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April 30, 2008

Independence clarity aids audit firm growth

Clarification on independence requirements has spurred the recent fee income growth of Italy’s largest professional services firm.

KPMG Italia: Fee income growth 2003-2007KPMG Italia recorded 14 percent growth in fee income to €403.1 million ($643.2 million) for the year ended September 2007 (see Solid growth despite ailing economy) in an economy that is growing at a snail’s pace.

KPMG Italia partner Giovanni Rebay told IAB that legislative changes implemented in 2006, which clarify independence requirements for audit firms, has allowed it to focus on services that previously it may have ignored due to conflict of interest concerns. “This has allowed all the audit firms in Italy to concentrate their commercial fortes, providing certain kinds of services to their audit clients, and other services to non-audit clients,” Rebay said.

Rebay said there is a “very long list” of services lines the new guidelines allow: “You cannot give fiscal planning services to audit clients, while you can provide them compliance services. All normally routine fiscal services are permitted services to audit clients, while everything that deals with fiscal planning and other services regarding internal control – everything which regards governance and so on – is normally not permitted for audit clients.”

Carolyn Canham

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