.4 0

Source: International Accounting Bulletin

■■ SERVICE■LINE■FEE■SPLIT■–■TAX■

$m %

PwC 8,813.0 8

EY 7,224.0 4

Deloitte 6,500.0 7

KPMG 5,270.0 6

BDO 1,474.6 14

RSM 1,260.7 15

Grant Thornton International 945.7 2

Baker Tilly International 881.2 4

Crowe Horwath International 844.9 14

Nexia International 829.6 42

Source: International Accounting Bulletin

■■ SERVICE■LINE■FEE■SPLIT■–■ADVISORY

$m %

Deloitte 14,400.0 9

PwC 10,002.0 9

KPMG 9,090.0 10

EY 8,866.0 12

Grant Thornton International 1,749.6 7

BDO 1,544.8 16

Crowe Horwath International 993.7 23

Baker Tilly International 866.4 1

Nexia International 864.7 41

RSM 837.9 11Note: Includes all fees earned from services that are not audit & accountingand tax Source: International Accounting Bulletin

■■ AVERAGE■FEE■SPLIT■–■TOP■10■NETWORKS■IN■2008,■2013■AND■2014■(%)

2008 2013 2014

Audit & accounting 53 48 46

Tax 23 23 24

Advisory 24 29 30

■■ AVERAGE■FEE■SPLIT■–■BIG■FOUR■IN■2008,■2013■AND■2014■(%)

2008 2013 2014

Audit & accounting 52 43 42

Tax 24 23 23

Advisory 24 34 35

Veihmeyer tells IAB the good performance is mainly down to investment – organic and M&A: “M&A will remain an important part of our business,” Veihmeyer says, “but we’re also looking at organic investments, such as the $600m multi-year investment programme into our core audit services. We are also making significant investments into our data analytic capabilities that will sup-port all three of our businesses lines.”

He also emphasises the role of strategic alliances like the recent one between KPMG UK and McLaren on analytics. “I think these type of alliances will become more and more important in the future,” Veih-meyer adds.

The■next■six■Following the Big Four, the next six largest global networks reported combined revenues of $26bn, up by an average 8%.

The largest mid-tier network, BDO, earned a record $7bn in fee income in the year to 30 September, up 9%.

BDO chief executive officer Martin van Roekel says the network’s growth is a com-bination of M&A and organic growth.

“It’s interesting to see those member firms which have been able to do M&A, have been able to realise a very interesting level of organic growth,” he says.

Sixth-ranked Grant Thornton Interna-tional had a slight slowdown in growth in the past year, after reporting the highest growth rate among the top 10 global net-works in 2013. The network earned $4.7bn in fees in the year to 30 September 2014, up 5% year-on-year.

“Our organic growth is solid. We have had many new clients coming on-board in the second half of 2014 and that will prob-

ably be reflected in the 2015 numbers,” Grant Thornton International chief execu-tive Ed Nusbaum says.

It’s been a good year for seventh-ranked RSM International as Baker Tilly UK decid-ed to join the network after it bought RSM Tenon in a pre-pack deal in 2013. RSM International chief executive Jean Stephens says the network’s 18% increase in fee income to $4.4bn in the year to 31 Decem-ber 2014 was mainly down to the addition of Baker Tilly UK.

She says that despite the branding of Baker Tilly UK yet to be decided, the firm has integrated well with the network.

“They’re very involved in all of our initia-tives and they have ongoing dialogue with our US firm in terms of bilateral business opportunities,” Stephens adds.

Baker Tilly International chief executive and president Geoff Barnes says the net-work did face uncertainty at the start of the year as Baker Tilly UK left, however, despite that, “our revenue has gone remark-ably well. And our level of referred work across our network has increased through 2014 and into 2015, so we’re also seeing an

increase in the requirements for taxation services, particularly consulting,” Barnes adds. Baker Tilly International reported fee income of $3.5bn in 2014, up 5%.

Ninth-ranked Crowe Horwath Interna-tional also had a good year with an 8% increase in fee income to $3.4bn in the year to 31 December 2014.

Crowe Horwath International chief exec-utive officer Kevin McGrath says: “We’re pleased from the standpoint of the growth that we’ve incurred during the year, and that’s been primarily organic growth on the part of our members, but it’s also from a select number of new firms that we’ve added from key markets in the course of the year.”

At number 10, Nexia International cements its position with fee income of $3bn in the year to 30 June 2014. Nexia Interna-tional chief executive Kevin Arnold says the network has had an outstanding few years and says one of its strenghts is its geographi-cal coverage, especially on both sides of the Atlantic.

A network going through a couple of very turbulent years is 12th-ranked PKF Interna-tional, which reported $2.3bn in revenues,

IAB 545v2.indd 7 29/01/2015 08:22:14



■ WORLD SURVEY 2015

NETWORKS: FEE DATA

Rank NameFee income

($m)Growth

rate(%)

Fee split (%)

Year-endAudit &

accountingTax

servicesManagement

consultingCorporate

finance

Corporate recovery/insolvency

Litigation support Other

NETWORKS

1 Deloitte* 34,200.0 6 39 19 33 9 - - - May-14

2 PwC* 33,952.0 6 44 26 - - - - 30 Jun-14

3 EY* 27,369.0 6 41 26 24 9 - - - Jun-14

4 KPMG* 24,820.0 6 42 21 - - - - 37 Sep-14

5 BDO■(1) 7,021.9 9 57 21 - - - - 22 Sep-14

6 Grant■Thornton■International* 4,728.6 5 43 20 29 - - - 8 Sep-14

7 RSM■International■(2) 4,391.2 18 50 29 19 - - - 2 Dec-14

8 Baker■Tilly■International* 3,562.8 5 51 25 10 2 3 1 8 Jun-14

9 Crowe■Horwath■International■(3)

3,435.9 8 46 25 11 2 1 1 14 Dec-14

10 Nexia■International* 3,072.6 5 45 27 6 1 1 2 18 Jun-14

11 Moore■Stephens■International■(4)

2,683.3 0 52 25 8 2 1 1 11 Dec-14

12 PKF■International■(5) 2,388.1 -5 58 21 9 3 2 1 6 Jun-14

13 Kreston■International* 2,035.0 5 45 29 10 2 2 - 12 Oct-14

14 HLB■International* 1,889.6 13 50 22 12 2 2 1 11 Dec-14

15 Mazars* 1,459.2 6 52 11 - - - - 37 Aug-14

16 UHY■International* 640.0 -1 60 18 10 1 1 1 9 Dec-14

17 Russell■Bedford■International*■(6)

390.0 2 55 23 7 - - - 15 Jun-14

18 ECOVIS■International■(7) 380.0 6 43 28 9 3 2 2 13 Dec-14

19 ShineWing■International*■(8) 263.8 7 69 5 9 4 - - 13 Jun-14

20 TGS■Global* 177.1 12 71 16 3 1 1 2 6 Dec-14

21 Santa■Fe■Associates■(9) 170.4 36 68 15 17 - - - - Dec-14

22 Reanda■International■(10) 144.1 18 59 11 8 1 3 1 17 Dec-14

23 IECnet/EPR* 140.8 22 57 23 6 9 - 2 3 N/A

24 Auren* 110.0 10 46 33 17 1 1 1 1 Dec-14

25 FinExpertiza■(11) 70.8 – 45 10 5 - - 1 39 Jun-14

26 SMS■Latinoamérica■(12) 69.6 3 47 28 18 1 3 - 3 Dec-14

27 UC&CS■America* 47.7 2 74 16 10 - - - - Dec-14

Total revenue/growth 159,613.5 6

Notes:■(1)■BDO■revenue■includes■$1.6bn■from■alliance■member■firms;■(2)■RSM■International■revenue■includes■$52.9m■from■alliance■firms;■(3)■Crowe■Horwath■International■revenue■includes■$880.7m■from■alliancen■member■firms;■(4)■Moore■Stephens■International■revenue■includes■$50.7m■from■alliance■member■firms;■(5)■PKF■International■revenue■includes■$801.7m■from■alliance■member■firms;■(6)■Other■includes■corporate■finance,■corporate■recovery/insolvency■and■litigation■support;■■(7)■ECOVIS■International■revenue■does■not■include■fee■income■of■associated■US■partners.■If■it■were■to,■the■combined■revenue■of■the■network■would■be■$566.4m;■(8)■ShineWing■International■data■for■FY■2013■has■been■amended■from■last■year’s■submission;■(9)■Santa■Fe■Associates■revenue■includes■$38.1m■from■alliance■member■firms;■(10)■Reanda■revenue■includes■$11.9m■from■alliance■or■correspondent■member■firms;■(11)■FinExpertiza■revenue■includes■$27m■from■alliance■member■firms;■(12)■SMS■Latinoamérica■revenue■includes■$2.6m■from■alliance■or■correspondent■member■firms.■*Disclaimer■=■Only■data■from■the■named■member■firm■or■the■exclusive■member■firms■within■a■network/association■is■included.■Data■relating■to■correspondent■and■non-exclusive■member■firms■is■not■included.

Source:■International Accounting Bulletin

down 5% year-on-year. Despite a raft of losses which followed PKF UK and BDO UK’s merger in 2012, PKF International chief executive John Sim remains positive.

Sim says the network has done well recruiting new members in some of the key economies where it had lost most of its rep-resentation, such as the UK and Australia.

He adds that the new additions are “more active, ambitious and willing to cooperate then any of the former firms”.

AssociationsSurveyed associations have also had lift in growth as combined fees earned are at $22.1bn, up 5% year-on-year, an improve-ment on 2013’s 3%.

Praxity remains in the lead for associa-tions with $4.3bn reported in fee income in 2014, up 7%. Praxity includes Mazars in its revenues due to the network being a mem-ber of the association, with Mazars contrib-uting $1.5bn to the association’s revenues

in 2014. Praxity’s chairman Rick Anderson describes the year as solid and says that in many ways the performance is above expectations especially in light of what the profession has gone through since 2009.

Out of the 25 surveyed associations, seven report a decrease in year-on-year revenues, which is up from five in financial year 2013.

Audit vs advisoryIn a difficult audit environment, the share

IAB 545v2.indd 8 27/01/2015 17:54:57




ASSOCIATIONS: FEE DATA

Rank NameFee income

($m)Growth

rate(%)

Fee split (%)

Year-endAudit &

accountingTax

servicesManagement

consultingCorporate

finance

Corporate recovery/ insolvency

Litigation support Other

ASSOCIATIONS

1 Praxity* 4,364.1 7 49 22 10 1 1 1 16 n/a

2 LEA■Global* 3,009.7 3 47 33 14 2 1 2 1 Dec-14

3 GGI■Geneva■Group■International*

2,149.0 6 27 29 24 6 6 5 3 Dec-14

4 PrimeGlobal* 2,080.4 15 53 26 8 2 1 2 8 May-14

5 BKR■International* 1,400.0 3 56 31 - - - - 13 Jun-14

6 AGN■International*■(1) 1,340.5 2 52 27 13 3 5 - - Mar-14

7 DFK■International■(2) 1,237.8 13 50 29 6 1 3 4 7 Sep-14

8 IAPA■(3) 1,153.1 7 - - - - - - - n/a

9 Morison■International* 779.2 1 56 20 5 5 3 4 7 Dec-14

10 CPA■Associates■International* 646.0 -1 47 32 12 - - - 9 Oct-14

11 MSI■Global■Alliance* 604.3 -3 54 25 8 2 1 1 9 Dec-14

12 MGI* 536.1 -4 - - - - - - - Jun-14

13 Alliott■Group*■(4) 431.0 - 26 52 8 3 2 2 7 Dec-14

14 KS■International* 358.1 3 49 20 7 2 2 - 20 n/a

15 Integra■International* 307.5 4 55 25 15 - - 5 - Jul-14

16 Enterprise■Worldwide* 299.1 2 38 37 20 1 1 3 - Dec-13

17 JHI■Association* 295.9 -14 42 35 7 1 1 2 12 Dec-13

18 INPACT* 274.4 1 52 31 12 1 1 1 2 Dec-13

19 ANTEA* 246.9 4 45 27 14 2 1 6 5 Dec-14

20 EuraAudit■International* 186.3 -22 52 16 21 3 3 - 5 Dec-14

21 GMN■International* 172.7 -2 48 34 6.5 3 - 1.5 7 Sep-14

22 Parker■Randall■International* 136.3 1 55 25 15 5 - - - Dec-14

23 UC&CS■GLOBAL* 57.3 2 69 19 12 - - - - Dec-14

24 Abacus■Worldwide* 45.0 194 35 20 11 7 3 9 15 Dec-14

25 ACEE* 22.4 -7 51 11 - - - 4 34 Dec-14

Total revenue/growth 22,133.1 5%

Notes:■(1)■AGN■International■has■changed■its■year-end■and■basis■for■measuring■member■revenue;■as■such■the■fee■income■figure■for■2013■has■been■revised.■AGN■International’s■litigation■support■fee■income■is■included■under■corporate■recovery/insolvency.■(2)■DFK■International’s■2014■fee■income■includes■US$13.7m■earned■by■correspondent■or■alliance■member■firms.■(3)■IAPA’s■total■staff■figure■for■2014■includes■data■from■the■association’s■UK200Group;■this■data■was■not■included■in■IAPA’s■2013■total■staff■figures.■(4)■Alliot■Group■was■not■able■to■provide■data■for■2013.■*Disclaimer■=■Only■data■from■the■named■member■firm■or■the■exclusive■member■firms■within■a■network/association■is■included.■Data■relating■to■correspondent■and■non-exclusive■member■firms■is■not■included.


of advisory in firms’ revenue has increased drastically in recent years. This trend con-tinued in 2014, with most interviewed firm leaders admitting that their organisation’s organic growth was achieved on the back of tax and advisory.

This raises a number of questions regard-ing the auditor’s independence and a lot of regulators have looked into the matter ques-tioning whether firms should offer audit and advisory, or audit or advisory services.

“The profession positions itself as accountants being ‘trusted advisors’, so by the very nature of who we are, we are there

to advise,” HLB International chief execu-tive Rob Tautges says.

“Audit is an important service through which the profession delivers value back to society by having accurate financial infor-mation, but is it the driver of financial suc-cess? For most firms, no.”

He argues that while audit is important, an accounting firm’s financial success depends on having a balanced suite of ser-vices from audit to tax and advisory.

