The biggest accounting firms have been forced to rein in how they market
themselves as global organisations as part of the fallout from Enron and
Parmalat scandals, according to Jane Howard, a partner at commercial law firm
Reynolds Porter Chamberlain.
In a presentation to a packed audience at the annual RPC Professional
Liability seminar, held at the Merchant Taylor’s Hall in central London, Howard
warned accountancy firms operating in networks to carefully explain how they
work in relation to other member firms.
She said that the decision by Judge Kaplan to allow $10bn lawsuit claims to
go ahead against Grant Thornton International and Deloitte Touche Tohmatsu, with
both firms closely linked to their own Italian firms involved on Parmalat’s
audits, was a stark warning to clarify the nature of member firms’ relationships
with their ‘umbrella’ organisation.
Many firms had recently utilised a general statement to the effect that the
umbrella organisation was not a firm itself, not a partnership, does not have
any ’employees’, has no ownership of any other member firms around the world and
they, in turn, do not own parts of each other.
‘It is early days, but it has exposed the reality behind the marketing,’
Howard told the audience.
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