Big Five firms have pledged to support and promote better quality accounting standards internationally after fierce criticism from the controller of the World Bank.
Jules Muis, who is also the bank’s vice-president, attacked the Big Five’s global brand strategies on the grounds that some of their subsidiaries were signing off accounts that did not live up to the quality of formal international accounting standards. Muis met with Big Five leaders last week to discuss the problem.
KPMG, Deloitte & Touche, PricewaterhouseCoopers and Ernst & Young all acknowledged Muis’ concerns, even though they involved direct criticism of their professional standards. Arthur Andersen was unavailable for comment.
A Deloittes spokesman said partners agreed at their international meeting in San Francisco that the firm should consider dropping clients who are not prepared to deal with proper quality accounts. In a couple of countries, the growth rates for Deloitte Touche Tohmatsu were down because it had sacked clients, said UK senior partner-elect John Connolly.
Muis’ comments also galvanised support for the International Accounting Standards Committee just as it was finalising its core package of standards for approval by international capital market regulators.
KPMG and E&Y supported the bank’s call, but said the Big Five alone could not introduce IASs. A senior auditor at one of the Big Five added: ‘It would be rather difficult for international firms to say everything must be done with IASs or we won’t work with you.’
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
In our latest managing partner Q&A looking towards 2017, CVR Global's Richard Toone talks about recruitment, and the potential threat of competition from the legal sector, as key issues for the firm in the coming year
Deloitte to avoid tendering for government contracts over the next six months, to appease Theresa May following consultant's report that painted a less-than-flattering picture of Brexit plans
In our first Q&A looking towards 2017, Menzies senior partner Julie Adams flags up increasing digitisation, aligned with more hands-on consultative services, as the key mix for her practice