At BDO, Van Roekel is proud that audit still represent 57% of his organisation’s revenues. However he admits that tax and

advisory is where there are more opportuni-ties available at the moment.

McGrath says Crowe Horwath Interna-tional pursues a strategy which includes both audit and advisory. “Despite the restrictions which are well founded on pro-viding non-audit services to audit clients, there is still a big marketplace,” he says before adding that his organisation tends to offer advisory services to larger clients, ones for which it doesn’t necessarily offer audit services.

The restrictions he refers to, have to do with the recent regulatory changes

IAB 545v2.indd 9 27/01/2015 17:54:57




NETWORKS: STAFF DATA

Rank Name Total staff Partners Professional staff Administrative staff Offices

2014 2013 Growth (%)

2014 2013 2014 2013 2014 2013 2014 2013

NETWORKS

1 Deloitte* 210,400 202,885 4 10,247 10,189 163,676 157,505 36,477 35,192 674 677

2 PwC* 195,433 184,235 6 10,002 9,597 153,051 143,111 32,380 31,527 758 776

3 EY* 188,292 174,808 8 9,703 9,468 141,859 130,569 36,730 34,771 700 700

4 KPMG* 162,031 155,180 4 9,137 8,991 124,753 119,348 28,141 26,841 700 700

5 BDO 59,428 56,389 5 5,037 4,908 45,940 43,461 8,451 8,020 1,328 1,264

6 Grant■Thornton■International*

40,197 38,543 4 2,975 2,907 30,273 28,735 6,949 6,901 725 693

7 RSM■International 37,443 31,896 17 3,279 2,871 28,172 23,657 5,992 5,368 732 678

8 Crowe■Horwath■International 31,040 29,414 6 3,544 3,352 22,338 21,363 5,158 4,699 726 684

9 Baker■Tilly■International* 26,846 26,847 0 2,603 2,754 19,916 19,754 4,327 4,339 693 738

10 Moore■Stephens■International

26,290 27,081 -3 2,495 2,636 19,486 19,595 4,309 4,850 626 667

11 Nexia■International* 24,066 23,131 4 2,707 2,739 16,548 15,774 4,811 4,618 576 604

12 PKF■International 20,869 22,543 -7 2,624 2,660 13,645 15,383 4,600 4,500 435 385

13 Kreston■International* 20,319 20,090 1 1,522 1,504 15,891 15,645 2,906 2,941 633 623

14 HLB■International* 18,708 16,474 14 1,868 1,701 13,813 12,090 3,027 2,683 605 455

15 Mazars* 14,088 13,746 2 748 742 11,401 11,047 1,939 1,957 250 250

16 UHY■International* 7,669 7,661 0 791 789 5,629 5,693 1,249 1,179 296 275

17 Russell■Bedford■International

5,353 5,198 3 635 613 3,925 3,750 793 835 247 241

18 ECOVIS■International 4,686 4,610 2 666 657 3,464 3,425 556 528 274 262

19 ShineWing■International*■(1)

4,555 4,320 5 199 192 3,940 3,760 416 368 26 24

20 Santa■Fe■Associates 3,195 2,437 31 568 396 1,979 1,452 648 589 125 82

21 Reanda■International 2,529 1,882 34 132 105 2,145 1,549 252 228 82 70

22 TGS■Global* 1,963 1,852 6 175 152 1,547 1,463 241 237 150 141

23 SMS■Latinoamérica 1,928 1,913 1 165 167 1,610 1,597 153 149 48 48

24 IECnet/EPR* 1,849 1,682 10 282 213 1,176 1,164 391 305 162 124

25 UC&CS■America 1,579 2,075 -24 193 213 1,140 1,533 246 329 112 126

26 Auren* 1,507 1,285 17 212 190 1,177 998 118 97 50 46

27 FinExpertiza 1,059 - - 35 - 848 - 176 - 20 -

Totals 1,113,322 1,058,177 5 72,544 70,706 849,342 803,421 191,436 184,051 11,753 11,333

Notes:■(1)■ShineWing■International■data■for■FY■2013■has■been■amended■from■last■year’s■submission■*Disclaimer■=■Only■data■from■the■named■member■firm■or■the■exclusive■member■firms■within■a■network/association■is■included.■Data■relating■to■correspondent■and■non-exclusive■member■firms■is■not■included.■


and especially the EU audit reform which passed in 2014. The reform, consisting of a European directive and a European regulation on statutory audits, will introduce mandatory audit firm rotation and prohibit rendering certain non-audit services to audit clients.

OptionsFirm leaders welcomed the changes with mixed feelings. For Tautges at HLB, the prohibition of non-audit services to audit

clients will reduce the efficiency of the pro-fession. “Taken to an extreme, there is a problem with the auditors offering advisory services,” he explains.

“However, as an auditor you have such a good knowledge of the company you are auditing, that, so long as you aren’t mak-ing management decisions – if you’re giving advice on observations and knowledge of the industry that you’re serving, I think it provides great value for the clients.”

Asked whether he’s hopeful the new rules

will offer an opportunity for mid-tier net-works to win more advisory work from companies audited by the Big Four, Taut-ges says he’s not counting on it and expects a game of musical chairs between the Big Four for both audit and advisory services.

However, many other interviewed firm leaders see an opportunity. “In quite a few cases, in the tenders where we participate, when BDO doesn’t win the audit it wins tax and advisory work,” Van Roekel says, before adding that it’s an interesting growth

IAB 545v2.indd 10 27/01/2015 17:54:58




ASSOCIATIONS: STAFF DATA

Rank Name Total staff Partners Professional staff Administrative staff Offices

2014 2013 Growth (%)

2014 2013 2014 2013 2014 2013 2014 2013

ASSOCIATIONS OF INDEPENDENT FIRMS

1 Praxity 35,485 33,496 6 2,813 2,711 27,136 25,425 5,536 5,360 625 613

2 LEA■Global 23,437 23,090 2 2,222 2,056 16,961 16,640 4,254 4,394 617 586

3 PrimeGlobal 19,384 18,132 7 2,336 2,063 13,127 13,133 3,921 2,936 810 793

4 GGI■Geneva■Group■International

16,120 14,583 11 1,670 1,411 – – – – 675 643

5 AGN■International■(1) 13,455 – – 1,769 – 11,686 – – – 708 684

6 BKR■International 12,831 11,518 11 1,501 1,515 10,023 8,702 1,307 1,301 573 587

7 DFK■International 11,011 10,930 1 1,270 1,194 7,777 7,869 1,964 1,867 417 388

8 IAPA■(2) 10,200 6,774 51 1,214 836 6,932 3,891 2,054 2,047 335 328

9 Morison■International 9,255 8,697 6 907 832 6,700 6,359 1,648 1,506 252 247

10 CPA■Associates■International 7,424 7,416 0 834 833 5,372 5,366 1,218 1,217 321 321

11 MSI■Global■Alliance 7,150 7,303 -2 746 784 5,205 5,157 1,199 1,362 155 195

12 MGI 6,693 6,813 -2 838 853 5,855 5,960 – – 315 327

13 KS■International 4,116 4,070 1 438 432 2,991 2,877 687 761 183 165

14 Integra■International 4,004 3,468 15 408 440 2,625 2,453 971 575 186 192

15 INPACT 3,788 3,853 -2 516 534 2,788 2,824 484 495 233 232

16 ANTEA 3,484 3,016 16 478 433 2,545 2,233 461 350 176 149

17 Alliott■Group■(3) 3,345 – n/a 445 – 2,544 – 356 – 212 –

18 EuraAudit■International 3,264 3,118 5 383 390 2,266 2,236 615 492 269 260

19 JHI■Association 3,047 3,596 -15 396 479 2153 2,515 498 602 155 173

20 GMN■International 2,639 2,634 0 317 303 1,873 1,923 449 408 131 131

21 UC&CS■Global 1,712 2,358 -27 211 281 1,237 1,716 264 361 165 179

22 Parker■Randall■International 1,604 1,618 -1 214 210 1,269 1,274 121 134 102 101

23 Enterprise■Worldwide 1,347 1,272 6 195 – 860 – 292 – 96 –

24 Abacus■Worldwide 500 250 100 68 37 325 146 107 67 32 18

25 ACEE 148 187 -21 27 37 98 121 23 29 19 27

Totals 205,443 178,192 6 22,216 18,664 140,348 118,820 28,429 26,264 7,762 7,339

Notes:■Staff■numbers■from■correspondent■and■non-exclusive■member■fimrs■may■be■included■in■total■fee■income;■(1)■AGN■International■has■changed■its■year-end■and■basis■for■measuring■member’s■revenue■and■headcount.■Accordingly,■2013■headcount■is■not■available.■(2)■IAPA’s■total■staff■figure■for■2014■includes■data■from■the■UK200Group;■this■data■is■not■included■in■IAPA’s■2013■total■staff■figures.■(3)■Alliott■Group■was■not■able■to■provide■data■for■2013.■Data■relating■to■correspondent■and■non-exclusive■member■firms■may■be■included.■


avenue for BDO. “It will have an effect on the busi-

ness, but I don’t think it will be mas-sive,” Stephens at RSM summarises. “It will throw some opportunities our way, but did it achieve what we had hoped? No. I think everyone agrees on that.”

Regarding mandatory audit firm rota-tion, interviewed leaders are in agreement that the jury is still out on what the impact for the market will be.

However, they all agree that while the reform was passed by the European Parlia-ment, the real game changer will be how each member state transposes it into their national laws.

Indeed, member states have 83 options to choose from across the directive and the regulation.

For example, the EU regulation estab-lishes that the maximum period a firm can audit a company is 10 years. However, it also offers member states two options whereby they could extend the audit engage-ment for another 10 years by tendering the contract, or another 14 years if a joint audit firm is appointed.

It’s very unlikely that all member states will implement the reform consistently, as Auren president Antonio Gomez explains: “The reason why the EU reform came out with so many options is because European countries are not in agreement about stand-

ardising these issues.”Therefore it’s very likely that the adop-

tions at national level will create a patch-work of different laws across the EU by 17 June 2016, the date at which the new law needs to be implemented.

And firm leaders are concerned about the complexity this would bring to their businesses, as EY’s Weinberger explains: “These options could add significant costs and complexity over time for us and our clients.”

However Nusbaum at Grant Thornton International says it won’t be an insur-mountable issue: “We embrace change, whatever the rules are and whether we like them or not we can deal with them,” he

IAB 545v2.indd 11 27/01/2015 17:54:59


FEATURE International Accounting BulletinWORLD

says, before highlighting the fact that even if Europe’s reform stole most of the headlines in the last year, the most significant regula-tory change happened in India.

India has embarked on a five-year revamp of its regulatory framework. In 2013 it introduced a new Companies Act, and by 2018 it is expected to introduce a series of new regulations, including a new income tax code and a new indirect tax system.

“The new Indian Companies Act goes further than the EU’s reform, not only introducing audit rotation and limitation on advisory services to audit clients,” Nus-baum says.

“But it changes all the corporate govern-ance requirements. And whereas the EU laws only apply to listed companies, the Indian Companies Act applies to any com-pany larger than a certain size, but this size is relatively small.”

When it comes to regulation, interviewed firm leaders expect changes to intensify as there is a greater connectivity between regulators globally.

“Regulators are learning from each other, and in one country they’re looking at what another country is doing then getting onto that; we’re seeing a heavier approach than what we’ve seen previously,” RSM’s Ste-

phens explains. With a lot of regulators around the world

saying they are following the EU audit reform implementation very closely, it can only be assumed that audit rotation – and limitations on non-audit services to audit clients – is a reality that’s here to stay.

Fee pressure has continued into yet anoth-er year with little hope of easing. However,

firm leaders appear more adjusted to the challenges brought about by fee pressure, and more accepting of the idea that fee pres-sure is here to stay.

KPMG’s Veihmeyer warns that the

increased tendering brought about by regu-latory change is putting increased pressure on fees.

His concerns were echoed by some of the UK Big Four leaders in the IAB December 2014 UK Survey, as FTSE 350 companies rush to beat regulatory requirements.

“In general I think fees are stabilis-ing after the pressure that we saw after

Regional performanceWestern Europe In■a■year■characterised■by■considerable■geo-graphical■variations■in■economic■performance,■one■area■which■has■performed■below■expecta-tions■is■Western■Europe.

Mazars■chief■executive■Philippe■Castagnac■says:■“The■only■[area]■where■we■didn’t■have■dou-ble-digit■f igures■was■Western■Europe,■where■unfortunately■the■economy■has■really■slowed.■

“This■ isn’t■ true■ for■ Eastern■ and■ Central■Europe,■where■development■was■still■over■10%,■but■of■course■in■Western■Europe,■which■still■makes■up■two-thirds■of■Mazars’■global■business,■the■slow■economy■has■an■impact■on■develop-ment.”

Deloitte’s■global■chief■■executive■Barry■Salz-berg■retains■a■more■positive■outlook,■but■con-firms■the■significant■variations■between■coun-tries■within■the■area:■“There■are■some■other■places■that■are■growing■very■nicely■for■us■even■in■continental■Europe■like■France,■and■Germany,■and■Italy;■these■are■very■strong■growth■markets■for■us■in■the■last■year.”

Average■growth■for■firms■in■France■in■2014■was■4%,■compared■to■1%■in■2013;■in■Germany■and■ Italy■ f irms■ saw■ an■average■ increase■ of■

5%■and■4.6%,■respectively,■according■to■IAB■■country■survey■data■in■2014.

North AmericaA■more■uniformly■positive■picture,■conversely,■is■evident■in■North■America.■Last■year■saw■the■US■economy■grow■by■2.9%,■further■consolidat-ing■the■slow■but■steady■trend■towards■recovery■seen■in■the■past■months.■

November■2014■marked■the■10th■consecutive■month■of■net■job■gains,■confirming■hopes■aired■at■the■beginning■of■the■year,■following■the■posi-tive■growth■of■2013.

IAB’s■February■2014■survey■showed■the■vast■majority■of■respondents■had■seen■their■fee■incomes■rise■over■the■year.■Despite■continued■caution■among■investors,■the■Big■Four■grew■by■an■average■of■8%,■reaching■$40bn■in■combined■revenue.

