BDO chooses blogging partner to head up international network

Jeremy Newman of BDO Stoy Hayward in the UK is a trailblazer as a managing partner who blogs regularly, primarily about the audit market in the UK. He’s recently won the job to be BDO International’s new CEO starting in October 2008.

Jeremy has been emphatic about getting the message out about audit choice and pushing BDO further into the market for large public company work.

A post he made about trusting people not to waste time on Facebook while at work, and being against the trend to ban it in workplaces, was quoted by yours truly in a post I made a short while ago that caused partners in my office sit up and take notice.

I wonder when others high up in accounting firms will join Jeremy and make blogging part of their regular routine. Communication skills are going to be key to his success in the new role, but judging by his blog, BDO will be in good hands.


Banning Facebook sends the wrong message

Facebook office signJeremy Newman, the Managing Director of BDO Stoy Hayward in the UK, provides real leadership and an inspiration across the pond to me and no doubt others who read about his management style and philosophy. He writes about workplaces banning Facebook, which is very popular right now here in Toronto among employers.

I am not sure how effective this will be at increasing staff productivity – which is presumably the intended effect. To be consistent I guess they also need to ban personal telephone calls and emails during office hours. Personally I prefer to trust people.

That’s a breath of fresh air coming from someone in his position. I would expect the employees of Stoy Hayward appreciate being treated like responsible adults. From the comments, by “russell”:

Rather than banning things companies should look to understand what makes it such a powerful medium and explore opportunities to engage with employees through such social networking sites.

He’s on the mark with the sentiment, which some businesses have already taken to heart. Especially in the profession, where potential employees are already users, keen on new technology, especially when it helps them meet people and build relationships, and looking for something to differentiate between what are essentially different flavours of vanilla.

Banning any site sends existing employees the wrong message, and failing to leverage the social network will hinder the growth of the firm when it comes to attracting the top young minds entering the profession.


Audit choice and competition in UK and G8

Jeremy Newman of BDO Stoy Hayward, highlights a key finding of the British Oxera Report on Audit Choice and Competition:

According to the report by Oxera on Competition and Choice published in April 2006 more than 70% of FTSE 100 companies had not held a competitive tender for the last 15 years. The incidence of companies switching auditors is even less frequent. According to the Oxera Report it is around 4% on average for listed companies and less than 3% for FTSE 350 companies.

It’s not just a problem in the UK, however. Grant Thornton researched the global audit market:

The levels of audit market concentration across the world’s eight largest economies are dangerously high, with the Big 4 firms responsible for up to 99% of large public company audits, according to research by leading accounting and business advisory firm Grant Thornton LLP in the UK. […] Analysis of auditor concentration among the G8 economies revealed a high of 99% in Italy, followed by the UK (98%), the US (97%), Canada (96%) and Russia (90%).

That, after Grant Thornton’s US boss issues a call for a study to be performed on the US audit market. Not sure what a study of the US market would reveal since the above quote references a 97% concentration of Big 4 firms on public company audits already. Clearly there is a problem.

Investors and businesses are not being well served by the current situation. I hate to advocate increased intervention by governments of any kind, but it’s clear that public company audit committees also hate to advocate for shareholders’ best interests in terms of rotating audit firms and/or partners.

Maybe the solution is increased coverage of public companies that switched their audit to a non Big 4 firm. I would love to hear from any company in Canada that made the switch and is happier and better served for it.


Grant Thornton UK merges with RSM Robson Rhodes

Although they’re possibly (likely?) completely unrelated, the recent announcement in the UK that Grant Thornton would merge with RSM Robson Rhodes comes hot on the heels of the announcement in Canada that BDO Dunwoody and Grant Thornton here would enter into discussions on the possibility of merging.

The partners of Grant Thornton UK LLP and RSM Robson Rhodes LLP have today announced their agreement to merge the two firms to create one of the strongest accounting and business advisory groups in the UK.

The UK merger is a done deal according to each party, whereas in Canada BDO and GT are only engaging in talks to see if they’d like to buddy up. Still, one can’t help but think the trend of mergers could continue in other countries, possibly even the US. And if BDO and GT do not merge in Canada, is RSM Richter next on the call list for either?

Some commentary in the UK has been towards the perceived reaction to the merger by BDO Stoy Hayward, whose managing partner Jeremy Newman blogs regularly. Damian Wild of AccountancyAge practices his creative writing skills:

It will, however, have caused a few BDO Stoy Hayward partners to choke on their cornflakes on reading the news in yesterday’s Sunday Telegraph and Sunday Times. Certainly it is a blow to [Newman’s] ambitions as it puts increased distance between [Grant Thornton and BDO].

Newman himself has a different, more nuanced, take on the merger:

Whilst clearly there are some advantages to being larger we are confident that we already have sufficient scale and expertise to handle the audit of all except the largest UK companies. Ultimately it’s the quality of your people and the resultant quality of audits and client service that matter. This is why we have invested heavily in recent years to ensure we have high quality, motivated people and will continue to do so.

Doesn’t sound to me like he’s choking on much at all. Nor should he be – it isn’t size that’s going to break the Big 4. Newman is on the right track with his blog and his campaign to bring Finance Directors around to the idea that a non-Big 4 firm can handle the challenge of a large public company audit.

It’s all about attracting and retained quality people with the skills and talent to conduct quality audits for companies large, medium, and small, and Newman recognizes this.

Accounting Blogs

Blogs catching on for BDO in the UK

This is cool: BDO Stoy Hayward‘s Managing Partner Jeremy Newman has a blog.

It’s no surprise he was voted Accountancy Age’s Personality of the Year – this guy is switched on. I think it goes without saying – and it’s a constant theme for my fellow accountant bloggers – that we need more folks at the top catching the blogging fever.

My comments echo those of Dennis Howlett, made last week when a journalist at the British Accountancy Age shone the spotlight on Newman’s blog.

BDO in the UK is sizzling these days. And with a Managing Partner this in tune with technology, it’s not hard to see why.