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December 17, 2012

Comment: A turbulent year

Another 12 months have flown by and here we are again – rushing to get our last-minute shopping done and get our affairs in order for the Christmas break and the start of the New Year. Reflections on the shape of the global profession will largely be left for our January issue and its World Survey, but one cannot avoid a certain degree of reflection in December.

Looking back at the past year, it’s fair to say the period has been both eventful and turbulent for accounting firms globally. Focusing on the UK market several things spring immediately to mind: the Competition Commission investigation; trouble at RSM Tenon and consequent investigation of its auditor PwC by the Financial Reporting Council; BDO UK and PKF’s imminent merger; and innumerable business challenges related to the state of the UK economy. If 2012 has been a restful year for any firm leaders, I’m sure the rest would love to know their secret.

The past month alone has brought to light several news stories likely to fill IAB headlines in the year to come. While the litigation environment has been relatively quiet through the year, the past few weeks have seen a surge of litigation involving accounting firms. First, KPMG and Deloitte were named in a suit by Hewlett-Packard’s shareholders over accounting errors leading to controversy over the price of acquisition target Autonomy. Then, Ernst & Young in Canada agreed to a record settlement of $117m over its audit of Chinese timber firm Sino-Forest Corp – despite denying liability.

Then we saw the US Securities and Exchange Commission start an administrative procedure against the Big Four and BDO for not disclosing documents related to Chinese companies listed in the US.
As public and political frustration with the economic situation continues to simmer globally, more litigation and
regulatory intervention can be expected. Nevertheless, as UK firm leaders state unanimously, the profession has a vital role to play in restoring public confidence in business.

Restoring trust in financial institutions and enabling business growth is priority number one – but until that happy situation is reached the profession must take its share of knocks.

Closer to home
Looking inwards for a moment, 2012 was a year in which IAB made some big steps. We held our inaugural awards event in Q1 and – given the industry reaction – decided to repeat the experience in 2013. May I remind readers that to do so, we will need you to nominate outstanding firms and individuals to us before 30 January.

Content from our partners
Best practice considerations for firms putting their audit out to tender
Sterling Technology's VDR supported Nestlé with “the largest audit tender in living memory”
MPR & T Finance Joins BOKS International in Romania

We also teamed up with publishing and data provider Timetric, making us part of a bigger family and giving us a lot of options in terms of developing our content. To this end we have recently launched a new-look website, as well as an upgraded version of our data tool International Accounting Intelligence, featuring a comparison report tool and an all-web platform.

Later on down the line, we’re looking at even more possibilities for the way we gather and publish data – so watch this space. In the meantime, we’ve created an online entry form for World Survey data, which you will hopefully have found makes participation easier.
There have also been some changes on our team and as I write my fifth editor’s letter I would like to thank you all for the support you have given me through the past few months. I hope in 2013 we will continue our good relationship, and that you’ll help us make IAB even better.

The IAB team wishes you a Merry Christmas and a happy New Year.

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