This■ burgeoning■ return■ to■ conf idence■ is■reflected■by■many■of■the■industry’s■leaders,■who■say■North■America■remains■a■solidly■perform-ing■area,■not■as■exciting■as■some■of■the■world’s■developing■markets,■but■still■central■to■global■strategy■for■2015.

Asia-Pacific and ChinaHaving■established■itself■long■ago■as■the■next■frontier■for■ international■business,■China’s■growth,■though■slowed,■allows■it■to■retain■its■spot■as■a■key■market■for■most■global■players.■Its■fate■is■often■tied■into■the■wider■South-East■Asian■area,■where■many■networks■and■associa-tions■continued■to■expand■throughout■2014.

Mazars’s■Castagnac■confirms■that■the■area■remained■a■key■driver■for■growth■in■2014,■and■says■it■is■likely■to■see■further■deals■in■the■com-ing■months.■“Not■only■in■China■but■the■whole■of■Southeast■Asia,■we■are■very■close■to■some■significant■audit■developments,”■he■hints,■add-ing■that■negotiations■are■ongoing■over■several■deals.

His■confidence■appears■founded■–■IAB’s■most■recent■Greater■China■survey■revealed■an■aver-age■growth■rate■of■16%■among■networks■and■associations■in■2014.

The■Big■Four■have,■however,■encountered■challenges■in■recent■years■due■to■the■ongo-ing■legal■battle■with■the■US■Securities■and■Exchange■Commission■over■its■ruling■to■ban■them■from■servicing■US-listed■Chinese■compa-nies■since■January■2014.

“Regulators are learning from each other, and in one country they’re looking at what another country is doing then getting onto that; we’re seeing a heavier approach than what we’ve seen previously.”Jean■Stephens,■RSM■International

IAB 545v2.indd 12 27/01/2015 17:54:59


FEATUREInternational Accounting Bulletin WORLD

2008 and it’s a healthier environment for audit fees,” Veihmeyer says.

“I do think we will continue to see pres-sure in the profession to try and get that fair fee that is going to allow us to do the quality audit we expect to perform, but continue to invest in new technology to do what we do as efficiently as we can.”

HLB’s Tautges says fee pressure has always been there – and always will be – especially as clients worldwide become “pretty sophisticated in their purchasing”.

He says: “I think clients that simply go for the low fee find out very quickly that calls aren’t returned necessarily as fast as they’d like them to be.

Maybe they don’t get the attention that they really need, and so on.

“Those extra meetings, that extra time with your trusted advisor; if you’ve squeezed them down so far on fees, something has to break at some point as far as the quality of the service goes. And that is not good for the client.”

Despite some concerned firm leaders from

around the world pointing at the heavy dis-counting by the Big Four in certain markets, Tautges says: “Have the Big Four discounted to get into a market? Of course. Have the mid-tier? Of course.

“Sometimes it’s a business strategy to take short-term losses to gain some volume in a particular service area or industry. But as far as who to blame, the profession just needs to get in front of a mirror and say ‘it’s all about us’. If you aggressively discount, then you diminish your chances for long-term suc-cess, and it drives down the quality.”

Crowe Horwath International’s McGrath agrees, and says:

“I think we’re all guilty of the same thing, which is that we often ourselves, don’t enforce the value proposition that we’re pro-viding in the market, and we’re too easy in relinquishing fees at the will of the market.

“I think again there are far too many com-panies today which are still looking for the most efficient audit they can get at the low-est price.

“There are clearly things that we still need

to be doing to provide a much more efficient audit, and I’m sure all the networks, just like us are working on trying to do that. How-ever, there are only so many efficiencies that you can gain in the process.

“I think the real issue is the value propo-sition of the audit itself; why is the market unwilling to pay more? I think that is a criti-cal question that we need to ask ourselves. And I don’t know that we’ve really answered that yet as a profession.”

Global tax rules In the tax arena, last year saw the first dead-line for action from the G20-sponsored Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) action plan.

The rise of BEPS is emblematic of the changing landscape and challenges facing professional global services providers in the tax arena.

The complex international tax landscape has largely contributed to a good tax perfor-mance in 2014 according to McGrath.

At■the■same■time,■competitors■are■mounting■an■increasingly■convincing■challenge■to■the■Big■Four■in■the■region.■In■Mainland■China,■IAB’s■2014■China■survey■saw■KPMG■overtaken■by■BDO■LiXin■and■drop■to■sixth■place,■according■to■Chi-nese■Institute■of■Certified■Public■Accountants.

Going■ into■ 2015,■ BDO’s■ posit ion■ in■ the■market■looks■set■to■strengthen■further.■As■of■■1■January,■BDO■China■and■BDO■International■have■invested■in■a■shareholding■in■BDO■Hong■Kong,■combining■the■business■and■advisory■services■in■the■two■markets■and■taking■them■one■step■closer■to■full■integration.

Africa and Latin America As■China’s■growth■continues■to■level■out■and■Latin■America■continues■to■present■a■mixed■picture,■perhaps■for■the■first■time■the■sights■of■the■industry■are■trained■on■Africa.■

This■year,■complementing■a■7%■rate■of■GDP■growth,■Nigeria■came■out■on■top■as■the■country■where■firms■grew■the■most■on■average■in■2014,■at■19%,■based■on■the■IAB■inaugural■Nigeria■survey.■

Elsewhere■across■Africa,■a■year■of■strong■eco-nomic■performance■was■somewhat■blighted■by■

unfavourable■exchange■rates,■particularly■in■South■Africa,■where■miners■strikes■and■the■col-lapse■of■the■African■Bank■wreaked■havoc■on■the■rand.■Despite■these■issues,■South■Africa■also■managed■to■remain■a■competitive■market,■with■firms■growing■8.4%■on■average■in■2014,■up■from■the■6%■increase■in■2013.

Indeed,■ongoing■challenges■show■little■sign■of■dampening■investment■towards■the■region,■described■by■EY■global■chairman■and■chief■executive■Mark■Weinberger■as■“an■important■and■exciting■market■with■great■promise”.

“It■seems■like■the■eyes■of■the■world■are■on■Africa,”■confirms■HLB■International■chief■exec-utive■Rob■Tautges,■adding■that■HLB■has■made■some■gains■in■the■region.

These■include■the■addition■of■firms■in■Kenya,■Egypt,■Rwanda,■and■Uganda,■but■did■little■to■soften■the■3%■contraction■witnessed■by■the■network■across■Africa■and■the■Middle■East.

Despite■the■loss,■Tautges■is■confident■in■the■African■market’s■potential.

“It’s■an■emerging■market,■lots■of■natural■resources;■we■see■that■China■is■doing■a■lot■of■investment■there,”■he■explains.

“I■think■it’s■going■to■be■a■real■hotbed■for■

cross-border■investment,■and■so■we’re■excited■to■keep■ramping■up■the■quality■of■our■firms■and■the■geographies■and■countries■covered.”

In■contrast■to■Africa’s■soaring■popularity,■the■outlook■on■Latin■America■remains■rather■more■mixed.

“I■think■there■is■great■opportunity■in■many■of■those■areas■as■they■are■maturing■themselves■as■markets,”■Deloitte’s■Salzberg■says.

“Places■ in■ Latin■ America■ like■ Colombia,■Panama■and■Brazil■are■demonstrating■growth■broadly■over■a■period■of■time.”

His■mention■of■Brazil■as■a■market■attracting■particular■attention■from■the■global■industry■is■echoed■by■many■of■this■year’s■participants,■and■for■good■reason■–■the■average■growth■for■firms■in■the■country■during■2014■was■13%,■second■only■to■China■and■Nigeria.

“In■terms■of■Latin■America,■it■is■Brazil■that■jumps■forward,”■according■to■Morison■Interna-tional■chief■executive■Liza■Robbins.

Her■observations■are■confirmed■by■Tautges,■who■predicts■■that■Brazil’s■success■story■is■set■to■continue■well■beyond■2014,■as■“very■attrac-tive■for■inbound■investment■for■the■next■10■years”.<

IAB 545v2.indd 13 27/01/2015 17:54:59



■ NORTH AMERICA

NameRev

($m)Staff

MID-TIER NETWORKS

5 BDO 2,850.6 17,495

6 RSM■International 2,592.4 13,601

7 Grant■Thornton■International 1,910.6 11,069

8 Crowe■Horwath■International 1,615.7 8,538

9 PKF■International 1,604.5 10,732

10 Baker■Tilly■International 1,509.3 7,792

11 Nexia■International 1,468.5 7,896

12 Moore■Stephens■International 1,079.4 5,104

13 Kreston■International 849.7 3,840

14 HLB■International 541.4 3,308

15 UHY■International 215.5 1,059

16 Ecovis■International 186.4 691

17 Mazars 170.0 783

18 Russell■Bedford■International 84.0 540

19 IECnet/EPR 40.5 420

20 Santa■Fe■Associates 31.0 188

2014 regional breakdown

ASSOCIATIONS

1 Praxity 2,393.0 12,725

2 LEA■Global 2,004.5 10,748

3 PrimeGlobal 1,051.3 5,977

4 AGN■International 719.0 4,563

5 DFK■International 628.9 3,149

6GGI■(Geneva■Group■International)

625.4 –

7 BKR■International 508.0 3,306

8 IAPA 293.6 1,565

9 CPA■Associates■International 283.0 1,780

10 Alliott■Group 176.9 1,002

11 MSI■Global■Alliance 173.8 1,127

12 JHI■Association 153.0 862

13 MGI 131.8 950

14 Morison■International■ 128.9 722

15 Integra■International 111.0 787

16 INPACT 88.8 566

17 KS■International 75.2 453

18 GMN■International 23.6 189

19 Abacus■Worldwide 19.0 144

20 ANTEA 7.5 53


■ LATIN AMERICA

NameRev

($m)Staff

MID-TIER NETWORKS

5 BDO 208.7 4,256

6 Grant■Thornton■International 185.7 3,958

7 Baker■Tilly■International 112.6 2,053

8 RSM■International 110.0 2,610

9 Crowe■Horwath■International 95.2 2,602

10 Santa■Fe■Associates 87.6 1,397

11 Moore■Stephens■International 75.2 2,704

12 SMS■Latinoamérica 69.6 1,928


14 Nexia■International 54.6 1,548

15 PKF■International 52.8 1,451

16 Mazars 50.2 1,167

17 Russell■Bedford■International 49.0 1,526

18 UC&CS■America 47.7 1,579


20 UHY■International 27.6 939

ASSOCIATIONS

1 LEA■Global 80.0 1,750

2 Praxity 70.0 1,696


53.7 –

4 UC&CS■Global 47.7 1,579




8 PrimeGlobal 38.8 1,116

9 ANTEA 35.2 1,047


11 MGI 22.5 946

12 Morison■International■ 21.6 666

13 BKR■International 20.0 660

14 Parker■Randall■International 16.1 262

15 Alliott■Group 14.7 194

16 MSI■Global■Alliance 13.9 483

17 AGN■International 10.8 403



20 IAPA 9.1 371


■ REVENUE AND STAFF SPLIT BY REGION TOP 10 MID-TIER NETWORKS


Latin America

North America

45%

29%

9%

Outer ring: StaffInner ring: Fee

Clockwise:

3%

Europe

36%

7%

Asia-Pacific

3%

Middle Eastand Africa

13%

31%

24%

EMEA

Americas

33%37%

Outer ring: StaffInner ring: Fee

Clockwise:

Asia-Pacific

47%

16%

20%

47%

■ REVENUE AND STAFF SPLIT BY REGION BIG FOUR


IAB 545v2.indd 14 27/01/2015 17:55:02



■ EUROPE

NameRev

($m)Staff

MID-TIER NETWORKS

5 BDO 2,702.1 19,332

6 Grant■Thornton■International 1,898.3 13,012

7 Nexia■International 1,240.1 8,024

8 Baker■Tilly■International 1,097.3 7,821

9 Mazars 1,068.0 7,814

10 RSM■International 1,034.8 8,205






16 Ecovis■International 317.4 2,851


18 Russell■Bedford■International 196.0 1,711

19 TGS■Global 132.5 1,448

20 Auren 93.6 916

■ THE BIG FOURNorth America Latin America Europe Asia-Pacific Africa/Middle East

Rev ($m) Staff Rev ($m) Staff Rev ($m) Staff Rev ($m) Staff Rev ($m) Staff

Deloitte* 16,000 73,420 1,300 19,383 11,200 64,707 4,800 42,819 900 10,071

PwC*■(1) 12,704 49,375 1,026 13,428 13,598 69,807 5,454 50,337 1,170 12,486

The Americas Europe/Africa/Middle East Asia-Pacific

Rev ($m) Staff Rev ($m) Staff Rev ($m) Staff

EY*■(2) 11,600 58,411 11,800 90,564 4,000 39,317.0

KPMG* 8,510 45,181 12,450 83,983 3,860 32,867

(1)■PwC■reported■revenues■for■the■Caribbean■in■North■America;■(2)■EY■reported■data■for■India■in■EMA,■and■EY■Japan■$1,098m■fee■income■and■7,266■staff■are■not■included■in■the■regional■split.■■Source:■International Accounting Bulletin

ASSOCIATIONS


144.0 -

2 Praxity 131.2 3,251

3 Morison■International■ 76.1 1,658

4 LEA■Global 48.5 1,240


6 MSI■Global■Alliance 21.1 487

7 BKR■International 20.0 691


9 IAPA 14.9 493

10 AGN■International 14.6 651

11 DFK■International 13.5 507

12 MGI 13.1 517



15 INPACT 9.3 382


17 CPA■Associates■International 9.0 294



20 EuraAudit 3.5 207


■ AFRICA/MIDDLE EAST

NameRev

($m)Staff

MID-TIER NETWORKS

5 BDO 210.5 3,689

6 Grant■Thornton■International 146.4 2,891

7 Mazars 94.2 2,387



10 RSM■International 65.8 1,553






16 UHY■International 29.9 680

17 Santa■Fe■Associates 20.0 730

18 Russell■Bedford■International 16.0 307

19 Ecovis■International 10.0 179

20 IECnet/EPR 6.2 160

■ ASIA-PACIFIC

Name Rev ($m) Staff

MID-TIER NETWORKS

5 BDO 1,049.9 14,656

6 Crowe■Horwath■Intr.* 753.6 10,777


8 RSM■International* 588.1 11,474

9 Grant■Thornton■Intr. 587.7 9,267

10 Moore■Stephens■Intr. 482.7 8,923



13 ShineWing 263.8 4,555


15 PKF■International 145.1■ 2,171

16 Reanda■International 134.7 2,344


18 Mazars 76.9 1,937

19 Russell■Bedford■Intr. 45.0 1,269

20 Ecovis■International 44.6 805*Crowe■Horwath■China■and■RSM■China■have■merger■Ruihua■CPA■and■both■networks■have■reported■their■respective■share■of■the■new■firm■

ASSOCIATIONS

1 Praxity 1,405.3 10,576


1,083.1 -


4 IAPA 770.5 6,725


6 LEA■Global 583.4 4,205





11 MGI 310.0 2,947


13 ANTEA 188.1 1,905

14 Alliott■Group 180.4 1,207

15 EuraAudit 174.8 2,486

16 KS■International 166.7 1,417

17 INPACT 130.5 1,130

18 Integra■International 112.7 1,080




ASSOCIATIONS

1 Praxity 364.6 7,237

2 LEA■Global 293.3 5,494

3GGI■(Geneva■Group■■International)

242.8 -








11 KS■International 65.9 1,549

12 IAPA 64.9 1,046

13 Integra■International 62.2 1,219

14 MGI 58.6 1,333


16 INPACT 41.6 1,528



19 ANTEA 15.0 453



IAB 545v2.indd 15 27/01/2015 17:55:04



He says: “With the increased attention being placed on providing the transparency of information tax-wise and the like, there is far greater risk today for a multinational company on a host of tax matters.”

