The merger of Mazars’s US business with accounting firm Forvis last November created a global audit and advisory network with annual sales of around US$5bn. The move underscored the growth that leading international accounting networks have experienced over the past few years, despite broader economic headwinds and geopolitical uncertainties.
The top 27 networks collectively generated about US$253bn in fee income in 2022, while the top 21 international associations and alliances grew a solid 6.8%. Belonging to an extensive network provides firms with stability and opportunities for steady performance, even in turbulent times.
‘A network offers access to shared resources, fosters collaborative learning and enhances credibility’
Economies of scale
The first accounting networks emerged to meet a specific regulatory need from the US Securities and Exchange Commission: public US companies were required to obtain audited financial statements. Membership in these professional affiliations also fosters economies of scale that benefit both organisations and clients; spreading costs across a large group allows individual firms to competitively price high-quality services worldwide.
Firms have continued to grapple with persistent talent and skills gaps, according to the annual Rosenberg Survey of the accounting and tax industry. Many practices still experience staffing shortages and pronounced deficits in needed skills, even as profits grow faster than revenue.
The 2023 Wolters Kluwer accounting industry survey found that attracting and retaining talent was a significant issue for 57% of firms in South-East Asia, while 62% of South-East Asian firms also cited price competition as a major challenge.
‘Being part of a network is a necessity for capitalising on increased international opportunities’
A closer look by the International Accounting Bulletin showed much of the movement to smaller networks like Baker Tilly and BDO involved expansions into emerging markets such as Vietnam, Thailand and Turkey.
Still, the Big Four remain dominant, accounting for nearly 75% of the total network fees in 2022.
Rick Chan FCCA, Mazars’ head of audit and assurance for Asia Pacific, says that joining an accounting network provides small-to-medium firms with myriad advantages.
‘It offers access to shared resources, fosters collaborative learning, enhances credibility and delivers cost savings through infrastructure and services shared across the network,’ he explains.
Digital game-changer
Digital collaboration has become a game-changer by enabling firms to seamlessly connect with global clients, according to Chan. Technological advances have significantly streamlined market expansion for small-to-medium accounting practices.
‘In today’s technology-driven, globalised business environment, being part of a network is no longer just a preference, but a necessity for capitalising on the increased opportunities to serve international clients,’ Chan says. ‘With innovations like cloud-based accounting software and artificial intelligence-powered tools, the growth potential is limitless.’
‘The obvious advantage is widening both the scope and locations of service’
Forvis Mazars, the new network to be created through Forvis and Mazars’ US business merger, will establish Mazars as a significant player in the US, where Forvis currently ranks among the top 10 firms, Chan says. Designed for agility with just two founding members, the network aims to provide global scale and meet clients’ needs.
Pathway to growth
BDO Hong Kong’s managing director Clement Chan says that small-to-medium accounting firms have successfully expanded beyond regional boundaries by teaming up with global networks. This proven pathway to new markets has enabled geographic growth, he explains.
‘The obvious advantage is widening both the scope and locations of service capacity by geographically extending the network of affiliated firms,’ he says. Firms can also leverage their brands through the larger umbrella organisation by networking with affiliated practices worldwide.
‘Small-to-medium accounting firms within a network can elevate their brand by spotlighting their specialised expertise, actively participating in network events and leveraging digital platforms for enhanced visibility,’ adds Rick Chan. ‘It’s crucial for these firms to position themselves as robust local entities with global reach and capabilities.’
‘The allure of overseas secondment acts as a major incentive for recruiting and keeping top-tier talent’
While specific strategies may vary, aligning with network values and proactive participation in collaborative opportunities will undoubtedly bolster overall brand recognition, he adds. As part of the new global network, Forvis Mazars aims to maintain its agility, scale and worldwide coverage to meet evolving needs.
Career advancement
Quality staff are also crucial to any firm’s long-term success. Membership in a larger network presents significantly better prospects for career advancement through promotions and transfers, says Clement Chan.
Meanwhile Rick Chan is optimistic that the new Forvis Mazars network will further extend benefits and enhance the overall attractiveness of its member firms.
‘Being part of an accounting network has proven highly effective for attracting promising leaders and young professionals seeking international exposure,’ he says. ‘The allure of overseas secondment within alliances acts as a major incentive for recruiting and keeping top-tier talent.’
More information
Visit ACCA’s Practice connect hub for resources to support small and medium practices
