The Danish Audit Company Soap Opera Continues...
E&Y in Denmark was on the verge of being destroyed, the local partners then formed what is interpreted by most as an unholy alliance with KPMG's local Danish branch. Did E&Y manage to attract more than what it had lost? Is the price for survival too high? Has the natural balance and the pecking order in the audit field resorted? Was the merger with the arch enemy the only option? Have the audit companies actually understood what Corporate Governance, Ethics and Compliance is all about? These and other entertaining questions will be in focus in the next newsletter.
Traditionally the audit world has, in many ways an extremely simple global auditing framework, even though the global companies could be quite complex in their auditing requirements. The current soap opera provided by the local KPMG offices and EY International proves that the simplicity and complexity go hand in hand.
First you have The Big Four (Deloitte, PwC, EY and KPMG) and then all the other audit companies. The big 4 first enjoys the delicacies and swallows all the goodies on the inspectors plate and leaves the leftovers to the second and third tier audit companies.
Enter push and shove
The second and third tier audit companies can on the other hand have a nice and handy local business and are generally satisfied with the menu.
However when the billions need to be counted and shared amongst the partners by the top of the global audit and business world in the future, the second and third tier audit companies will not quit and leave the stakes and the stage to the Big Four. The preceding scenario is fast changing ... For months, the Danish corporate world is being entertained by the bean counter soap opera, when EY International offered to buy the Danish pastry KPMG and the local partners decided to merge locally.
Then comes the other audit giants Deloitte, PwC and the second level audit companies on the scene and galvanize into action. The other two get in the assessment mode and start to swing. They will not willingly allow the mutual shifts in size and prestige (read; audit fees). The game called Who has the biggest and most prestigious customers, and who can attract the greatest stock-listed stars? has now begun.
We have followed the audit circus rather closely and will provide a detailed account in the coming newsletters...
