View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
April 30, 2008

Global chiefs cautious on effects of credit crunch

Global chiefs cautious on effects of credit crunch

Global accountancy leaders do not believe the credit crunch is likely to have a drastic effect on the professional services industry next year, although some have urged caution.

Speaking to IAB for this year’s World Survey, partners warned there could be a slow-down in borrowing and the economy, but felt this would not be a major hurdle to an industry that grew by 20 percent in terms of fee income over the past year.

PricewaterhouseCoopers Global chief executive Sam DiPiazza issued the sternest warning. As the largest Big Four network, with global revenues of $25.2 billion and a large financial services client base, PwC is most likely to feel the after-effects of a credit crunch that was ignited by the US subprime crisis.

“The credit crisis is real, not just for our financial institutions but for all of our clients who have either funding needs, in other words they have to access debt markets, or they have liquidity investments that could be exposed,” DiPiazza explained. “That places a technical challenge on the profession to be sure that we apply standards with judgement, we have to be part of the solution and I think the profession’s done well setting out guidance, consulting across our networks, among the firms. I think that’s going to be a very interesting, challenging issue for the profession over the next 12 months.”

Sufficient structure

Global chiefs from the mid-tier believe their firms are well structured to deal with any downturn in business. Most view the credit crunch as an opportunity to boost their insolvency and recovery service lines.

Kreston International executive director and international secretary Jon Lisby commented: “We are unusual in that in comparison to many of the mid-tiers we are not… known for insolvency work or business recovery and the indications are that it will be a growth service line.”

BDO International chief executive Frans Samyn said an economic downturn could loosen the job market and encourage professionals to return to public practice.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to International Accounting Bulletin