MGI Worldwide member firms from France and Germany join discussions on trends withing the accounting industry in a recent edition of the IAB
We’re always thrilled to read the contributions our members make to major publications like the International Accounting Bulletin. In November’s edition, we heard the thoughts and opinions of two of our member firms, from France and Germany.
Le Pacte Law (2019) impacts SMEs’ stance on auditing in France
Firms had feared a mass exodus of SME business from French accountancy firms after the introduction of Le Pacte Law. The Le Pacte law (2019) limited the audit activities in small businesses, which resulted in a lot of small accounting firms leaving the audit market. This has not been the case though. Firms are now working hard to expand the services they offer to keep SMEs on their books once they no longer need to be audited.
The IAB spoke to MGI Worldwide member Chloé Marques, Partner at FCN, who shared her thoughts on whether the Le Pacte law, which was designed to promote growth and simplify business processes in the SME sector, has benefited the accounting industry by allowing chartered accountants to extend their reach, making up for the loss of auditing revenue.
Chloé Marques
"Because of the COVID crisis, and now the energy crisis, it is difficult to measure the real impact of the law on the companies that are now exempt from legal auditing. However, there is a real risk of weakening of the level of economic security: with a huge part of the French economic fabric composed of SMEs (more than 99% of the French companies are SMEs), and the uncertainty generated by successive crises, the decrease of control from legal auditors on small businesses could have a tangible impact on financial security and global trust in our companies.”
German accounting firms become more client-facing
In 2020 Germany’s accounting profession was rocked by the Wildcard scandal. This led to a flurry of regulation that has had an adverse affect on German SME firms. The Government has moved quickly and passed the Financial Market Integrity Strengthening Act (FISG), which was considered a milestone for the accounting profession as it strengthens the auditor’s independence. But has it gone far enough? Or has it gone too far? This question was asked in the most recent edition of the IAB.
MGI Worldwide member Jan Schmeisky, Partner at Menold Bezler discusses the withdrawal of smaller audit firms from the market as a result of the act.
Jan Schmeisky
"Separating auditing and tax consulting does not necessarily lead to higher quality. The fact is that more and more small audit firms are withdrawing from traditional auditing and focusing on consulting topics. Wildcard was an isolated case. We should not draw conclusions about the market as a whole from this one case.
"We have the same challenges as many other colleagues worldwide in the MGI network. Fee pressure and client demands in the audit business in Germany remain very high. At the same time, we have challenges in recruiting and retention. We need highly qualified and motivated young people who see auditing as a meaningful activity. In the end, we are the ones who create confidence in the capital markets.”
To read the full articles in the November edition of the IAB, members can click here (login to the MGI Worldwide member area will be required).
Strong rankings continue
The most recent data has been published and we are thrilled to announce that our member firms are ranking highly against the other top accounting associations!
In France our member firms are ranking 16th for both fee income and for staff data. Our member firms in Germany are ranking 17th for fee income and are 15th for staff data. Member firms in Italy rank at the 18th position for both fee income and for staff data.
MGI Worldwide would like to congratulate our member firms in France, Germany and Italy, who are responsible for helping achieve these fantastic results.
For more information about our member firms in France and Germany
Visit the FCN website or firm profile.
Visit the Menold Bezler website or firm profile.
MGI Worldwide with CPAAI, is a top 20 ranked global accounting network and association with almost 9,000 professionals, accountants and tax experts in some 400 locations in over 100 countries around the world.