LONDON (Reuters) - Deloitte [DLTE.UL] has retained top spot among the world’s “Big Four” accountants, a survey showed on Wednesday, noting those leading firms had so far retained their grip on the audit market in the face of regulatory changes designed to boost competition.
Deloitte, whose audit clients range from carmaker General Motors Co (GM.N) to investment bank Morgan Stanley (MS.N), achieved total fees including consultancy work of $34.2 billion last year, giving it a $248 million lead over second-placed PwC [PWC.UL], the annual International Accounting Bulletin World Survey said.
The top four, also taking in EY [ERNY.UL] and KPMG [KPMG.UL], have a combined share of 66 percent of the global accounting market and the fees gap with the biggest mid-tier firm, BDO, has widened by over $7 billion in the past decade.
“The numbers indicate that the recent regulatory interventions in the market designed to create more competition are not reflected in the financial results published by the industry,” the survey said.
EU rules make it a requirement from June 2016 for companies to switch accountants at least every 10 years and also ban an auditor from offering certain advisory services to the same client. The aim is to increase competition and avoid too-cozy relationships with clients that span decades in some cases.
Britain has already pushed ahead with voluntary changes on auditor switching ahead of the EU rules.
Accounting firms told the survey that because the EU rules give the bloc’s 28 member states 83 options to allow companies to retain an accountant for more than a decade under various circumstances, reform may have little impact.
Rob Tautges, chief executive of mid-tier firm HLB International, told the survey he expects the rules to create a game of “musical chairs” among the Big Four, rather than help smaller accountants pick up market share in advisory work.
Jean Stephens, chief executive of RSM International, another mid-tier accountant, said: “It will throw some opportunities our way, but did it achieve what we had hoped? No. I think everyone agrees on that”.
Some senior accountants, however, said national regulators were intensifying contacts between themselves and that some are likely to copy the EU auditor rotation and advisory work curbs over time. Accountants also expect the rapid pace of consolidation to continue as mid-tier firms bulk up to help them compete globally.
Editing by David Holmes