This complexity-driven popularity of tax services is particularly evident in compari-son with other service lines, he adds. “Con-trasting with audit, it’s clearly one in which the market is valuing the service, because there’s not the price compression that there

is today for audit.”Indeed, “the single area of greatest collab-

oration across the world among our mem-bers is related to international tax matters”, says Praxity’s Anderson.

Veihmeyer at KPMG says:“I think as companies expand globally one of their major needs is to assist with tax; we need

to help clients understand tax jurisdictions, and that is driving the healthy growth in tax,”.

Nonetheless, he says, challenges abound: “Companies are trying to operate globally. However, the tax environment globally is very jurisdictional, which does bring in work for us in helping clients understand these different and unique rules.”

For some, an awareness of these challeng-es translates into scepticism at the OECD

BEPS’s mission itself. At HLB Tautges says: “If you want to

change regulations, the structures are already there to do it.

“I think it’s up to jurisdictions to review their own tax regulations, and if somehow there are areas of abuse, simply close up those loopholes.

“I think the challenge is that when firms follow the regulations, it’s unfair to criti-cise them for minimising their client’s tax when it’s done within the existing laws,” he explains.

AdvisoryThe last 12 months have seen advisory ser-vices continue to make inroads into the ter-ritory of audit and accounting. Advisory now accounts for 30% of overall earned revenues among the top 10 networks sur-veyed by the IAB, and 35% of all fees earned by the Big Four.

The Big Four in particular stepped up the advisory race of the previous few years, closing high-profile transactions with a range of consulting businesses.

Among the top four, Deloitte was the only one not to move away from consult-ing in the early 2000s in light of the Enron scandal and Arthur Anderson collapse.

Deloitte’s Salzberg says this decision to stay in consulting has paid off, with its con-sulting practice witnessing robust growth over the past eight years.

“Since our competitors separated their consulting business in 2002-2003 and we didn’t, we’ve been the market leader in con-sulting, particularly among the Big Four, and broadly we’re able to build up our capa-bilities against many of our competitors,” he explains.

It has not taken long for KPMG, PwC and EY to rebuild their advisory offering and now, a few years into the process, they are catching up, and many large deals have been completed in the past 18 months.

In April, PwC completed its acquisition of Booz & Company, following a merger proposal in late 2013, while EY finalised its merger with consultancy The Parthenon Group in September 2014.

The trend has not remained confined to the upper echelons, as the opportunities offered by advisory become increasingly evident beyond the Big Four.

In particular, from risk consulting, to transaction services and technology and IT, mid-tier players are increasingly focusing on building up their sector expertise in a bid to attract clients.

“I think select advisory services are desperately needed by the companies and scarce in terms of firms who can provide them adequately,” Crowe Horwath Inter-national’s McGrath says.

“With the increased attention being placed on providing the transparency of information tax-wise and the like, there is far greater risk today for a multinational company on a host of tax matters.”Kevin■McGrath,■Crowe■Horwath■International


Average growth of firms by country

2013 (%) 2014 (%) 2014 GDP growth (%)

Australia -2 5 3.3

Brazil 19 13 4.0

Canada 4 1.4 2.3

China 37 18 8.2

France 1 4 0.8

Germany 5 5 1.4

Italy 6 4.6 0.5

Japan 2 4 1.4

Mexico 6 7.4 3.4

Netherlands -3 -0.7 1.0

Nigeria - 19 7.0

Russia 18 5.8 3.7

South■Africa 6 8.4 3.3

South■Korea 0 0.6 3.8

Spain 0 4 0.7

Turkey 17 12 3.7

UK 5 4.9 1.5

US 11 7 2.9

World 5 6 3.8

Notes:■Growth■rates■are■taken■from■International Accounting Bulletin■country■surveys■in■calandar■year■2014.■GDP,■constant■prices■percent■change■taken■from■IMF.

IAB 545v2.indd 16 27/01/2015 17:55:04



Russia out in the cold

As■the■Ukraine■crisis■which■started■in■November2013■continues■into■the■New■Year,■the■geopolitical■standoff■between■Russia■and■the■Western■powers■shows■no■sign■of■resolution.■According■to■HLB■International■white■paper,■trade■with■EU■countries■makes■up■about■a■half■of■Russia’s■trade■turnover.■Over■60%■of■Russia’s■foreign■investments■(approx.■$100bn)■is■directed■towards■EU■countries.■■And■European■companies■with■investments■of■around■$300bn■are■the■leading■investors■in■the■Russian■economy.■US■and■European■sanctions■have■crippled■Russia’s■economy.■At■the■same■time,■rumours■of■a■Kremlin■crackdown■on■foreign■auditors■have■spooked■many■global■players■in■the■country.With■such■a■backdrop,■accounting■firms■have■found■themselves■some-what■caught■in■the■crossfire.■Although■many■participants■say■they■value■their■presence■in■the■Russian■market,■they■are■increasingly■cautious■about■conducting■business■there.RSM■International’s■chief■executive■Jean■Stephens■says■that■while■the■network’s■Russian■firm■is■still■growing■thanks■to■a■strong■national■client■base,■she■believes■few■international■players■are■considering■the■Russian■market■at■the■moment.■“When■you■don’t■have■a■stable■political■environ-ment,■that’s■when■the■international■business■just■stops,■because■they■don’t■have■confidence,”■she■explains.■

However■Baker■Tilly■International■chief■executive■officer■Geoff■Barnes■reveals■that■while■Russia■is■facing■some■challenges,■his■network■is■look-ing■to■increase■its■presence■in■the■market.Baker■Tilly’s■Russian■firm■is■strong,■he■says.■“But■we■need■a■wider■cov-erage■there,■and■there■are■very■few■examples,■if■any,■of■mergers■in■the■middle■market,■so■Russia■would■be■one■we■have■to■keep■an■eye■on.”A■point■of■optimism■for■Russian■accounting■firms■is■the■creation■of■the■Eurasian■Economic■Union■(EEU),■born■out■of■treaty■between■Russia,■Belarus,■and■Kazakhstan■signed■in■May■2014,■and■which■came■into■force■on■1■January■2015.■The■economic■union■builds■on■the■Eurasian■Economic■Community■created■in■2000,■and■aim■at■further■economic■integration■in■the■region.■Armenia■joined■the■Union■on■2■January■2015■and■Kyrgyzstan■will■officially■join■in■May■of■this■year.■With■other■states■in■the■region■considering■joining■the■EEU,■Turkey■rumoured■to■be■one■of■them,■Russian■accounting■firm■see■the■creation■of■a■large■market■on■the■outskirt■of■the■EU■as■a■fresh■source■of■oppor-tunities.■As■of■January■2015,■EEU■represents■a■population■of■170.7m■and■a■GDP■of■$2.6tr■according■to■the■IMF.■In■confidence■with■the IAB■a■few■firm■lead-ers■admit■having■opened■an■office■in■EEU■countries■in■order■to■be■better■prepared■to■seize■the■opportunities■of■this■young■integrated■market.<

“That’s where we are trying to focus; what those areas are and how can we equip ourselves better to be able to provide them.”

Stephens also describes advisory within RSM as “a key opportunity”, with IT an area of particular interest.

The trend towards potentiated advisory and consulting services is also being increas-ingly matched by moves towards greater

legal capabilities.This shift is particularly evident in the

UK. In December, EY UK joined PwC and KPMG in securing an alternative business structure licence, allowing it to provide legal services in England and Wales.

The same trend has been observed in Asia-Pacific. In October last year, EY added a law firm in Singapore, building on a previous legal addition in Shang-hai and the opening of a legal practice in Vietnam, part of the firm’s strategy of legal service building across Australia and New Zealand.

Succession planing In recent years, succession planning has become more and more of a challenge for the accountancy profession.

“Succession is a real issue that needs very careful attention by existing management,” Barnes at Baker Tilly International explains. “If it is dealt with incorrectly, it is the end of the business. If it is dealt with successfully, there is a continuance of prosperity.”

At networks and associations level, the risk is to see members leave as partners retire – and have no other options than to sell their practice to get their equities back. Sim of PKF International says a lot of the network’s losses in the past two years were due to a lack of succession planning.

As a result, in 2013 the network made suc-cession planning a membership requirement for firms.

Other leaders from organisations such as Nexia and Baker Tilly International say they had been confronted with the same issue in the past, but generally with smaller member firms.

If some, like HLB’s Tautges, believe that this issue has always been there and always will be, others are more wary that it might intensify in coming years with the genera-tion known as the ‘baby boomers’ now in their 50s and 60s, posing serious challenges in terms of succession as a large chunk of the workforce is getting closer to retirement.

To look at how this would impact the accountancy profession, the Global Accounting Alliance (GAA) commissioned an online survey conducted by Harris Deci-ma of Canada, a Nielsen Company, among firms belonging to GAA’s 11-member bod-ies, and the Succession Institute provided the analysis of the results.

Of the 1,819 multi-owner accounting firms which responded to the survey, only 31% have a formal or written succession plan in place.

This statistic is even lower among sole practitioners, with only 3% of the 1,273 survey respondents falling into this category having a written or formal succession plan

0

20

40

60

80

100

Sole

proprietors

(1,273)

Multi-owner

firms (

1,819)

%Yes

No

Don’t know

3%

97%

31%

65%

3%

■ DO YOU HAVE A WRITTEN OR FORMAL BUSINESS SUCCESSION PLAN?

Source:■GGA■2014■sucession■survey■report■

IAB 545v2.indd 17 27/01/2015 17:55:05



at their firm. Networks and associations have taken

active steps to help their member step up to the challenge. At Crowe Horwath Inter-national McGrath reveals the network is currently putting together a programme to deal with succession planning as part of the network’s leadership training.

Nusbaum says Grant Thornton Interna-tional has very comprehensive programmes which include outside consulting firms to deal with the challenge of succession plan-ning. Arnold and Tautges say their respec-tive networks – Nexia and HLB – organise specific conferences for their members on

the topic. At Baker Tilly International, Barnes says:

“As part of our quality assurance review, we visit one-third of our members annually, and we are not just looking at audit files and audit systems but we’re discussing with them their business strategies and philoso-phies, including succession planning.”

Arnold says that one of the difficulties firms have with succession planning is the issue of trust. “There is an assumption that the younger people are unable to do it,” he

explains.“But they can, if you have quality people

and you trust them and give them the oppor-tunity to develop then there shouldn’t be an issue.”

Future leadersHowever, in some markets finding the next generation of leaders can prove to be a chal-lenge. And what is commonly referred to as the ‘war for talent’ is as much a reality and a challenge for accounting organisations as succession planning is.

“Does auditing and accounting draw the best and the brightest?” Stephens asks.

“No, and that’s worrying for me because where are the leaders going to come from?”

The difficulty does not only reside in attracting talent, but also in retaining it. As the younger generations become more demanding when it comes to balancing their work and private lives, they increasingly tend to see more rewards in industry then in public practice. Asked about the attrac-tiveness of the profession against possible careers in industry and or in public finance management, Barnes says: “I don’t see it as

a threat: I think it is up to the firms to deliv-er a value proposition to young people, but also be prepared to accommodate second-ments to institutions, or to government bod-ies. And not to be alarmed, but to factor-in that people leave.”

Recruitment challenges vary depending on the different markets.

Interviewed firm leaders point to Germa-ny as the most challenging market in which to attract and retain talent.

Most agree that revived economies in the US and the UK have eased the challenge in those countries, while in Asia Survey respondents say the main issue is retention.

A lot of it is down to the economic situa-tion; as Gomez at Auren explains, in coun-tries such as Spain where unemployment is 24% it’s easy to find and recruit talent.

Because of these geographical disparities, Van Roekel at BDO says it’s important to have the right employment value proposi-tion, not only at global level but “especially at local level in order to ensure that you will be able to build a sustainable future for your member firms.

“But this challenge won’t become less in the coming years,” he concludes.

2015 outlookAs the industry enters a new year, it finds itself yet again facing a changing landscape. The widespread economic woes characteris-ing the years following the crisis are slowly giving way to a much less uniform picture, where areas of high growth contrast against enduringly sluggish performances in areas such as Western Europe.

As such, issues such as dwindling demand and stagnant performance are gradually being replaced by concerns ranging from recruitment and succession planning, to competition and the impact of large-scale geopolitical events.

Indeed, geopolitical and societal risks dominate the World Economic Forum’s Global Risks 2015 report.

Inter-state conflict with regional conse-quences is viewed as the number one global risk in terms of likelihood, while failure of national governance and state collapse or crisis both rank among the top five.

