Big firms in standards control bid
A powerful and 'shadowy' group of senior partners from the seven largest firms has emerged to move closer to edging control of accounting standards from the world's accountancy regulators.
Accountancy Age
has learned the Global Steering Committee, made up of partners from the Big Five plus Grant Thornton and BDO Stoy Hayward, is the body behind last week’s moves by the International Federation of Accountants to create a Forum of Firms to improve standards.
Created to establish peer review for international firms, the new group is nominally an IFAC body, but will be firmly under the control of the GSC with longstanding steering committee member Karl Ernst Knorr, of BDO, Germany, taking on the Forum’s chairmanship. With seven sub-committees, full-time staff and a growing budget, the GSC is poised to become the most influential body in international accounting. It will even bankroll the forum’s start-up.
The GSC has worked on plans to improve standards for the last two years after scathing criticisms from investors that firms produced varying standards of audit in different countries. The GSC took the idea of a forum to IFAC in July 1999 and is expected to launch further initiatives later this year. Impatience with existing accountancy institutes propelled the seven largest firms to combine a search for solutions.
A source close to the GSC said: ‘The institutes are no longer leading the profession – it’s the firms. The largest seven have 80% of clients and have a hold on standards. What will be next?’
Brian Smith, secretary of the GSC, said the body hadn’t sought to be ‘secret’ but appeared ‘shadowy’ as it chose not to publicise itself until it had delivered concrete proposals.
Links
More than 20 firms agree benchmark plan
Warm welcome for forum initiative