Link: IAS special
Firms have admitted that the extra workload created from advising their plc audit clients has meant they are already working overtime.
In some cases, firms are even charging a supplementary fee for the extra hours dedicated to ensuring customers are IAS compliant.
Mike Tovey, managing director of mid-tier firm Chantrey Vellacott, which also advises non-audit clients, said: ‘This is a very big issue. Within the next 12 months there is going to be a significant impact on fee income as a result of IAS.’
He said the pressure was not just coming from the deadline, which is now just 15 months away, but also from the requirement for companies to produce shadow IAS accounts from year ends after January 2004.
David Hunt, director of assurance and business services at Smith & Williamson, said that work had increased because a whole raft of standards would be coming in at once, and that the standards impacted on their clients in different ways. ‘There is no norm to this because some clients need significant work, while others will have less impact,’ he said.
Firms said that the additional fees billed to some clients for work generated by IAS compliance had created a conflict, as customers felt this was a normal part of the audit fee.
‘It is no different from one-off work except, in some cases, clients are not happy to pay because it does not generate extra income for them, as mergers and acquisitions work does,’ said Hunt.
Sukhbinder Heer of RSM Robson Rhodes said his firm was gaining new work because of IAS. ‘The workload is increasing now. We are just seeing the first signs of it, but it is likely to increase. The work will begin now because there needs to be a consist-ency of financial results and it will create further opportunities.’
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