"Are you a network?" I used to ask the question naturally as if there was a clear division between networks and associations, as if a clear set of categories of structures existed and each international accountancy organisations could be clearly identified and categorised within certain well defined parameters.
But then in the learning process the concept of alliances within networks came about. And the other way around: networks within associations and all sorts of other blurry set-ups. Ultimately it became clear that nothing in the structure of those global organisations was clear.
Reading the definition of a network issued by the International Ethics Standards Board for Accountants’ code of ethics (a definition in line with the European Union Statutory Audit Directive), a number of conclusions emerged.
One, that beyond the letter of the definition being or not being a network was a matter of perception from the clients, the regulators and the organisations themselves. Two, that the definition of a network was essentially about audit, and more specifically of cross-border audit.
Yet while we know the share of audit revenue in networks and associations, it is hard to say how much of it comes from cross-border audits. We’ve asked the Big Four if they had this information while most did not get back to us, one told us: "This isn’t information we have to hand as not something we disclose during results."
It is safe to assume that the Big Four is dominating this market and yet year-on-year we see their audit revenue shrink, for some now even below 30% of total revenue.
So is it fair to have a definition that sets in a way the architecture of the players in the market, for something that actually very few of them do and which represents a small part of the activities of those who do it? (Beginning of an answer on Pages 7-16).
There is a wider world beyond big audits: SMEs, entrepreneurs, investors, internal auditors, accounting technicians. A world far less glamorous than big audit and the shiny tip of the iceberg occupied by the Big Four & Co. A world which this magazine has seldom explored, and I plead guilty.
For this month issue we take a first dip under these deep waters and touch the surface of what we could dramatically call Accountancy’s 99%. We hope this issue will serve as the first swimming stroke into this unchartered world.