“Staying on top of geopolitical changes will be important,” EY’s Weinberger com-ments. “A trend that could have a far-reaching impact is the rise of nationalism in many countries. Global economic conditions

■ REVENUE VS GROWTH


0

50

100

150

200 $bn

-10

-5

0

5

10

15

20

20032004

20052006

20072008

20092010

20112012

20132014

Revenue (left axis)

Growth

%

“ I think it is up to the firms to deliver a value proposition to young people, but also be prepared to accommodate secondments to institutions, to government bodies, not to be alarmed, but to factor in that people leave.”Geoff■Barnes,■Baker■Tilly■International

IAB 545v2.indd 18 27/01/2015 17:55:06



have provided the opportunity for nation-alistic political parties, which advocate protectionist policies, to blame trade and foreign workers for continued slow econom-ic recovery.”

Ultimately, he continues, the rise of nationalism could have major effects on trade, investment, tax policy, and on merg-ers and acquisitions.

This echoes the analysis of Mazars chief executive Philippe Castagnac’s, which argues that the biggest challenge in 2015 will be to restore economic growth through trust.

“If the economy is stressed, as it is, it is difficult for entrepreneurs, it is difficult for companies and, of course, it is a difficulty for us,” he says.

“So the important thing is to restore eco-nomic growth globally and restart invest-ments and this will come from trust – and

of course we see in Europe we have some difficulties in enhancing trust; that is the biggest problem that we could have in the coming years.”

For Grant Thornton International’s Nus-baum the economic recovery also tops the list of challenges for the coming years, but he also points to three other challenges which, for him, will impact accounting firms in the future.

One is technology, which he says has had a huge impact on the accountancy profes-sion in the past 20 years, but he sees the fast-evolving pace of this sector as having an even greater impact in the coming years.

Secondly, he says: “Accounting firms will look at a wider variety of advisory services they can offer and we see some firms offer-ing legal services. We still need to see how this plays out going forward.” Finally, he says, the increased globalisation of the mar-

ketplace will continue to result in a greater global integration of the profession and its clients.

“Different players will emerge; there will continue to be a need for the loose associa-tion and smaller player, but there will be more and more demand for the larger net-works,” he concludes.

Despite the challenges, interviewed firm leaders remain optimistic for their busi-nesses.

Looking back at the IAB World Surveys from the previous three years the rising level of optimise in interviewees is striking. Nusbaum, for example, even predicts that organic growth will regain centre stage in 2015 and beyond.

In the balancing act of turning challenges into opportunities, while dealing with regu-latory changes around the world, firm lead-ers face another challanging year. <

Consolidation trend continues

As■in■previous■years,■the■merger■and■acquisition■market■continued■to■register■a■high■level■of■activity■in■2014.■For■example,■mid-tier■networks■such■as■BDO■and■Grant■Thornton■International■reported■over■20■M&As■in■the■12■months■to■their■year-end.■

For■the■Big■Four,■the■most■striking■deal■was■the■acquisition■by■PwC■of■Booz■&■Company,■rebranded■Strategy&.■The■acquisition■aimed■to■boost■the■network’s■advisory■practice■with■Booz■&■Company’s■3,000■staff■in■57■offices■around■the■world,■and■reported■revenues■of■$1.4bn■in■2012.■

At■mid-tier■level,■the■most■prominent■transaction■came■from■the■UK,■where■Baker■Tilly■International■lost■its■historical■member■firm■to■RSM■International.■This■came■a■year■after■Baker■Tilly■UK■acquired■RSM■Tenon■in■a■pre-pack■deal,■leaving■RSM■International■without■a■member■firm■in■the■UK.

This■triggered■a■snowball■effect■as■Baker■Tilly■UK■left■to■join■RSM■International,■leaving■Baker■Tilly■International■without■a■member■in■the■UK.■Subsequently,■Baker■Tilly■International■announced■that■it■had■added■Morison■International’s■UK■firm■MHA■MacIntyre■Hudson,■in■turn■leaving■the■association■without■a■member■in■the■UK.■

Consolidation■has■been■an■identified■trend■in■the■market■for■several■years,■and■the■economic■slowdown■due■to■the■financial■crisis■seems■to■have■accelerated■this■development,■but■all■firm■leaders■are■not■in■agree-ment■on■its■future■implications■for■the■market.■

For■quite■some■time,■BDO■has■been■advocating■a■drastic■change■in■the■accountancy■landscape,■as■chief■executive■Martin■van■Roekel■explains:■“We■expect■in■some■years■from■now■there■will■be■two■or■three■really■global■mid-tier■networks■that■will■be■leading■the■mid-tier■market.

“Based■on■what’s■happening,■we■see■that■our■expectation■is■the■cor-rect■one.”

However,■others■tend■to■believe■that■the■smaller■networks■and■asso-ciations■will■always■have■a■place■in■the■global■market.■At■PKF■Interna-tional,■chief■executive■John■Sim■says■that■while■he■agrees■there■may■be■

three■dominant■networks■at■the■mid-tier■level,■he■does■not■see■the■other■players■disappearing.■

“Once■you’ve■reached■$1bn■in■revenue,■you’ve■reached■critical■mass,”■he■says.■“Clients■don’t■ask■me■what■our■revenues■are■and■what■our■ranking■is;■they■want■to■see■the■resumes■of■the■people■we■put■in■their■engagement.”■

This■is■a■view■shared■by■HLB■International■chief■executive■Rob■Taut-ges,■who■says■that■even■though■there■is■a■significant■amount■of■merger■activity■involving■firms■that■are■positioning■themselves■just■behind■the■Big■Four,■it’s■not■a■threat■for■smaller■international■organisations.■“The■volume■of■high-quality■good-size■firms■is■sufficient■enough■to■fill■in■for■those■networks■that■may■have■lost■a■firm■through■this■type■of■merger.”

On■the■other■end■of■the■spectrum,■Nexia■executive■director■Kevin■Arnold■is■sceptical■about■these■views.■For■him■the■market■is■driven■by■the■clients’■needs,■and■when■some■argue■that■in■the■future■smaller■mid-tier■networks■will■only■have■a■regional■focus,■Arnold■replies:■“If■you■look■at■the■number■of■networks■and■associations,■in■many■ways■it■matches■the■number■of■clients■there■are.

“There■has■been■a■suggestion■that■maybe■we■would■have■a■European■network■–■well,■it■presupposes■that■clients■will■want■to■work■within■Europe■only.■Clients■will■drive■the■shape■of■networks■and■associations.”

Nevertheless■all■interviewed■firm■leader■agree■that■consolidation■poses■a■challenge■to■their■organisations,■as■Crowe■Horwath■Interna-tional■CEO■Kevin■McGrath■explains:■“I■think■mid-tier■networks■have■to■decide■what■their■real■strategy■is■and■the■real■risk■of■a■mid-tier■network■is■being■stuck■in■the■middle■where■you■don’t■know■whether■you■are■sup-posed■to■be■bigger■or■smaller.”

Another■challenge■from■consolidation■identified■by■interviewed■firm■leaders■is■the■need■to■develop■the■right■value■proposition■for■their■mem-bers.■“A■challenge■is■to■show■that■your■member■firms■feel■that■what■the■network■does■for■them■meets■their■requirements,”■Arnold■says.■<

IAB 545v2.indd 19 27/01/2015 17:55:06




FIRM MOVEMENTS

NETWORK/ASSOCIATION FIRM ADDITIONS, MERGERS & ACQUISITIONS

Abacus Worldwide Added:■Graham■&■Co■(Boulder,■US),■SSH■LLP■(London,■UK),■Novak■Francella■(Philadelphia,■US),■Alfratrix■(Lisbon,■Portugal),■Advicegroup■Leclercq■(Bornem,■Belgium),■Moreno■Rouby■(Paris,■France),■Sanmi■Adeayo■(Abuja,■Nigeria),■Acutus■(Singapore),■KAP■Teguh■Heru■&■Rekan■(Jakarta,■Indonesia)

Lost:■DBT,■PC■(Beaverton,■Oregon,■US),■KAP■Gatot■Permadi■(Jakarta,■Indonesia)

AGN International Added:■Stolze■Diers■Beermann■(Emsdetten,■Germany)■DK■Accountants■&■Adviseurs■(Veenendaal,■The■Netherlands),■Keepers■Advisory■Services■(Kuwait),■Jeri■Ramon■&■Asociados■(Peru),■Hoffman■Stewart■Schmidt■(Portland,■US),■Rengi■Trevor■(São■Paulo,■Brazil),■Hamad■Al■Aufi■(Riyadh,■Saudi■Arabia),■Granauditorias■(Medellin,■Colombia),■GMJ■&■Co.■(Mumbai,■India)

Lost:■Arora■&■Bansal■(New■Delhi,■India),■Romani■Consulting■(Manama,■Bahrain),■Consultatio■(Budapest,■Hungary),■Edgar■Garay■&■Associados■(Lima,■Peru),■Luis■Reategui■(Lima,■Peru)

ANTEA Added:■KPI■(La■Paz,■Bolivia),■ACA■El■Kadeem■(Cayro,■Egypt),■JAXA■Chartered■Accountants■(Dubai),■Stanford■Associates■(Singapore),■Westcourt■(East■Perth,■Australia),■Gyimesi■&■Partners■(Budapest,■Hungary),■Uniexpert■(Tanger,■Morocco),■Barrios■&■Associados■(Maracaibo,■Venezuela),■EFI■(Quito,■Ecuador)■Lost: Hans■&■Associés■(France),■FACT■(Germany)

Auren M&A:■TH&R■(Bogota,■Colombia),■IAS■(Barranquilla,■Colombia),■Van■Zwoll■Wijntjes■(Ámsterdam,■Netherlands),■Van■Zwoll■Wijntjes■(Amersfoort,■Netherlands)

Baker Tilly International M&A:■Baker■Tilly■Staples■Rodway■(New■Zealand)■acquired■PKF■Martin■Jarvie■(Wellington);■Baker■Tilly■Singhi■(India)■merged■with■Corporate■Finance■Advisors,■(Mumbai,■Maharashtra);■ParenteBeard■aquired■Presscott■Associates■(Avon,■Connecticut■US);■BlumShapiro■acquired■Sullivan■&■Company■(Providence,■Rhode■Island,■US);■Baker■Tilly■(US)■acquired■Holtz■Rubenstein■Reminick■(New■York,■US);■Baker■Tilly■(US)■and■ParenteBeard■(US)■merged■(Philadelphia,■US);■Habif■Arogeti■&■Wynne■acquired■JRZ■LLC■(Atlanta,■USA)■;■Baker■Tilly■Revisa■(Italy)■acquired■Bompani■Audit■(Rome■and■Florence)■and■Iter■Audit■(Brescia■and■Rome);■Baker■Tilly■Japan■acquired■Daido■Audit■Corporation■(Osaka,■Japan);■Baker■Tilly■Espana■(Spain)■acquired■Villalba,■Envid■y■CIA■Auditores■(Zaragoza)■and■Auditabe■Auditores■Consultores■(Logroño);■Baker■Tilly■Gomez■(Bahamas)■acquired■RTA■(Nassau)

Added:■MHA■Macintyre■Hudson■(UK),■Baker■Tilly■Nicaragua■(Nicaragua),■Nihombashi■Corporation■(Japan)

Lost:■Hansen■Barnett■&■Maxwell■(US),■Baker■Tilly■UK■(UK),■Kasumigaseki■Audit■Corporation■(Japan),■Baker■Tilly■Finland■(Finland),■Dr■Clauss,■Dr■Paal■und■Partner■(Germany),■Baker■Tilly■Ian■Dent■(North■Sudan),■Baker■Tilly■Ian■Dent■(South■Sudan),■Baker■Tilly■Tunisie■(Tunisia),■Intercontinental■Trust■(Seychelles),■Cohen■&■Co■(US)

BDO M&A:■KPMG■Sunshine■Coast■was■acquired■by■BDO■Australia■(Maroochydore,■Australia);■the■remunerations■services■division■of■Reditus■Group■Pty■Ltd■was■acquired■by■BDO■Australia■(Brisbane,■Australia);■McCuaig■&■Company■(Halifax,■Canada),■Raymond■Yuill■Chartered■Accountants■(Bedford,■Bridgewater■and■Liverpool,■Canada),■Bell■&■Company■LLP■(Burlington,■Canada),■Sanderson■&■Company■(Kelowna,■Canada),■Incentive■Access■Group■(Surrey,■Canada),■PPI■Consulting■Limited■(Ottawa■and■Toronto,■Canada)■merged■with■BDO■Canada;■Cofidex■was■acquired■by■BDO■France■(Nice,■Cagnes-sur-Mer■and■Beausoleil,■France);■PKF■Ross■Melville■merged■with■BDO■Auckland■(Auckland,■East■Tamaki■and■Takapuna,■New■Zealand),■ReSolve■Accountants■merged■with■BDO■Rotorua■(Rotorua,■New■Zealand)■and■Kennedy■Allbon■Tane■merged■with■BDO■Bay■of■Islands■(Whangarei,■New■Zealand);■Revisorgruppen■Telemark■AS■(Skien,■Norway),■Universal■Regnskap■AS■(Fredriksstad,■Norway),■Advice■Consulting■Group■AS■(Skien,■Norway),■Expedio■AS■(Fredriksstad,■Norway),■Olav■Flatland■AS■(Kristiansand,■Norway),■Regnskap■&■Revisjon■Rolf■Jostein■Dversnes■(Kristiansand,■Norway),■Skagestad■Revisjon■AS■(Mandal,■Norway),■Gunnar■Grøtnes■AS■(Kristiansand,■Norway)■and■Sotra■Regnskap■AS■(Bergen,■Norway)■merged■with■BDO■Norway;■CAP■Chartered■Accountants■(Tyger■Valley,■South■Africa),■Unleash■Consultants■(Johannesburg,■South■Africa)■merged■with■BDO■South■Africa;■K■Yeminli■Mali■Musavirlik■Denetim■ve■Danismanlik■Hizmetleri■Anonim■Sirketi■(Ankara,■Antalya■and■Istanbul,■Turkey)■merged■with■BDO■Turkey;■Morgan■Franklin■Limited’s■UK■team■was■acquired■by■BDO■Consulting■(London,■UK);■Alpern■Rosenthal■(Pittsburgh,■Philadelphia■and■South■Florida,■US),■Business■Forums■International■(nationwide■headquarters■in■Los■Angeles,■USA),■Hartman■Leito■&■Bolt■(Fort■Worth■and■Dallas,■USA),■Hogan■Taylor■(Tulsa,■USA)■joined■BDO■USA

