Posts Tagged “audit firms”

A major European Commission framework contract for audit services has been won by a grouping of three Russell Bedford member firms. The group, led by Lubbock Fine (London), includes Equation (Paris) and Domus (Berlin).

Russell Bedford International is a global network of independent firms of accountants, auditors, tax advisers and business consultants. Ranked amongst the world’s leading accounting and audit networks, Russell Bedford is represented by some 460 partners, 5000 staff and 280 offices in more than 90 countries in Europe, the Americas, the Middle East, Africa and Asia-Pacific.

The substantial contract is to provide financial audit services to the EC in relation to research grants under the Seventh Framework Programme for Research and Technological Development (FP7). Such research grants are typically extended to universities, higher education establishments, not-for-profit organisations and companies, including SMEs.

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Baker Tilly is to join RSM International network. Baker Tilly is to become accountancy network RSM International’s UK member firm.

The firm will formally join the network later this year following completion of their current notice period with existing network Baker Tilly International.

During the transition period, the firm will continue to trade as Baker Tilly, but will make it clear that it is an independent member of RSM International, after which the firm will then adopt the global network name and corporate identity.

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The new audit reforms have been passed in the European parliament on Thursday last. The European politicians voted in favor of the reforms that will see large-listed companies putting their audit contracts out to tender once every 10 years.

Under the new rules listed companies are required to change their auditors every ten years. A company may be eligible to get this period extended by a further ten years if tenders are carried out, and by 14 years if the company appoints more than one firm to carry out the audit. There is also a 70% cap on fees from non-audit work.

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The RSA Insurance Group is to put a cap on the amount of non-audit fees that their auditors can earn. The capped amount will be 25% of the total audit fee.

KPMG which are the company’s current auditors earned a total of £7.2m in 2013, of which £2.2m was for non-audit services. Some £1.3m of those non-audit services related to the identification of financial and claims irregularities in RSA’s Ireland division.

Previous to the appointment of KPMG as auditors, rival Big4 firm Deloitte was the company’s auditors. In 2012 Deloitte earned &15.7m, of which £9.5m related to non-audit services.

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Ernst and Young has strengthened it advisory practice through the recruitment of former KPMG partner Mark Hutchinson.

Hutchinson joined KPMG firstly in 1992 when he started his career. He left the big 4 firm 2 years later to join CME KHBB and returned again to KPMG in 1997. In 1999 he left and became partner at Circus Communications before joining Paeson Consulting. He then returned again to KPMG where his last role was a partner and head of management consulting.

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Big 4 firm PWC has acquired IT Consultancy Mokum. Mokum currently have 160 members of staff in their London and Manchester offices. These staff will now join the Big Four firm, with two of them made partner.

Mokum specialises in Oracle applications implementation, managed services and related software. The deal was signed on 13 February and is expected to be formally completed in March, subject to regulatory and independence compliance.

This is another step for the Big 4 firm in its effort to include technology in its services, after increasing demand from its clients for technology expertise in order to support business transformation programmes.

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The FRC is going to be analysing the audits of banks and building societies over this year. Attempts have been made to improve the quality of auditing of banks and building societies since the start of the financial crisis but these have been insufficient. As a result the FRC is planning to conduct a formal review of banks and building societies audits.

Within the FRCs draft plan & budget for 2014/25 they plan on conducting a formal review of bank audits in the second quarter of this year as soon as this year’s annual reports have been completed. This is in order to find out why progress in improving their quality has been so slow.

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Audit contracts are changing hands rapidly since the FRC and Competition Commission published their separate recommendations to enforce more frequent tendering of FTSE 350 audits. But recently KPMG managed to hang onto the Standard Chartered audit contract after it went out to tender in August of last year. Read more in our previous blog BIG 4 firm KPMG retains Standard Chartered audit

KPMG have been the banks auditor for 40 years and the big 4 firm earned around £9m last year from the audit.

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The European Parliament’s legal affairs committee have approved a draft agreement for EU audit reform in the hope that it will open up the EU audit services market beyond the dominant Big Four firms.

The EUs legal affairs committee voted in favour of the measures agreed in December. Read more in our previous blog Preliminarily agreement reached on the EU audit reform . These measures will force large-listed companies to change the firms that audit their accounts on a regular basis.

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The UK Competition Commission has put on hold its audit reform consultation process. The delay could last up to six months.

The delay is because of recent developments at a European level. The Commission had been aiming to be at the informal consultation stage but this stage won’t begin for the next four to six months.

Talks over the EU 10 year audit rotation have been on-going for some time and only recently were put on hold because of disagreements over the package of legislative measures. Read more in our previous blog Talks over the EU 10 year audit rotation have been put on hold

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