Midsized Accounting Firms Call for Big Four to Share Expertise
The Big Four accounting firms should be sharing more of their technology and expertise with smaller counterparts across the UK.
That’s according to the Association of Practising Accountants (APA), which represents a group of midsized accounting businesses.
Martin Muirhead, chair of the APA, has told the Financial Times that he wants to see Deloitte, KPMG, EY and PwC helping other firms to improve and advance the ways in which they carry out auditing processes.
However, there are reports that partners at Big Four firms would be concerned that by sharing expertise they could fall foul of competition law.
From the APA’s perspective, the feeling is that midsized operators could benefit from knowledge sharing within the accounting industry, particularly with tougher regulations having come into effect in recent years in the wake of high profile auditing failures and a series of corporate accounting scandals.
Mr Muirhead told the FT that the biggest firms have learnt a lot recently about service quality and methodology and he’s suggested that sharing some of that knowledge with smaller accountants could “assist us in improving audit quality”.
On the subject of technology, the APA’s chairman said that relevant licences should be granted so that smaller firms can take advantage of the latest auditing systems being used by Big Four practitioners.
“Smaller firms do not have the resources to invest in the technology the Big Four use,” he explained.
Making the case for the sharing of knowledge and tech licences across the accounting industry, Mr Muirhead said that midsized and smaller operators effectively represent no competitive threat to the likes of Deloitte and KPMG.
But by sharing relevant insights and expertise those bigger firms could act in the public interest by helping ensure that there is a higher quality of service being provided beyond the Big Four firms, Mr Muirhead has argued.
Representatives of Deloitte, KPMG and PwC all told the FT that they would be open to the idea of co-operating more with smaller accountancy firms but suggested that any such undertaking would need to involve close consultation with regulators beforehand.