Added: BDO■Ebrahim■&■Co■(Kabul,■Afghanistan),■BDO■Bangladesh■(formerly■Nurul■Faruk■Hasan■&■Co)■(Dhaka,■Bangladesh),■BDO■Fiji■(formerly■G■Lal■&■Co)■(Suva■and■Lautoka,■Fiji),■BDO■Guyane■Antilles■(Cayenne,■French■Guiana),■BDO■French■Polynesia■(formerly■FITEC)■(Papeete,■French■Polynesia),■BDO■(Vientiane,■Laos),■BDO■Myanmar■(formerly■JF■Group)■(Yangon,■Myanmar),■BDO■Réunion■(formerly■Conseil■&■Audit■Développement■SA)■(St.Clotilde,■St.Benoit,■Le■Port■and■St■Pierre,■Reunion■Island■&■Mayotte),■BDO■USVI■(US■Virgin■Islands)

BKR International M&A:■Exponens■(Paris,■France),■Gumbiner■Savett■Inc.■(Los■Angeles,■US)

Added:■Auditangol■Consulting■Enterprise■(Luanda,■Angola),■Adebola■Sobanjo■&■Co■(Abuja,■Nigeria),■Advantage■Advisors■(Melbourne,■Australia),■Alas,■Oplas■&■Co,■CPAs■(Manila,■Philippines),■Chengdu■Zhongda■(Chengdu,■China),■Cnockaert■&■Salens■bvba■(Brugge,■Belgium),■Gesem■(Alicante,■Spain),■Jinghua■CPAs■Company■Limited■(Beijing,■China),■Rewise■(Brussels,■Belgium),■Rudler,■PSC■(Cincinnati,■US),■VWC■(Seattle,■US)

Lost:■Osunbade,■Okiti■&■Co.■(Lagos,■Nigeria),■Thornton■VanTassel■(Perth-Andover,■Canada),■Wessly■(Warsaw,■Poland)

CPA Associates International

Added:■ATC■Certified■Public■Accountants■(Athens,■Greece),■Consultores■Empresariales■Especializados■(Veracruz,■Mexico),■Devaux■&■Associes■(Luxembourg■City,■Luxembourg),■Tafoya■Barrett■&■Associates■(Durango,■US)

Lost:■McDonald■Jacobs■(Portland,■US),■Moss,■Krusick■&■Associates■(Orlando,■US),■Eubank■Betts■Hirn■Wood■(Jackson,■US),■Friedman,■Suvalle■&■Salomon■(Boston,■US),■Gaines■Kriner■Elliott■(Buffalo,■US)

Crowe Horwath International

Added:■Hamza■&■Associes■(Alger,■Algeria),■Alfa■Capital■Assessora■I■Auditors■SL■(Andorra■la■Vella,■Andorra),■Crowe■Horwath■Bahamas■(Nassau,■Bahamas),■Donoway■Assurance■TAA■(Minsk,■Belarus),■Crowe■Horwath■doo■(Zagreb,■Croatia),■Trinavis■GmbH■&■Co.■KG■(Berlin,■Germany),■LeapRidge■Advisors■LLP■(Mylapore,■India),■SF■Consulting■(Jakarta,■Indonesia),■Horwath■Erastus■&■Co.■(Nairobi,■Kenya),■Crowe■Horwath■Foederer■(Eindhoven,■Netherlands),■JC■Descalzo■&■Asociados■(Asuncion,■Paraguay),■Rosexpertiza■LLC■(Moscow,■Russia),■Crowe■Horwath■BDM■(Belgrade,■Serbia),■GMCP■(Madrid,■Spain)

Deloitte M&A:■Deloitte■Philippines■member■Navarro■Amper&■Co■merged■with■Grant■Thornton■International■Philippines■member■Punongbayan&Araullo■(Philippines);■acquired■Banyan■Branch■(Seattle,■US);■acquired■Digicon■(Queensland,■Australia);■acquired■Quattro■Integration■Group■(Canada);■acquired■McColl■Partners■(Charlotte,■North■Carolina,■US);■acquired■Vigilant■(US).■Added: opened■Rwanda■office■(Kigali,■Rwanda);■opened■Ethiopia■office■(Addis■Ababa,■Ethiopia);■■Lost:■Deloitte■Public■Sector■Internal■Audit■(London,■UK)■■Alliances:■alliance■with■3D■Systems■(US)

IAB 545v2.indd 20 27/01/2015 17:55:06




FIRM MOVEMENTS


DFK International Added:■Krypton■Services■Group■(correspondent■member)■(Belo■Horizonte,■Brazil),■V.V.■Kale■(correspondent■member)■(New■Delhi,■India),■Alqalaa■Allybia■(correspondent■member)■(Misratah■and■Tripoli,■Lybia),■Alfa■Group■(correspondent■member)■(nationwide,■Netherlands),■LPG■CPAs■(correspondent■member)■(San■Juan,■Puerto■Rico),■Alok■K■Saksena,■Accounting■&■Auditing■(correspondent■member)■(Doha,■Qatar),■Althaus■(to■be■confirmed■by■members’■ballot)■(Moscow,■Russia),■Revizori■i■Savetnici■doo■and■Konsultant■Revizija■(correspondent■member)■(Belgrade,■Serbia),■Levitt■Kirson■(correspondent■member)■(Johannesburg,■South■Africa),■iAudit■(Croatia),■Kimani■Kerretts■&■Co■(Kenya),■IBN■Hyan■(Oman)

Lost:■Isgandarov■&■Partner■(Azerbaijan),■Torquato■&■Asociados■(Bolivia),■Segal■(Toronto,■Canada),■Hörstmann■Weber■&■Partner■(Wuppertal,■Germany),■Sankaran■&■Krishnan■(Chennai,■India),■Richard■Hill■Rams■(Papua■New■Guinea),■Klint■Anderson■Revision■(Norrkoping,■Sweden),■Glavbuh■Audit■(Ukraine)

Ecovis International Added:■Ecovis■R■Kabra■&■Co.■(Mumbai,■India),■Ecovis■RSK■Associates,■LLP■(New■Delhi,■India),■Ecovis■Israel■Ozery■CPA■(Tel■Aviv,■Israel),■Intui■CVOA■(Leuven■and■Brussels,■Belgium),■Ecovis■ARB■Auditors■Incorporated■(Johannesburg■and■Durban,■South■Africa),■Ecovis■Fuller■International■CPA■(Dubai,■Ras■al-Khaimah■and■Sharjah,■UAE),■Ecovis■RKCA■Fuller■FZC■(Dubai,■Ras■al-Khaimah■and■Sharjah,■UAE)

Lost:■Ecovis■Norway■–■Main■Partners■AS■(Oslo,■Norway),■Ecovis■AccountingService■Bel■(Minsk,■Belarus)

EY M&A:■KPMG■Denmark,■The■Parthenon■Group■(US),■Thomson■Reuters’■Trust■Outsourcing■(US)

EuraAudit Added:■Fir.■ba■doo■(Bosnia),■Audit■Exact■(Moldavia),■WHS■Steuerberatungsgesellschaft■(Germany),■Globus■services■(Panama),■IBS■Group■(Romania),■AFG■Audit■(Armenia),■Audit■Accounting■Consulting■(Georgia)

Lost:■Chevallier■et■Bauer■Associé■(Toulouse,■France),■DTAX■(Saarebrücken,■Germany),■Auditex■(Central■Africa)

FinExpertiza Added:■FinExpertiza■Outsourcing■(Moscow,■Russia)

GGI Added:■Hans■&■Associes■(France),■ADE■Professional■Solutions■(Russia),■Grinex■Group■(Czech■Republic),■SLT■Ceradini■Pigarelli■Rossi■&■Associati■(Italy),■Studio■Baldi■(Italy),■Baldi■&■Partners■(Italy),■DSA■International■(France),■JC■Kling■(Germany),■Reifferscheid■&■Partners■(Germany),■Dr■Muth■&■Partners■(Germany),■BFP■(Austria),■Austin■Pock■+■Partners■(Austria),■Lars■Weibull■AB■(Sweden),■Zevallos■Lazabara■(Paraguay),■Chinni■Seleme■Bugner■y■Asociados■(Argentina),■Grupo■Asesores,■Auditores■y■Consultores■Gerenciales■(Honduras),■Brock,■Schechter■&■Polakoff■(US),■Boatsman■Gillmore■Wagner■(US),■Peters■Advisors■(US),■Haynsworth■Sinkler■Boyd■(US),■Robert■Yam■&■Co,■CA■(Singapore),■Innovex■(Tanzania),■PE■Mathew■(Sri■Lanka),■Blackmore■Virtue■&■Owens■(New■Zealand),■Walker■Davey■(New■Zealand),■Cummings■Flavel■McCormack■(Australia),■Duncan■Dovico■Chartered■Accountants■(Australia),■Barry■Mendel■Frank■Group■(Australia),■SJN■Chartered■Accountants■(Australia),■Tokyo■Consulting■Group■(Japan),■Kyowa■Accounting■Group■(Japan),■Alatheer■Audit■(Oman),■Tokyo■Consulting■Firm■(Myanmar)

Lost:■Low,■Yap■&■Associates■(Singapore),■Lawler■Alliance■(Australia),■G&B■Corporacion■SA■(Nicaragua),■Dinamiki■(Greece),■De■Keijzer■Nipius■&■Co.■(Netherlands),■Alfaro■y■Asociados■(Honduras),■MdM■Revizija■(Serbia)

GMN International Added:■AO■Partners■(Lagos,■Nigeria),■An■Phu■Auditing■(Hanoi,■Vietnam),■Nisar■&■Kumar■(Mumbai,■India),■Saporta■Penn■Chen■(Bnei■Brak,■Israel),■Global■Wealth■(Mauritius),■Altern■Audit■(Budapest,■Hungary)

Lost: Bray■Chan■(Adelaide,■Australia),■Klako■Group■(Kowloon,■Hong■Kong),■Heng■Lee■Seng■(Singapore),■Merrotts■(Brisbane,■Australia),■Helen■Thrush■(Nelsruit,■South■Africa),■GSP■Treuhand■(Rorschach,■Switzerland)

Grant Thornton International

Added:■Grant■Thornton■Afghanistan■(Afghanistan),■Grant■Thornton■British■Virgin■Islands■(British■Virgin■Islands),■Grant■Thornton■Cambodia■(Cambodia),■Grant■Thornton■Advisory■Co■(Myanmar),■Grant■Thornton■Consulting■Pakistan■(Pakistan),■FBK■(Russia),■Grant■Thornton■Specialist■Services■(Cayman■Islands),■ReviTrust■Holding■Establishment■(Lichtenstein),■Grant■Thornton■Vietnam■(Vietnam),■Baker■Tilly■Tunisie■(Tunisia)

Lost: Zgombic■&■Partners■Group■for■Auditing■(Croatia),■Union■des■Experts■Comptables■(UEC)■(Tunisia)

HLB International Added:■Revik■(Bosnia),■Rokembach■+■Lahm,■Villanova,■Gais■&■Cia.■Auditores■(Brazil),■Trinity■Financial■Services■(British■Virgin■Islands),■HLB■Chile■(Chile),■Safwat■Ebeid■&■Co.■(Egypt),■COGEP■(France),■DBA■(France),■P.■Mallidis■–■M.■Zoumpathianou■(Greece),■HLB■R.■Seebarran■&■Co■(Guyana),■Alfaro■y■Asociados■(Honduras),■Fadnis■&■Gupte■(India),■Consulenti■Associati■(Italy),■Cezam■&■Associates■(Kenya),■Fiduciaire■International■SS■(Luxembourg),■NC■(Mozambique),■Guadamuz■Rueda■Martinez■&■Cia■(Nicaragua),■Trejos,■Egan■&■Asociados■■(Panama),■Getsix■(Poland),■Garry■Whiteknight■&■Partners■(Rwanda,■Uganda),■TMH■Eduardo■Molina■(Spain),■French■Duncan■(UK),■Mont■Audit■Plus■(Montenegro),■Wint■(Sweden)

Lost:■HLB■Leon■&■Asociados■Auditores■Y■Consultores■(Bolivia),■HLB■Jackson■Fox■(Channel■Islands),■Consaudit■(Chile),■Zhejiang■Dewei■CPAs■(China),■HLB■Venegas■y■Colegiados■(Costa■Rica),■ACG■(France),■HLB■NODA■(Italy),■Auditing■Firm■Almaz■(Kazakhstan),■Stavanger■Revisjon■(Norway),■BF■Consulting■Group■Corp■and■Forero■Gordon■&■Asociados■(Panama),■PDR■Certified■Public■Accountants■(US)

IAPA Added:■Harwood■Hutton■■(Beaconsfield,■UK),■Vine■&■Partners■(Hamilton,■Canada),■Nazorat-Audit■(Tashkent,■Uzbekistan),■HoogeveenLuigjes■Accountants■en■Belastingadviseurs■(Leusden,■Netherlands),■Getzel,■Schiff■&■Pesce■(New■York,■US)

Lost: Hobeika■Auditing■and■Consulting■(Beirut,■Lebanon),■Alex■Picot■(St■Helier,■Jersey),■Berdon■■(Manhattan,■US),■Potapovica■un■Anderstone■(Riga,■Latvia),■Studio■Borio■(Florence,■Italy),■Hunter■Hagan■(Scottsdale,■US),■H&L■Auditores■Consultores■(Santiago,■Chile),■AFK■Audit■■(St■Petersburg,■Russia),■KMRA■Audiitorburoo■OU■(Tallinn,■Estonia)

IECnet/EPR Added:■Business■Krug■(Moscow,■Russia),■Morera■Asesores■&■Auditores■(Barcelona,■Spain),■Denis■G.■Fillion■CMA■(St.■Pierre-Jolys,■Canada),■Biswanath■Chakrabarty■&■Company■(Yellowknife,■Canada),■Scase■&■Partners■(Calgary,■Canada),■Rumley■Holmes■(Barrie,■Canada)

Lost: Beta■consulting■(Skopje,■Macedonia),■Fudiciaire■Ratio■(Douala,■Cameroon),■EPR■(Winnipeg,■Canada),■Gibson■&■Associates■(Kamloops■,■Canada),■Jeffery■Spicer■(Welland,■Canada),■EPR■Kielstra■&■Co■(Niagara■Falls,■Canada)

