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Analysis/firm movements
International Accounting Bulletin
reform
EU audit reform to affect UK CC remedies implementation
The UK Competition Commission (CC) is
to delay the implementation of remedies
for the UK audit market, which include
10 -year mandatory retendering, until
more is known about the European audit
reform expected to be voted on by the
European Parliament in February.
The CC said that the EU reform regulation and directive documents are “likely
to be finalised and come into force in the
second quarter of 2014” and the watchdog said it is: “keen to follow the principles of better regulation including by
ensuring that our orders do not contradict
or duplicate EU regulation. Therefore, in
the light of these developments we have
extended our administrative timetable
to enable us to consider fully the implications of the EU proposals on our own
orders. We anticipate further rounds of
consultation on our revised orders in the
third quarter of 2014 and a commencement date in quarter four.”
At the end of December the European
Parliament, EU Council and the European
Commission reached an agreement which
determines compulsory rotation of public interest entities’ (PIEs) auditors after
10 years, after which period it allows the
possibility for member states to allow the
auditor or audit firm to continue audit of
the same PIEs up to the maximum duration of 20 years where a public tendering is conducted.
The agreement also proposes a 70% cap
on the fees earned for non-audit services
rendered to an audit client. Therefore an
audit firm would not be able to tender for
non-audit services worth more than 70%
of the audit fee.
Prior to the EU consensus, the CC
announced in September that UK audit
firms will have to retender their FTSE
350 audits at least every 10 years. However the regulator did not find enough
evidence to support mandatory rotation
of audit firms.
Following the trialogue agreement in
December, the lead parliamentary committee on the reform, the Committee on
Legal Affairs (Juri), has passed both the
directive and the reform trialogue document in early January.
This was the last step before the directive and the regulation are passed on to the
European Parliament for a vote in February.
Juri has been working on the audit
reform brief since the end of 2011, when
the European Commission passed-on the
initial document.
The MEP responsible for the audit reform
package , Sajjad Karim, said: “Reform of
the audit market has been long overdue
and the proposals that were voted through
are unprecedented. This draft piece of legislation will have positive ramifications,
not just for the audit market, but for the
financial sector as a whole. We are rebuilding confidence one step at a time.” <
FirmMovements
The partners of global consultancy
social network analysis, and
with annual revenues of PHP1.2bn
firms has traditionally focused on the
Booz & Co have agreed to the
business-process optimisation.
($26.8m), according to the firms.
medium-sized market, in particular
Punongbayan & Araullo (P&A) and
Baker Tilly International US firm
Navarro Amper & Co (NA&Co), the
BlumShapiro and German firm
company’s proposed merger with PwC.
A preliminary merger agreement was
reached in October and now it’s been
formally agreed, the transaction is
expected to be completed by March.
The branding for the combined
business, under the PwC umbrella, is
still to be jointly determined and will
be announced in the coming months.
Booze & Co has 3,000 staff in 57
offices worldwide. In 2012 it reported
about $1.4bn in revenue.
member firms of Grant Thornton
Baker Tilly Roefls have completed a
International and Deloitte in the
merger and acquisition respectively.
Philippines respectively, have
agreed to merge.
In a statement the firms said
they have signed a memorandum
of agreement, which will lead
to a definitive one, with the aim
of combining ”their respective
professional practices” in the
KPMG US has completed the
Philippines, effective in July. In the
acquisition of analytical solutions
meantime the two firms said they will
company Link Analytics.
conduct due diligence work and set
The acquisition was first
up an integration plan to ”ensure a
BlumShapiro’s merger is
owner-managed companies.
MSI Global Alliance has added
firms from Kenya, India, the United
Arab Emirates, Colombia and the US
to its international association.
with firm Friedman, Suvalle
Geneva Group International (GGI)
& Salomon PC (FSS), based in
has added Dansk Revision, an
Newton, Massachusetts. FSS has
accounting and audit firm based in
30 staff, and its services include
Farum, Denmark to its association.
consulting, accounting, tax and
financial services.
In Germany, Baker Til