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Jim Mulqueen, managing partner of
RSM Farrell Grant Sparks, describes
trading conditions in 2011 as tough. He
explains: “While all service lines showed
some degree of uplift, corporate recovery
and insolvency continued its strong
growth performance. We were pleased
with some significant business wins during
2011 and are projecting top and bottom
line growth for 2012, although we feel that
any gains will be hard won in current
market conditions.”
The firm restructured its service
offerings a few years ago, with a significant
investment in the corporate recovery
team. “Our audit business has also grown
in volume terms in the past year and there
was a reasonable pick-up in corporate
finance activity in the second half of last
year,” says Mulqueen. He adds that price is
always a key factor in winning new work
that is put out to tender. “However it is
important for clients to understand that
quality of service can be adversely affected
below a certain fee level,” he says.
“At another level, the market can be very
uncompetitive, particularly with respect to
audit quotes, as some firms are inclined to
significantly undercut to maintain existing
clients or win new key ones. That is fine so
long as this is not being done with a view
to being in the frame for other consulting
fees from the same clients, as this can lead
to significant audit independence issues.
We would prefer to see more transparency
in this area and we welcome the recent EU
Commission’s proposals which seek to
address this issue.”
Derry Gray, managing partner of BDO,
describes trading through 2011 as
relatively flat, though he expects business
to increase in 2012. “We are investing in
areas that are growing, such as insolvency
and internal audit, outsourcing and
consulting,” says Gray. “We have seen a
surge in demand for outsourcing and
payroll services, specifically when linked
to FDI investment in Ireland. Other areas
of note would be consulting and work-out
solutions.”
In Gray’s opinion, one of the
consequences of the recession is that
there are too many accountancy firms
competing for too little work. “The
market remains extremely competitive
and the pool of potential clients is
significantly reduced from four or five
years ago,” he says. “I believe that the
sector requires a level of merger and
consolidation activity over the coming
years to right-size the industry. Fee
pressure is a huge issue within the
profession. There is a twofold effect from
this pressure on firms: some are unable to
maintain employment levels, while others
are unable to offer as many opportunities
as before to new entrants.”
However, Gray says BDO is continuing
to hire graduates. “Our manpower
structure and planning requires an annual
intake of trainee accountants and tax
trainees. So despite the economic
downturn, over recent years we have
continued to recruit. Our numbers were
slightly reduced in 2009 and 2010, but in