There have been some juicy accounting headlines lately like “Big four UK accountancy firms face radical shake-up” and “UK accountancy firms face major overhaul under new plans”. Or, my personal favourite, Why are accountants getting their sums wrong?
Carillon, BHS, Patisserie Valarie – the public trust in audits in low. The CEOs of the Big 4 were called in front of MP committees and given somewhat of a talking to and, in response, they have agreed to ensure the independence of their audits by no longer performing non-audit work for FTSE 350 audit clients.
What does this mean for practice accountants that don’t work in the Big 4?
Well, the Big 4 aren’t simply going to scale back, make less revenue, and less profit. The machinery is there, they just need to find new clients to churn through it. If they can’t offer all services to the largest of companies, the chances are that they are going to look further down the ladder and pursue clients that were traditionally serviced by mid-tier firms.
It is always worth noting just how large the Big 4 are. If you combined firms five through ten (BDO, GT, RSM, Smith and Williamson, Mazars and PKF) the revenue of this new firm would still be less than the smallest of the Big 4 (KPMG).
So, if the Big 4 are going to pursue this new client base, (and rest assured, they are - three have already set up new departments) then the ripples will be huge. More competition will lead to tighter margins and a much greater emphasis on the soft skills of accountants.
What do these firms want?
Accountants that can win new business.
Accountants that can build strong client relationships.
Accountants that can offer value-adding advice and ensure client satisfaction.
Accountants that have always worked in a competitive environment and who have had a lot of direct client contact from the first days of their careers.
In a nutshell, I’m describing accountants who work in a smaller practice.
The Big 4 are hiring. The Top 20 are hiring.