Globalisation is the
most important issue facing the accounting profession, according to
David Furst. The new Institute of Chartered Accountants in England
and Wales president and Horwath Clark Whitehill chair speaks with
Carolyn Canham about the institute’s and Horwath’s global
ambitions.

Getting the balance of regulation right on a global level is
vital, according to David Furst. The new Institute of Chartered
Accountants in England and Wales (ICAEW) president explains: “There
needs to be some sort of consolidation of regulators because you
get so many different people who you are accountable to in some
way, who have some sort of authority.”

Furst predicts consolidation of regulators on a global scale
will happen in due course, led by consolidation in the
profession.

“It’s interesting the way post-Enron all of the major firms were
saying ‘we are all independent firms here, there and everywhere’,”
he says. “And then [the profession started moving towards
consolidation]. KPMG last year when the UK, Germany and Switzerland
got together and now Ernst & Young have really done it.”

Consolidation here to stay

This consolidation phenomenon is the direction the profession
must ultimately take, adds Furst, who is also chair of UK firm
Horwath Clark Whitehill.

“You not only need the brand, but you also need to expect the
same service if you go into a Horwath office wherever it may be… It
needs to be like when you walk into a McDonald’s anywhere in the
world – you know you’re going to get a hamburger with those
wretched gherkins on top, which I throw away, but there’s
consistency,” he explains.

“You know what you are going to get and people will go more and
more for brands. The name needs to be there, but it’s not just the
name, it’s the quality. And that is what people are going to be
going for.”

Horwath International’s global strategy includes ambitious plans
to become the seventh-largest network in the world.

According to the International Accounting Bulletin’s
world survey in 2007 the network was the ninth largest, behind RSM
International and the loosely integrated Praxity alliance in terms
of member firms’ combined fee income.

Helping facilitate this strategy is what Furst calls a
“beefed-up structure”. Frank Arford has been employed as a
full-time chief executive for the past 18 months and there are also
three full-time regional directors – Bernard Delomenie in Europe,
Mok Yuen Lok, who is based in Malaysia and Eduardo Pestarino, who
looks after the Americas.

One of the strengths behind Horwath’s ambition is the close
relationships between the network’s partners, Furst says. About 250
people are expected at the international conference in London in
September and about 100 attended each of the three regional
conferences this year.

“You are not picking up the phone or sending an email to
somebody you don’t know. You can actually say with confidence to
your client, ‘go and speak to this guy there and he will be able to
look after it’,” Furst explains. “There is an unwritten rule in
Horwath that international work will get priority over domestic
work.”

On the domestic front, Furst concedes Horwath Clark Whitehill is
unlikely to ever be number seven in terms of fee income in the UK,
unless the firm has an upwards merger.

“We want to retain our independence, we want to keep control of
what we are doing,” he says. “We look from time to time at quite
substantial acquisitions, but there is not an awful lot out there,”
he adds. “The really good firms want to stay independent, while
with the less good firms, who are in trouble, it has never really
been our strategy to pull firms back from the brink.

“Other firms have done that, Grant Thornton took over Robson
Rhodes, who were in a bit of a pickle and before that BDO took over
Moores Rowland, and Baker Tilly have a history, going back 15
years, of taking over firms that are not doing too well. That’s
never been our strategy.

“Size for size’s sake isn’t important – the quality is far more
important than size. But we have conversations with people from
time to time and one of these days – well, you never know.”

The ICAEW’s global focus is encapsulated in an ambitious
ten-year strategy it embarked on in 2007. Behind that strategy is
the aim to move from being a UK body with overseas members – at
present 19,000 of the institute’s 131,000 members are based outside
of the UK – to a truly international body.

Part of the 10-year strategy is to set up 15 international hubs
– physical presences around the world that will provide member
services and career assistance; and also hopefully attract new
students.

Southeast Asia has been earmarked as the first location, which
Furst hopes will be established by the end of his one-year
presidential term: “I set the challenge to Michael Izza, who is our
chief executive, that we will have the first hub, if not the
second, opened in my year of presidency.

“He has certainly accepted the challenge for the first, but he
doesn’t like to be defeated so we might get the second as
well.”

The ICAEW’s ultimate aim is for its qualification to become the
leading international business qualification, which may or may not
lead to it being the largest global institute.