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September 21, 2015

Editor’s letter: Half full, half empty

By Vincent Huck

The party is over in Latin America. A region that enjoyed tremendous growth in the past 10 years is now coming to term with a new reality. If politics plays an important part in every country’s or region’s development, this is even truer in South and Central America. The region counts numerous countries with an extremely vibrant and dynamic political culture rooted in decades of left-wing social movements, right-wing coups and the CIA playing hide and seek in the shadows.

Many attribute the current economic difficulties, namely rising inflation and local currencies devaluation, to bad political decisions in the past decade. But China’s slowdown and the rules of a global market also play a part in this new reality. Nevertheless resilience in those parts of the world is such that the glass always looks more full than empty when talking to professionals from across the region

To take the temperature of the region in more detail, this month’s issue of International Accounting Bulletin inaugurates a partner insight survey. We asked partners from across the region about their thoughts on their respective markets, the opportunities they see and the challenge they face. Reading through their answers gives a sense of the region’s diversity and paints the picture of a glass sometimes half full and sometimes half empty. Hopefully this is a first of many other similar surveys.

Still on Latin America, Jean Marie Domond of the Santa Fe Associates network sent us his thoughts on the situation in Haiti five years after the earthquake that claimed between 250,000 and 300,000 lives, depending on estimates, with as many injured. Domond’s words are filled with a deep sorrow for his country’s struggle to rise again. While critical of the international community and foreign aid, he doesn’t shy away of criticising his own country and compatriots for their shortcomings. Half full or half empty, Haiti’s glass could be fuller according to Domond, but only if the accountancy profession plays its part.

Also in this issue, Jim Peterson former in-house lawyer at Arthur Anderson talks to sister publication The Accountant editor Carlos Martin Tornero about the fragility of the Big Four networks. He points to the risk those gigantic organisations face and how the risk of one of them falling apart still looms (page 15). Peterson alludes to the idea of a revamp of the audit model and even if partners, CEOs and chairmen repeat in interview after interview that audit remains and will always be the core service, figures tend to prove the opposite.

Deloitte UK, PwC UK and EY Global have all released their financial results this month and the glass is half empty for audit whose share of the overall revenues of these organisation continues to drop drastically. Check out our non-audit services monitor on pages 16 and 17 for an approximation of this demise.

To finish on a full glass, as of this month and as reported by the Financial Times, KPMG partners and clients can enjoy one at 20 Grosvenor Street – KPMG’s newly launched private member club soberly called No. 20.

An accountancy professional and faithful reader of International Accounting Bulletin reacted: "It struck me as something from another era, because you would have expected by now that public accountancy firms – once more – realised that ‘the public is their client’ and not those at the top of the organisations they audit. Anyway, I don’t believe that the public, or you and I for that matter, has access to this nice club."

We’ll drink to that!

 

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