Will the current structure of the big five accountancy firms be recognisable in a few years time? Unlikely, following the clampdown by the US Securities and Exchange Commission on conflicts of interest between audit and other accountancy services.
Increasing regulatory pressures along with strategic business considerations are driving change in firms which must be of interest to the Review Group on Auditors. Due to report by May 31st, the group is considering issues of conflicts of interest and self-regulation within the accountancy profession in the wake of the DIRT inquiry.
The SEC move has resulted in the sale by Ernst & Young of its management consultancy arm to IT group Cap Gemini. And Ernst & Young UK chairman Nick Land warned the enforced sale of consulting businesses may force another round of mergers. But this time it would be between five audit divisions.
Ernst & Young and PricewaterhouseCoopers will split their audit and consultancy operations into separate businesses. But Arthur Andersen is apparently taking a different course - it is said to be planning an overhaul of its structures to ensure conflicts are avoided.
Whatever course the firms choose, change is inevitable.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)