have come at the worse possible moment, according to the
International Accounting Bulletin’s Spain survey (see
Spain
survey:Firms prepare for challenges ahead).
Firms are experiencing increased workloads
as clients comply with a new General Accounting Plan (Plan General
Contable – PGC) introduced in January last year and new related
party tax rules introduced in February this year. However, clients
are in survival mode and resisting fee increases.
Fee income from UHY Fay & Co’s audit and
consulting business remained static in the past year, while it
should have grown.
“We have been trying to collect more fees
thanks to [the PGC] because it requires a lot more advice to
clients,” managing partner Bernard Fay said. “But the funny
situation is that clients are not accepting increases in fees right
now. They want to include everything in whatever has already been
agreed.”
The PGC takes Spanish accounting standards for
non-listed companies a step closer to IFRS and companies need to
upgrade accounting processes and train staff.
Moore Stephens Hispania international liaison
partner Jorge Blanquer said work is flowing from both the PGC and
new related party tax rules, but the timing is unfortunate.
“If you are an entrepreneur/owner of a
company, the main point now is to survive and accounting and
bookkeeping stuff is secondary,” he said.
The implementation of new regulation is made
more difficult because some accounting rules are still being
developed by regulators. Many points are unclear and new
interpretations are arriving from regulators almost daily, Blanquer
said.
The benefits of the PGC on BDO Audiberia
Auditores’s bottom line have also been tempered by fee pressure but
the firm’s president, Alfonso Osorio
Iturmendi, said fee pressure is good for BDO.
“Our cost structure, personal costs and
general costs are lower than all the larger groups, so we are in a
very good position to be more competitive than the rest of our
competitors in the market,” he said. “In many cases we have to
reduce our fees to be competitive in the market. But generally
speaking I think it is a very good opportunity for a firm like
BDO.”
