There is no need of privately writing me about my point on breaking accounting firms into audit and non-audit businesses to boost independence and audit quality. If you think anytime someone writes to improve something, that person is attacking the people, stop reading me. Some have used the word ‘defame’, ‘malign’, etc. I understand – but it changes nothing.
My recommendation remains: no company can be an advisory firm and also an auditing firm. Advisory and Auditing businesses should be independent companies, not just divisions or units within one company – either you do advisory or you do auditing. That way we can reduce conflicts
I am not an accountant and please bear with me for my perspective on this. But I have seen things that make me sad. In Nigeria, we need to ensure that any company offering Auditing services cannot sell Advisory services besides audit! Simply, all auditing firms must do only one thing – auditing.
I am an academic – we live to freely share ideas, objectively, without any fear. I am not a contractor, so I am not afraid of not being awarded a contract. Be guided if you want to imitate me! Unless you are worried that breaking the firms will reduce their revenues, there is nothing you can say I have said maliciously.
But I can assure you that I have respect for these big firms; my two sisters are accountants. Yet, that does not mean I cannot make recommendations to make auditing better in Nigeria. If moving the audit unit makes them better, they win, and Nigeria also wins.
May we live in an era in Nigeria where men and women can make recommendations without fear of their stomachs! People seem extremely fearful not to offend, making herding easier with no injection of new ideas. Any contrary insights are seen as rebellion. I did not want you to lose your job – I was simply hoping Nigeria works better to protect and expand that job. Country First!
I would have expected someone asking how to execute the breakup without loss of jobs and chaos in our economy. You can make points why it may not be optimal. But framing that I was attacking these firms is unfortunate. Please wear bigger pants – we are all adults!
But read this: by 2025, my point will happen in UK.
The report seeks to keep up reform momentum after past attempts to end the so-called Big Four’s dominance of book-keeping made little headway.
EY, KPMG, Deloitte and PwC have sought to head off being split up by voluntarily agreeing not to offer consultancy services to audit clients.
The cross-party report said that if the CMA opts for only operational separation, it should be reviewed after three years to see if it ends cross-subsidies and improved audit quality.
“If not, we recommend that the CMA then move to implement a full structural break-up of the Big Four into audit and non-audit businesses in the UK,” the report said.
Deloitte said a structural split would harm audit quality, and could materially damage Britain’s competitive position as a leading capital market. The “Big Four” are global but the reforms could only apply in Britain.
1. Advance your career with Tekedia Mini-MBA (Sept 13 – Dec 6, 2021): 140 global faculty, online, self-paced, $140 (or N50,000 naira). Click and register here.
2. Click to join Tekedia Capital Syndicate and own a piece of Africa’s finest startups with a minimum of $10,000 investment.