PCAOB to help Accounting Firms expand into Consulting Practices
The Public Company Accounting Oversight Board have approved their 2014 fiscal-year budget as well as a 2013-2017 strategic plan that will hopefully see accounting firms expanding into consulting practices.
The PCAOB has noticed a growth in consulting revenue and acquisition activity in the past number of years. The Big 4 consulting firms have increased their consulting revenue by 33% in the past 5 years compared to a mere 6% increase in audit revenue. The PCAOB feel the consulting revenue will continue to increase.
In the past 18 months the Big 4 firms have announced over 36 acquisitions of consulting businesses with 19 of them being from the Big 4 firms in the US. Recently the audit firm, KPMG announced they are branching into data and analytics (D&A), read more about that in our previous blog Audit firm KPMG has today launched KPMG Capital
With the accounting scandals and the introduction of the Sarbanes-Oxley Act several of the big audit firms sold off their consulting practices. But in recent years firms have been slowly growing their consulting and advisory business again through mergers and acquisitions. This year Deloitte acquired the Monitor Group in January and last month PWC announced plans to merge with Booz & Co.
The PCOAB have now approved their budget and strategic plan. The 2014 budget is $258.4 million which is up 5% on last years’ budget. The strategic plan for 2013-2017 has also been approved and the board hopes it will serve as the foundation for the 2014 budget, and to guide the PCAOB’s programs and operations. The total accounting support fee for 2014 is $252 million, with approximately $225 million allocated to public companies and $27 million to broker-dealers.
Elements of the strategic plan include investor protection and improving audit quality. The board also intends on monitoring emerging trends that may lead to increased audit risk, including cyber security risk.
Stay up to date with Audit International
To stay up to date with our latest jobs, news and updates on what’s happening in the audit market follow us on twitter and our LinkedIn company page.
902 total views, 1 today