Integra International Added:■Verdus■Auditores■(Sao■Paulo,■Brazil),■SyncBase■(Toronto,■Canada),■Salgado■Contadores■(Guadalajara,■Mexico),■Cabinet■Conseil■d'Experts■(Rabat,■Morocco),■TAC■Professional■Services■(Lagos,■Nigeria),■Orenstein,■Ostro■(Bucharest,■Romania)

Lost:■Rodriguez■Ciancio■(Caracas,■Venezuela),■Lumenis■Auditoria■(Barcelona,■Spain),■Russel■James■(Johannesburg,■South■Africa),■M■G■izvejestaji■(Split,■Croatia),■Levy■Casey■(Halifax,■Canada),■NK■Contibilidade■(Sao■Paulo,■Brazil),■Cabinet■Belaid■Eldjama■(Algiers,■Algeria)

IAB 545v2.indd 21 27/01/2015 17:55:06




FIRM MOVEMENTS


JHI Association M&A:■Davidson■Fox■&■Company■acquired■David■Stella■(Endwell,■US);■Lipschultz■Levin■&■Gray■acquired■Gene■Pacion■(Chicago,■US);■Mallah■Furman■&■Company■acquired■Arthur■T■Tenenbaum■(Plantation,■US);■McCay■Duff■purchased■a■sole■proprietor■(Ottawa,■Canada);■RBZ■merged■in■Levin■&■Company■Management■and■Kaufman■&■Bernstein■(Los■Angeles,■US)■Added: Al■Sabati■(Riyadh,■Saudi■Arabia)■Lost: Dorfman■Abrams■Music■(Saddlebrook,■US),■En-terpret■(Chicago,■US),■Pritchard,■Bieler,■Gruver■&■Williams■(Philadelphia,■US),■Alltax■Group■(Basel,■Switzerland),■Critchleys■(Oxford,■UK),■Grinex■Consulting■(Prague,■Czech■Republic),■Leshem,■Shalam■&■Co.■(Tel■Aviv,■Israel),■C.H.■Chang■&■Co.■(Taipei,■Taiwan),■gpl■Solutions■(Sydney,■Australia),■Ho■Chee■Mee■&■Co.■(Kuala■Lumpur,■Malaysia),■Li,■Tang,■Chen■&■Co.■(Wanchai,■Hong■Kong),■Marf■&■Associates■(Perth,■Australia),■Puthran■Chartered■Accountants■(Dubai,■UAE),■Shearer■&■Elliss■(Unley,■Australia),■Tokai■&■Co.■(Nagoya,■Japan),■Wilsonn■Partners■(Shanghai,■China)

KPMG M&A:■acquired■assets■of■Qubera■Solutions■(US,■UK);■acquired■P3■(Germany);■acquired■AXIA■Consulting’s■Workday■Consulting■Practice■(US);■acquired■Rothstein■Kass■(New■York,■US);■acquired■SAFIRA■Consultadoria■em■Imformatica■(Lisbon,■Portugal);■acquired■BBK■(US);■acquired■Cynergy■Systems■(Baltimore,■US);■acquired■SR7■(Sydney,■Australia);■acquired■Link■Analytics■(US);■acquired■BDO■Auditores■Independentes■and■BDO■Consultores■(Brazil)Lost: KPMG■Denmark■(merged■with■EY■Denmark)■(Denmark),■KPMG■Brazil’s■outsourcing■practice■(Brazil)■Alliances:■strategy■alliance■with■McLaren■Group■(UK)

Kreston International Added:■Friebe■Prinz■(Lüdenscheid,■Germany),■Consilium■(Glasgow,■UK),■Jiangsu■Gonqin■CPAs■(Wuxi,■China),■Dandeker■(Chennai,■India),■Eurasian■Financial■Services■(Almaty,■Kazakhstan),■Bentleys■New■Zealand■(Auckland,■New■Zealand),■b2Finance■(Brazil)■Lost: Simpson■Forsyth■(Aberdeen,■UK),■BCS■Direction■(Sydney,■Australia),■Kalani■and■Company■(Jaipur,■India),■Finaudit■(Almaty,■Kazakhstan),■Aguirre,■Núñez■&■Asociados■(Tegucigalpa,■Honduras),■Reyes■Barrios■SC■(Saltillo,■Mexico)

KS International Added:■Modernity■International■Accountants■and■Business■Advisers■(Amman,■Jordan),■Al-Jeeran■&■Co■KSI■Public■Accountants■(Kuwait■City,■Kuwait),■KSi■Bahrain■(Bahrain),■AG■Accountants■and■Consulting■(Panama■City,■Panama)

LEA Global Added:■Isas■(Mexico),■Garrido■Licona■Y■Asociados■(Mexico),■CTM■Revision■(Denmark),■Bit■Associates■(Mauritius),■Artion■(Greece),■Orion■(Greece),■Audit■Účetnictví■(Czech■Republic),■LB■Audit■Service■Company■(Azerbaijan),■JB■Audit■(Georgia),■Fatma■Sager■Al-Rushood■(Kuwait),■Iyer■Practice■Advisers■(Singapore),■Lewben■Group■(Lithuania),■Rosk■Consulting■(Lithuania)■Lost: Alpern■Rosenthal■(US),■Sinews■(Mauritius),■Ecovis■(Slovakia),■Johnston■Carmichael■(Scotland),■ET■Akonor■&■Co.■(Ghana),■C&C■Canessa■SA■(Chile),■CGA■Leading■Auditores■Consultores■(Chile),■Global■Auditores■Independentes■(Brazil)

Mazars M&A:■Cinotti■Group■(Zagreb,■Croatia)

MGI Added: Khan■Wahab■Shafique■Rahman■&■Co.■(Dhaka,■Bangladesh),■Ambit■Assessor■(Barcelona,■Spain),■Modzelewski■&■Partners■(Warsaw,■Poland),■Dominguez■&■Asociados■(Caracas,■Venezeula),■Santillan■Jimenez■y■Compania■(Oaxaca,■Mexico),■Valencia■Acosta■Consultores■(Jalisco,■Mexico),■Controle■Assessoria■Contabil■Ltda■(Manaus,■Brazil),■McLean■Bartok■Edwards■(Vancouver,■Canada),■Robin■Kramer■&■Green■(Philadelphia,■US),■LMHS■(Boston,■US),■Hertz■Herson■(New■York,■US)■Lost: A■Force■3■(Paris,■France),■Braver■PC■(Providence,■Rhode■Island,■US),■DNTW■(Montreal,■Canada),■Hajek■Kocova■a■spol■sro■(Prague,■Czech■Republic),■MGI■Melbourne■(Melbourne,■Australia),■MGI■Repetti■(New■York,■US),■Porras■Brown■&■Co.■(Managua,■Nicaragua),■SF■Consulting■(Jakarta,■Indonesia),■Weiler■&■Company■(Ontario,■Canada),■Whittemore■Dowen■&■Ricciardelli■(Queensbury,■US)

Moore Stephens International

M&A:■NS-Consulting,■Winx■Capital■House,■Winx■Dealmakers,■JGA■Consult,■HB■Berenschot,■Eeman■Accountants-Belastingconsulenten,■Corporate■Financial■Opportunities■Belux,■CFObelux■acquired■by■Moore■Stephens■(Brussels,■Belgium);■MGI■Repetti■and■Rosen■Seymour■Shapss■Martin■&■Company■acquired■by■Citrin■Cooperman■&■Company■(New■York,■US);■Matts■&■Co■merged■with■Atkinson■&■Co.■(Albuquerque,■US);■Rea■&■Associates■(Columbus,■US)■acquired■MA■Hoops■&■Associates■(Lima,■Ohio);■Frost■(Little■Rock,■US)■merged■with■Thomson■&■Company;■Armanino■(San■Ramon,■US)■merged■with■Berger■Lewis■Accountancy■Corporation■and■acquired■Rose■Business■Solutions;■SC&H■Group■(Sparks,■US)■acquired■by■Altus■Group;■Decosimo■(Chattanooga,■US)■merged■with■Elliott■Davis;■Bonadio■&■Co.■(Rochester,■US)■merged■with■Bevilacqua■&■Co;■Tiaoho■&■Co■(Taipei,■Taiwan)■merged■with■Enrich■&■Co.■CPAs;■Peters■&■Partner■(Hannover,■Germany)■had■a■takeover■of■Bahe■&■Bloch-Lorenz.■

Added:■Moore■Stephens■(Manama,■Bahrain),■Estilo■Consultoria■Ltda■(São■Luis,■Brazil),■Segal■(Toronto,■Canada),■Audit■&■Consulting■Financial■Tax■(San■Salvador,■El■Salvador),■Moore■Stephens■Associates■(Kuala■Lumpur,■Malaysia),■Advent■Tax■Consultants■(Kuala■Lumpur,■Malaysia),■Moore■Stephens■(George,■South■Africa),■PNA■Chartered■Accountants■(Bulawayo,■Zimbabwe)

Lost:■Moore■Stephens■(Parramatta,■Australia),■Moore■Stephens■(Melbourne,■Australia),■Moore■Stephens■RSP■(Liège■and■Charleroi,■Belgium),■Moore■Stephens■Vector■Auditores■(Brasilia,■Brazil),■Moore■Stephens■GS■(Bogota,■Colombia),■Khleif■&■Co.■(Amman,■Jordan),■Moore■Stephens■(Kuala■Lumpur,■Kuantan,■Penang■and■Kemaman,■Malaysia),■Moore■Stephens■HT■(Kota■Kinabalu,■Malaysia),■Moore■Stephens■Tan■Jin■Kok■&■Co■(Miri,■Malaysia),■Moore■Stephens■Panama■(Panama■City,■Panama),■Moore■Stephens■Linköping■(Linköping,■Sweden),■Fiiduciaire■Muller■Christe■&■Associés■(Neuchâtel,■Switzerland),■Bansley■&■Kiener■(Chicago,■USA),■Carr,■Riggs■&■Ingram■(Enterprise,■USA)

Morison International M&A:■Ehler■Ermer■&■Partner■acquired■Grund■&■Partner■(Neumünster,■Germany);■Hayes■Knight■Australia■acquired■RJ■Webb■&■Co.■(Brisbane,■Australia)■and■Bamfield■&■Co■(Sydney,■Australia);■Grupo■KMC■Contadores■Públicos■(Mexico)■acquired■Grupo■KMC■Martinez■Loredo■y■Zapata,■SC■(San■Luis■Potosi,■Mexico)

Added:■Junaidy■Shoaib■Asad■Chartered■Accountants■(Islamabad,■Pakistan),■Semper■Fortis■(Sofia,■Bulgaria),■Audit■and■Business■Consulting,■(Tbilisi,■Georgia),■Trusted■Adviser■(Budapest,■Hungary),■Cañón■y■Cañón■(Bogotá,■Colombia),■Alkhuzam■&■Co.■(Kuwait■City,■Kuwait),■Grand■Namibia■(Windhoek,■Namibia),■Marks■Paneth■acquired■ITR■(Washington■DC,■US)

Lost:■Tanna■Sree■Kumar■&■Co■Certified■Public■Accountants■(Dar■es■Salaam,■Tanzania),■Colling■Accounting■&■Consulting■(Budapest,■Hungary),■Grupo■KMC■Contadores■Públicos,■SC■(Mexican■group■of■firms)■lost■member■firm■Grupo■KMC■Boldo■Consultores■(Cancun,■Mexico)■&■Padilla■Orozco■office■(Guadalajara,■Mexico)

MSI Global Alliance M&A:■Abrams■Little-Gill■Loberfeld■(Boston,■US),■Ruitenburg■(Rotterdam,■Netherlands),■KLJ■&■Associates■(Detroit,■US)

Added:■BC■Patel■(Nairobi,■Kenya),■Pipara■&■Co■(Ahemdabad,■India),■Al■Maher■Group■(Abu■Dhabi,■UAE),■Catrakilis■&■Co.■(Atlanta,■GA,■US),■TBA■Total■Business■Administration■(Bogota,■Colombia),■Cusack■Garvey■(Dublin,■Ireland),■Heng■Lee■Seng■LLP■(Singapore,■Singapore),■Caminada■Treuhand■AG■Zurich■(Zurich,■Switzerland),■E&S■Accounting■and■Consulting■LLC■(Baku,■Azerbaijan)

Lost:■MHA■MacIntyre■Hudson■■(UK);■Alt■(Kiev,■Ukraine),■CAP■(Cape■Town,■South■Africa),■Rotenberg■Meril■(New■York■and■New■Jersey,■US),■Anderson■ZurMuehlen■&■Co.■PC■(Montana,■US),■Altitude■Advisory■(Adelaide,■Australia)

IAB 545v2.indd 22 27/01/2015 17:55:07




FIRM MOVEMENTS


Nexia International M&A:■Nexia■Puerto■Rico■(Puerto■Rico)■Added:■UAB■Jungtine■Auditoriu■Kontora■(Vilnius,■Kaunas,■Klaipeda,■Boli,■Lithuania),■Herrera■Consultores■(Costa■Rica),■RMA■Senegal■(Dakar,■Senegal),■Nexia■TA■(Tbilisi,■Georgia),■Nexia■SJ■Tanzania■(Dar■es■Salaam,■Tanzania),■BKSC■Auditors■&■Management■Consultants■(Maputo,■Mozambique),■Basel■Abusalah■&■Partner■(Doha,■Qatar),■John■F■Geib■Chartered■Accountant■(Calgary,■Canada),■Nexia■STT■Vietnam■(■Hanoi■and■Ho■Chi■Minh■City,■Vietnam),■PCG■Business■Advisers■(Asuncion,■Paraguay),■Pilot■Partners■(Brisbane,■Australia),■Friedman■CPA■Group■(Plantation,■US),■IDIAA■(South■Sudan),■DBA■Altorfer■Duss■&■Beilstein■(Zurich,■Switzerland),■LB-Rev■(Belgrade,■Serbia)■Lost: Nexia■APCA■(Hanoi,■Vietnam),■VMB■(Antwerp,■Belgium),■Global■Tax■Management■(US),■Tariq■&■Cassim■(Tariq■&Cassim,■Botswana),■Fidi■BC■(Lugano,■Switzerland),■Mitry■Breedy■y■Asociados■(San■Jose,■Costa■Rica),■Sevillia■Audit■(Ulaanbatar,■Mongolia),■Sulaimon■&■Co■(Yaba,■Nigeria),■Levitt■Kirson■(Johannesburg,■South■Africa),■ReviTrust■Group■(Zurch,■Switzerland),■Katz,■Sapper■and■Miller■(Indianapolis,■US)

