PracticeAuditCan the UK hang on to audit?

Can the UK hang on to audit?

KPMG Europe boss John Griffith-Jones caught the attention of the profession last week when he called for an audit ‘kitemark’ in a speech delivered to ICAS members

Nicholas Neveling, AccountancyAge

But such was the focus on his ‘kitemark’ calls, that his equally interesting
points on how off-shore competition is going to reshape the UK audit market were
missed.

‘Large and significant chunks of audit work may be transferred to lower cost,
but by no means lower quality, professionals overseas,’ Griffith-Jones said.

If his predictions are correct, then accountants should be worried. It has
been easy for professionals, whether they be lawyers, accountants, journalists
or bankers, to assume that while manufacturing or call centres could be
outsourced to the Indias and Chinas of this world, their skills could never be
seriously challenged.

That, it seems, is no longer the case. Judging from Griffith-Jones’ comments,
the capacity and skills in emerging markets to deliver audits, legal advice or
banking are mounting a serious challenge to UK firms.

But the concerns for professional services firms extend beyond the emergence
of new competitors. Griffith-Jones raised the point that if large amounts of
audit work moved off-shore, UK plc could miss out on a valuable pipeline of
business talent.

An accounting qualification and a stint in a big firm is one of the main
training routes to the boardroom. If audit work is carried out overseas, UK
companies could lose one of their most valuable ‘business training schools’,
leaving a huge talent and experience void.

‘Strip away the lower end of the pyramid ­ and you strip away the supply
source of the future,’ Griffith-Jones said.

It is an ominous, but very possible, scenario.

Nicholas Neveling is a reporter on Accountancy Age

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

2d Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

1w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter