PracticeConsultingEuro will hit fees

Euro will hit fees

Big firms expect lower audit earnings as euro gives rise to finance consolidation.

Leading firms have admitted that they expect to lose audit revenue as a result of moves by businesses to consolidate their finance functions in the wake of the launch of the euro.

PricewaterhouseCoopers business processing outsourcing global leader John Barnsley said last week that his firm would earn less from its auditing service as technology, global economic factors and the introduction of the euro shaped business priorities.

Speaking at the launch of PwC’s first European Economic Outlook in Brussels last week, Barnsley said: ‘Companies have looked more closely at their non-core function needs which require full-time staff and have questioned whether they need to own these resources, such as accounting and finance, human resources and non-core procurement.’

Barnsley added that over-supply in several sectors and the desire to introduce standardisation across businesses would also mean that the pace of mergers and acquisitions would speed up. According to PwC’s own research, around 70 per cent of basic business processes are common to all organisations.

‘Nobody yet knows what the true effects will be and there will still be a need for these companies to audit their transactions,’ he said.

‘But it will simply take place in fewer centres. We will get less money from this but we could get more from outsourcing.’

Ian Scotter, director of Deloitte & Touche outsourcing arm SCL business development, agreed that there would be risks to the big firms as a result of moves by global companies to restructure their finance functions. Businesses as big as BMW have already said they will centralise their finance functions in the wake of a single European currency.

But Scotter said: ‘I think that the opportunities for people in accountancy are equal to the risks. If they embrace the chances that outsourcing gives them with vigour, then I do not think they have anything to worry about.’

SCL would be well placed to help companies consolidate and was looking forward to a growth in fees from this side of the business, he added.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer