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12 Mar 2009
The profession’s biggest firms will move away from the network model towards more integrated businesses or very loose associations, according to Mazars president Patrick de Cambourg.
In an interview in this week’s Accountancy Age, he said that the level of accountability accounting networks can offer is ‘possibly not sufficient’ and that full integration would be the answer for some of them while others would operate within much looser associations.
‘The profession will move towards more integration for some players and move towards alliances for the rest,’ said de Cambourg.
BDO International, Deloitte and Grant Thornton are battling litigation aimed at establishing links between their umbrella network and individual firms.
Global firms operating under single branding then claiming that member firms are independent was a model that cannot continue, as ‘people are led to believe there’s more than that, so the profession has to think to consider the way forward for more accountability, transparency and possibly innovation’, said de Cambourg.
But he defended firms facing huge litigation claims, saying that the market cannot survive with fewer major players and limiting liability must remain an area of discussion between governments, stakeholders, auditors and their clients.
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Benefits of association without the legal liabilities
The larger firms have long stressed the benefits of their close association with overseas 'member' firms. Equally the structures chosen for such associations were intended to ensure that if one was sued that the others would be insulated from legal liability. We have yet to see if that is the case.
The challenge going forwards will be whether firms operating under the same brand name are able to resist not just legal challenges but also the stigma that could follow if one of their member firms fails as a result of litigation. And then one has to ask whether operating under the same brand is better than having evidently separate member firms , operating under their own brands but belonging to the same association. The latter approach has always struck me as more transparent and sustainable.
Posted by: Mark Lee, 12 Mar 2009 | 00:00