Parker Randall International

Added:■Parker■Randall■Kenya

PKF International Added:■PKF■CPA■(Shanghai,■China),■PKF■Littlejohn■(London,■UK),■Johnston■Carmichael■(Edinburgh,■UK),■PKF■Cooper■Parry■(Derby,■UK),■PKF■FPM■Accountants■(Newry,■UK),■PKF■FPM■Partnership■(Dundalk,■Ireland),■PKF■Thailand■(Bangkok,■Thailand),■PKF■Hacketts■(Brisbane,■Australia),■PKF■Lawler■Melbourne■(Melbourne,■Australia),■PKF■Lawler■Sydney■and■Newcastle■(Sydney■and■Newcastle,■Australia),■PKF■Lawler■Perth■Airport■(Perth,■Australia),■PKF■Lawler■Tamworth■&■Walcha■(Tamworth,■Australia),■PKF■Associates■(Juba,■South■Sudan),■PKF■Burundi■(Kigali,■Burundi),■PKF■VMB■(Antwerp,■Belgium),■PKF■Bulgaria■(Sofia,■Bulgaria),■PKF■Kurdistan■(Erbil,■Kurdistan),■PKF■Riva■&■Asociados■(Santiago■de■Surco,■Peru),■PKF■NK■(São■Paulo,■Brazil)

Lost:■PKF■Capetown■(South■Africa),■PKF■Bloemfontain■(South■Africa),■PKF■Pretoria■(South■Africa),■PKF■Gauteng■(South■Africa),■PKF■George■(South■Africa),■Daxin■(China),■PKF■Re■Opinion■(Sarajevo,■Bosnia■and■Herzegovina),■PKF■Auckland■(New■Zealand),■PKF■Brazil,■PKF■Sierra■Leone

Praxity M&A:■BKD■merged■in■Wolf■&■Co.■(Chicago,■US)■Added: FGS■(Bonn,■Germany),■AlKaharashi■(Riyadh,■Saudi■Arabia),■Bexcell■(Sao■Paulo,■Brazil),■K■M■Alam■(Dhaka,■Bangladesh),■MCA■Auditing■&■Accounting■(Bogotá,■Colombia),■PT■Moores■Rowland■Indonesia■(Jakarta,■Indonesia)■Lost: Moores■Rowland■Malaysia■(Georgetown,■Malaysia),■Moores■Rowland■Zambia■(Lusaka,■Zambia),■Nielsen■&■Christensen■(Copenhagen,■Denmark)

PwC M&A:■acquired■GeoTraceability■(UK);■acquired■Mokum■(UK);■acquired■Booz■&■Co■(US);■acquired■HumanR■(Virginia,■US);■acquired■GBI■Mining■Intelligence■(Australia)■Added:■Camford■Law■(Singapore)

Reanda International Added:■Reanda■M■Y■Wu■&■Co■(Taipei,■Taiwan),■Finaudit■Firm■(Almaty■and■Aqtobe,■Kazakhstan),■Anil■Ashok■&■Associates■(New■Delhi,■Mumbai,■Ahmedabad,■Haridwar■and■Udaipur,■India,■correspondent■firm);■Lost:■Reanda■CPA■branches■(Jilin■and■Qinhaungdao,China)

RSM International Added:■Assertum■Audit■OÜ■(Tallinn,■Estonia),■Baker■Tilly■(London,■UK),■Cameroun■Audit■Conseil■(Douala,■Cameroon),■Canal■Audit■SARL■(Cotonou,■Benin),■RSM■Ashvir■(Kampala,■Uganda),■RSM■Panama,■SA■(Panama■City,■Panama),■SCG■Audits■(Accra,■Ghana),■SECCAPI■(Ouagadougou,■Burkina■Faso),■Management■and■Accountancy■Training■Ltd■(Yangon,■Myanmar)

Lost:■Nurul■Faruk■Hasan■&■Co■(Dhaka,■Bangladesh),■Fern■Groove■Business■Consultants■(Lusaka,■Zambia),■De■Levante■y■Asociados,■SA■(Panama■City,■Panama)

Russell Bedford International

M&A:■Girard■Lavoie■Mooney■merged■with■FBL■(Québec,■Canada)■Added: Pyramide■Conseils■(Lyon,■France),■Trevor■(Trento,■Italy),■Ansar■Accountants■(Bishkek,■Kyrgyzstan),■Limberger■Fuchs■Koch■&■Partner■(Stuttgart■and■Freiburg,■Germany),■Ulusal■Bačımsız■Denetim■ve■YMM■(Istanbul,■Turkey),■Kaiser■Scherer■&■Schlegel■(Washington■DC,■US),■Tait,■Weller■&■Baker■(Philadelphia,■US)Lost: Rex■Consulting■(Sofia,■Bulgaria),■Mikhailov■&■Partners■(Moscow,■Russia),■Bonné■&■Raeijmaekers■(Antwerp,■Belgium),■MCJ■&■Co.■(Manila,■Philippines)

Santa Fe Associates M&A:■Andersen■Group■(Formosa,■Salta,■Jujuy,■Mendoza,■San■Juan,■Bahia■Blanca,■Entre■Rios■and■Rosario,■Argentina)■Added: Canessa■y■Asociados■(Chile),■Pinto■y■Asociados■(Bolivia),■Olarte,■Hernandez■y■Asociados■(Venezuela),■Auditoria■Integral■de■Empresas■(Paraguay),■Dalma■James■FCCA■(Jamaica),■AME■Consulting■Limited■(Belize)■Lost: Soren■Inc.■(Barbados),■Bačımsız■Analiz■(Turkey)

SMS Latinoamérica Added:■Estudio■Cabrera■&■Asociados■(Bell■Ville,■Argentina),■Estudio■Julio■Ciurcilo■y■Asociados■(Zárate,■Argentina),■Estudio■CGD■(Bariloche,■Argentina)

Lost:■Port■of■Spain■(Trinidad■&■Tobago),■Mar■del■Plata■(Buenos■Aires,■Argentina),■Pergamino■(Buenos■Aires,■Argentina)

TGS Global Added:■Gettry■Marcus■(New■York,■US),■CNM■(Los■Angeles,■US),■Rocha■Salas■y■(Cia,■Mexico),■CBPC■(Luanda,■Angola),■Audit■Network■Hungary■(Budapest,■Hungary),■Einlighten■Advisory■Co.■(Bangkok,■Thailand),■KAP■Agus■Ubaidillah■&■Rekan■(Jakarta,■Indonesia)

UC&CS America Added:■Urbano■Toledo■(Lima,■Peru),■Asociados/Ramírez■y■Asociados■(Lima,■Peru),■CCA■Continuity■Auditores■Independentes■(Sao■Paulo,■Brasil),■Business■Performance■Consultores■(San■Luis■Potosi,■Mexico),■Pérez■Colín■Avilés■Vázquez■(Mexico■City,■Mexico),■Yustis■Malagón■y■Asociados■(Mexico■City,■Mexico),■Rubio■Fernández■y■Asociados■(Mexico■City,■Mexico)

Lost:■Ortega■&■Mendoza■Consultores■(Mexico■City,■Mexico),■Apaez■Melchor■Otero■(Mexico■City,■Mexico),■Ikeda■Vega■y■Asociados■(Mexico■City,■Mexico),■Ramírez■Aguirre■y■Cia■(Manzanillo■and■Colima,■Mexico),■Hernández■Galván■y■Cía■(San■Luis■Potosi,■Mexico),■Asesoría■Fiscal■del■Sureste■(Oaxaca,■Mexico)

UC&CS Global Added:■See■UC&CS■America■for■list■of■firms■added;■UC&CS■Global■also■formed■a■strategic■alliance■with■associaiton■Law■Group,■Tax■&■Labour■(Central■America)■and■a■cooperation■agreement■with■Reanda■International■(Asia-Pacific■Region)

Lost:See■UC&CS■America■for■list■of■firms■lost

UHY International M&A:■UHY■El■Geziry,■Elfakhrani■&■Co.(Cairo,■Egypt),■UHY■Dawgen■acquired■Astley■Jarrett■■&■Company■(Jamaica)

Added:■UHY■Assurance■&■Services■Cia.■(Quito,■Ecuador),■UHY■Abdul■Jabbar■Certified■Accountants■and■Consultants■Office■(Jeddah,■Saudi■Arabia),■UHY■Ammo■&■Co■(Doha,■Qatar),■UHY■Mont■Audit■DOO■(Podgorica,■Montenegro)

Lost:■UHY■Advisors■(Texas,■US),■UHY■Grow■OÜ■(Tallinn,■Estonia),■UHY■Orients■N■Ltd■(Riga,■Latvia),■UHY■Mont■Audit■DOO■(Podgorica,■Montenegro),■RevisorGruppen■Hordaland■DA■(Bergen,■Norway)

IAB 545v2.indd 23 27/01/2015 17:55:07



Memorable thoughts and quotes from global leaders in 2014

“A trend that could have a far-reaching impact is the rise of nationalism in many countries. Global economic conditions have provided the opportunity for nationalistic political parties, which advocate protectionist policies, to blame trade and foreign workers for continued slow economic recovery. Ultimately, the rise of nationalism could have major effects on trade, investment, effects on tax policy, and on mergers and acquisitions.”Mark■Weinberger,■global■chairman■&■chief■executive,■EY

“Succession is a real issue – not just in accounting firms, but in all corporates – that needs very careful attention by

existing management. If it is dealt with incorrectly, it is the end of the business, end of the strategy. If it is dealt

with successfully, there is a continuance of prosperity.”Geoff■Barnes,■chief■executive■and■president,■Baker■Tilly■International

“Audit is an important service; it’s certainly one that the profession is identified for, and through which we are delivering value back to society by having accurate financial information, but is it the driver of financial success? For most firms, no.”

“Sometimes it’s a business strategy to take short-term losses to gain some volume in a particular service area or industry. But as far as who to blame, the profession just needs to get in front of a mirror and say ‘it’s all about us’. If you aggressively discount, then you diminish your chances for long-term success and it drives down the quality.”Rob■Tautges,■chief■executive,■HLB■International

“In terms of recruitment, we’re trying to attract what we call ‘refugees from the Big Four’: people

with Big Four experience, who enjoy working with international clients but don’t want to be part of

the Big Four. We can provide them with the entire back office and let them do what they enjoy

most which is working with the clients.”John■Sim,■chief■executive,■PKF■International■

“In the US, university sports are very big and I went to the Ohio State University. Their American football team won the national championship in early January, and for me this was a very big deal. I know the IAB is not interested in this but I’m telling everyone I talk to anyways. This is the really important stuff – sports is what brings the world together. ”Ed■Nusbaum,■chief■executive,■Grant■Thornton■International

WealthInsight provides detailed data and insightful analysis on the world’s High Net Worth Individuals (HNWIs) and wealth sector. With decades of experience providing business information, WealthInsight helps organisations make informed decisions and win new business.

AAt WealthInsight’s core is our proprietary HNWI Database of the world’s wealthiest individuals. Around this database we have built a number of valuable research based products and services that make WealthInsight much more than just a rich contact list.

We work with and provide solutions for: Wealth Managers Private Banks Family Offices Technology Providers Professional Services – Consultants, Accountants, Lawyers, Real Estate Professionals Fund Managers, Asset Managers, Venture Capitalists Non-profits and Educational Institutions

For more information contact us at [email protected]: +44 (0)207 406 6553

Connect to Wealth Through Intelligence

About WealthInsight

Editor:■Ana■GyorkosTel:■+44■(0)20■7406■6707Email:■[email protected]

Deputy Editor/Editor of The Accountant:■Carlos■Martin■TorneroTel:■+44■(0)20■7406■6706Email:■[email protected]

Reporter: Isabella■GrottoTel:■+44■(0)20■7406■6704Email:■[email protected]

Reporter:■Vincent■HuckTel:■+44■(0)20■7406■6709Email:■[email protected]

Group Publisher:■Ameet■Phadnis Tel:■+44■(0)207■406■6561■Email:■[email protected]

Chief Subeditor:■Nick■MidgleySubeditor:■Kev■Walsh

Customer■Services: Sharon■HowleyTel:■+44■(0)20■7406■6615Email:■[email protected]

Director of■Events:■Ray■GiddingsTel:■+44■(0)■203■096■2585Email:■[email protected]

Sales Inquiries: Alex■AubreyTel: +44■(0)■203■096■2603Email:■[email protected]

London Office5th■Floor,■Farringdon■Place,■20■Farringdon■Road,■London,■EC1M■3AP

Asia Office20■Maxwell■Road#04-02J,■Maxwell■HouseSingapore■069113Tel:■+65■6383■4688Fax:■+65■6383■5433Email:■[email protected]

Financial■News■Publishing■Ltd,■2014Registered■in■the■UK■No■6931627ISSN■0265-0223■Unauthorised■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.

IAB 545v2.indd 24 27/01/2015 17:55:19

WealthInsight provides detailed data and insightful analysis on the world’s High Net Worth Individuals (HNWIs) and wealth sector. With decades of experience providing business information, WealthInsight helps organisations make informed decisions and win new business.

AAt WealthInsight’s core is our proprietary HNWI Database of the world’s wealthiest individuals. Around this database we have built a number of valuable research based products and services that make WealthInsight much more than just a rich contact list.

We work with and provide solutions for: Wealth Managers Private Banks Family Offices Technology Providers Professional Services – Consultants, Accountants, Lawyers, Real Estate Professionals Fund Managers, Asset Managers, Venture Capitalists Non-profits and Educational Institutions

For more information contact us at [email protected]: +44 (0)207 406 6553

Connect to Wealth Through Intelligence

About WealthInsight

IAB 545v2.indd 25 27/01/2015 17:55:20

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Tel: +44(0)20 3096 2636 ; Email: [email protected]

IAB 541v2.indd 26 19/09/2014 10:19:50

Tel: +44 (0)20 3096 2636; Email: [email protected]

Tel: +44 (0)20 7406 6553 Email: [email protected]

pobcamend.indd 1 21/11/2014 15:19

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