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FINANCE: More Mergers Amongst Accountants

 



Recent Western Cape Business News

The South African accounting industry has seen much change recently, with the new JSE regulations that require firms to have at least three audit partners as well as an International Financial Reporting Standards (IFRS) advisor in house or under contract, putting strain on smaller firms.

 

These regulations also require auditors of listed companies to be listed on the JSE register of auditors as well as with the Independent Regulatory Board for Auditors (IRBA) and compliance with these requirements is onerous.

 

Further to this, the draft Companies Bill, which proposes exemption to small businesses from painstaking financial reporting and audits, will have a large impact on smaller audit firms, forcing them to rethink their structures and whether they will move away from, or towards, auditing.

 

Finally, but not least, the current skills shortage being felt by the industry places another huge pressure on firms as finding and retaining quality staff has become a major challenge.

 

All of these factors have seemingly led to an increase in mergers in South Africa in recent months.  David Warneke, whose mid-tier accounting firm has just completed a merger, confirms this.  Warneke is Tax Partner at Cameron & Prentice, the Cape Town member of Russell Bedford International, and his firm has merged with G.G. West & Company.

 

“By merging these two firms we will enhance our capacity, improve our turn around times, be better able to keep up with changes in legislation and take on larger audits. In short, we will benefit all round.”

 

This reflects the current industry trend for firms to enhance their service offering and provide greater access to expertise in times of skills shortages.

 

“The combined team of G.G. West & Company and Cameron & Prentice will be a blend of experience and youth where the partners will work very closely together and actively practice the concept of knowledge sharing.  Quality and value are the key differentiators in the current market – firms that invest in their resources and training to ensure that they consistently deliver good service will see growth.”

 

“The shared cultures of the two firms, which include a total commitment to all clients, excellence, integrity and experience will ensure that our clients receive the highest standards of service,” says Warneke

 

Warneke further states that global trends towards mergers is clearly being replicated in SA, where there are now increasing signs of consolidation.“There are manifold benefits to mergers.  As already stated, mergers allow smaller firms to comply with changing legislation and also to have access to a larger pool of skills.  In addition, mergers unlock value inherent in the separate firms.”

 

Industry professionals are predicting that within the next few years SA will see a powerful shift in the accounting industry as smaller firms and sole practitioners merge in order to remain compliant with legislation and also offer clients a better service.

 

“Cameron and Prentice as well as G.G. West & Company are confident and optimistic at the prospects of beginning a new era as a combined firm under the Cameron and Prentice banner, with all round benefits to staff and clients alike,” concludes Warneke.

 
 
 
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