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Editor's Comment: Ranking does matter

When speaking to firm leaders from around the world they like to say that for them it's not all about the size of the firm or the ranking of the firm, but often I find this is actually far from the truth.

Firm ranking and benchmarking against competitors have always been key elements of success and particularly now as the market is hit by a raft of consolidation and M&A. Even the smallest difference in total annual member fee income has started to count, especially as the mid-tier market starts to bulk up.

Only a few days ago Baker Tilly UK, which has recently acquired assets of troubled RSM Tenon, announced it is to leave the Baker Tilly International network to join RSM International. While many reasons must have played a part in Baker Tilly UK's difficult decision, I dare say ranking and size in certain markets were key factors. While Baker Tilly is a strong and reputable brand, which will be hard to part with, RSM International seemed to have enough to offer to sway the firm.

One of the main reasons is probably some of RSM International's largest members, such as McGladrey in the US and Chinese firm Ruihua, which is ranked as the third largest in Mainland China.

Despite RSM International pushing the global brand in the past few years, both its UK and Chinese member do not brand under the RSM name, which might complicate Baker Tilly UK's branding decision or perhaps help push the RSM brand to the next level.

The firm has about six months, the average length of network membership notice period, to see what to do on the branding front.

Meanwhile Baker Tilly International will be faced with the even more challenging task of finding, or as they say finalising the formalities with, a new member in the UK. After RSM and Baker Tilly UK's announcement, Baker Tilly International rushed to say they will be making a new member appointment in the UK. Seeing as the discussions about Baker Tilly UK's future membership have been ongoing since the RSM Tenon deal I'm sure the network has had sufficient time to secure a replacement, which is most likely to be smaller than its outgoing member.

The latest development in the UK is just another indicator that global accounting networks and organisations are very much on the move and for network executives this must be an incredibly dynamic and stressful time as accounting market musical chairs continues.

EU audit reform debate no more

This month also marked the end (thankfully) of another lengthy debate, the EU audit reform, and now everyone, from the opposition to advocates of change, can put their daggers down and think and hope the implementation of the new audit legislation happens as seamlessly as possible.

However, as member states are allowed a great deal of flexibility on the reform the fear is the EU countries might end up with several different regulations, which many would agree is the worst outcome for a very global accounting market.

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