Continental Europe: the tough new frontier

A new report points up the opportunities - and dangers - of accountancy abroad. By Roger Trapp
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The Independent Online
The fall of the Berlin Wall, and with it the opening up of vast territories that previously few had even dreamt of entering, was a great boost to the UK accountancy profession. Just as the fast times of the mid-Eighties were beginning to run out of steam, along came a great new market.

As the dominant player in Western Europe, Britain was in pole position for setting up systems in countries that - because of the long sway of planned economies - hardly recognised modern accounting systems. The only problem was that, though there was a lot of work to be done, and a lot of people were dispatched to do it, there was not always a lot of money to pay for it. Accordingly, many leading accountancy inns were acting just as they advised clients not to: becoming fiendishly busy, with only a slight prospect of reward. Even Arthur Andersen admits that it got its sums wrong about Germany.

Yet, according to the Institute of Chartered Accountants, opportunity still beckons in Continental Europe. In one of the more positive aspects of the report Added-Value Professionals, Chartered Accountants in 2005 (published last week), it suggests that "the UK, as a service-based and very open economy, will benefit from such trends as the merging of the world's markets into a global marketplace, the shift eastwards of the world economy and the lowering of barriers to trade."

In particular, chartered accountants should gain from the opening up of "new business and career opportunities in the EU and around the world" by being "well placed to meet the demands for timely and relevant performance measurement systems covering much more than traditional information".

Not only will they need to act positively to take advantage of such opportunities, they will also find that there are a few threats around. Among the most notable, says the consultation document, is a trend for the largest international companies to seek further economies of scale by reducing the numbers of people - including internal accountants - in each territory.

And, while the growing internationalisation of European business is likely to give UK professional firms a lead, even they need to be aware that competition can - and increasingly does - come from any quarter. At present, competition between the six biggest accounting firms is intense. But in the years ahead, not only could that band be reduced to five or four, but the competition may also be some kind of general financial services company or communications organisation that has acquired some accounting or technological expertise.

Moreover, some of the work that the big firms rushed to do under the aegis of the European Union and other bodies will come home to haunt them; the young people that they so eagerly trained could head for Britain - as a result of the same sort of trends that are enabling UK folks easier access to far-flung parts of Europe. And, with large parts of the report given over to the ever-swelling numbers of accountants, and concern about feeding them all, that is no small point

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