PracticePeople In PracticeFat cat fee inquiry.

Fat cat fee inquiry.

Firms' unwillingness to publish audited accounts highlighted in new

The Office of Fair Trading has confirmed it could examine the issue of non-publication of audited accounts by accountancy firms as part of its investigation in to possible anti-competitive practices in the profession.

The investigation, ordered by Labour into the ‘more economically significant professions’, is thought to be an attempt to root out ‘fatcat’ executives.

Leading players in the profession say published accounts would allow any authority to get a better idea of whether the profession is acting competitively by examining profit and loss reports. Currently very few firms publish their own audited accounts with KPMG, Ernst & Young and Panell Kerr Foster among the notable exceptions.

John Wosner, chairman at PKF, said: ‘Having no accounts published is unhelpful if you are trying to create a competitive environment. What published accounts will do is give an idea of what profitability is like in the profession, what the norms are and whether it is competitive.’

Mike Rake, managing partner at KPMG, said the publications of accounts would aid customers and ‘stakeholders’ when firms made fee proposals.

Among the issues to be scrutinised by the OFT is whether ‘recommended fee scales’ operate in the profession though it is believed this is unlikely to be the case. It will also look at how tight restrictions on entry to the profession.

However, published accounts, which remain a thorny issue for accountancy firms, could crop up and would be investigated thoroughly by the OFT if it did, according to a spokesman.

Despite that the biggest driver to bringing accounts out into the open is likely to be a Bill currently making its way through Parliament that will allows firms to become limited liability companies.

gavin_hinks@vnu.co.uk

Leader, page 14.

Related Articles

Is inefficiency stealing your time and money?

Accounting Firms Is inefficiency stealing your time and money?

6m Emma Smith, Managing Editor
CIMA elects new president

Institutes CIMA elects new president

6m Emma Smith, Managing Editor
Transparent currency trade: How to achieve costs visibility

Governance Transparent currency trade: How to achieve costs visibility

6m Emma Smith, Managing Editor
Introduction to KPMG UK’s new leadership team

Accounting Firms Introduction to KPMG UK’s new leadership team

6m Emma Smith, Managing Editor
EY appoints head of UK Infrastructure Asset Intelligence practice

Accounting Firms EY appoints head of UK Infrastructure Asset Intelligence practice

8m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
MHA MacIntyre Hudson advises on management buy-out

Accounting Firms MHA MacIntyre Hudson advises on management buy-out

10m Emma Smith, Managing Editor