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IAB Online – January
Top 5 articles
KPMG UK Co-op Bank audits under
FRC investigation
CC delays remedies implementation
due to EU audit reform
Deloitte merges with Grant
Thornton firm in the Philippines
PwC and Booz merger approved
KPMG US completes acquisition of
Link Analytics
Most retweeted article
CC delays remedies implementation
due to EU audit reform
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UK
FRC investigates KPMG UK’s
audit of Co-op Bank
The UK Financial Reporting Council
(FRC) is to pursue an investigation
of KPMG UK’s audit work on the
Co-operative (Co-op) Bank, which
will focus on the preparation,
approval and audit of financial
statements.
The FRC started making enquiries
in relation to the bank’s accounts
in November. In particular the
regulator said the enquiries related
to the disclosure in the 2012 annual
report of the bank’s regulatory
capital position.
Those enquires also related
to the bank’s loan impairment,
impairment of its investment in its
replacement banking IT platform,
and to fair value disclosures,
according to the FRC.
The investigation will be carried
out in accordance with the FRC’s
normal procedures and under the
terms of its disciplinary scheme,
which operates independently of
professional bodies.
Co-op Bank has been suffering
losses attributable largely to its
2009 takeover of former building
society Britannia and in the first
six months of 2013 the bank lost
£781m ($1,282m) after tax. Last
June it emerged that the bank had a
£1.5bn hole in its accounts.
KPMG UK, the bank’s auditor for
30 years, said it is understandable
that there should be appropriate
regulatory scrutiny, given the high
media profile and public interest
associated with the case.
of BDO Auditores Independentes
and BDO Consultores in November
2013.
While Grant Thornton Brazil has
strengthened its position as the
fifth-largest firm in the country, it
is still less than a third of the size
of its nearest rival, KPMG, with just
over 1,000 staff.
Grant Thornton International’s
Brazil firm reported revenues of
BRL101m ($42m) in 2012.
GLOBAL
BRAZIL
Grant Thornton turning the
tables in Brazil
Grant Thornton International has
re-enforced its position as the
fifth-largest firm in the market with
two M&A deals, coming almost four
years after EY acquired Terco Grant
Thornton in Brazil.
The first deal is the acquisition of
KMPG Brazil’s outsourcing practice
and the second a merger with
former PKF firm Directa Auditores.
The acquisition of KPMG’s
outsourcing practice will add 70
staff and $5.5m in revenues and the
merger with Directa Auditores adds
120 staff.
Brazil has been a very
competitive market in the past
four years, and in 2010 KPMG
took over two of the largest midtier firms in the market, BDO
Auditores Independentes and BDO
Consultores, while EY took over
similarly sized Terco Grant Thornton.
In the wake of those deals BDO
International filed a complaint to
the local competition authorities
which approved KPMG’s acquisition
Praxity grows 9% in 2013
Member revenue for global alliance
Praxity grew 9% to US$4.1bn in
2013, up from $3.7bn in 2012.
While all service lines grew,
management consulting led the
way with 27.9% growth to $417m,
followed by litigation support, up
18.6% to $33.5m.
Praxity’s largest service line, audit
and accountancy, was up 8.7% to
$1,976m, while its tax services were
up 9.8% to 906.4m.
Recovery and insolvency grew
13.1% to $42.9m, while corporate
finance, Praxity’s smallest service
line, grew 12.3% to $32.6m.
In North America, member
revenue was $2,245m, an 11.2%
rise on 2012, while revenues in
Europe were $1,314m, representing
a growth of 7.5% compared to 2012.
Praxity saw its biggest growth in
Asia-Pacific, up 11.3% to $349.3m,
and Africa and the Middle East
also saw growth with revenues
of $122.3m, an 8.1% increase.
Revenues were flat in Latin America,
at $51.5m. <
Movers & shakers
Grant Thornton US partners
and principals have elected Jeff
Burgess, Nichole Jordan and Brad
Preber to the partnership board
at the firm’s annual leadership
meeting.
Burgess is the firm’s national
managing partner of professional
standards. Jordan serves as New
York metro assistant managing
partner for industries and markets
and national banking and securities
leader. Preber is Grant Thornton
US national managing partner of
forensic and valuation services.
Kreston International has elected
2 y January 2014
“It is to be expected that this
scrutiny should extend to the audit
while recognising that the auditor
is independent of the events which
gave rise to the issues experienced
by the bank,” KPMG UK commented.
“As auditor to the bank we
be