CAs can 'make a fortune'

Cape Town - SA accountants can "make a fortune" from insolvency cases caused by a global recession - but only if they get in line with international standards, says an accounting expert.

Medium-sized accountancy firms will have to get in line with international reporting, auditing and diversifying practices if they are to survive a global recession and new accountancy laws, Clive Stevens, chairperson of Kreston International, said on Thursday.

Kreston International is an association of 236 medium-sized chartered accountancy firms in 93 countries, with a combined turnover of $1.7bn.

Delivering the keynote address at the 27th Kreston International conference of medium-sized accountancy firms from 93 countries, Stevens pointed out that accountancy firms and the legal fraternity would "make a fortune" from insolvency work expected to flow from the anticipated global recession.

Recession 'sure to hit clients'

He told the conference that chartered accountants worldwide would be fairly insulated against the anticipated global recession which was "sure to hit them and their clients", provided they diversified and started to include value-added services.

"With the Credit Act and market turmoil, there is an increasing need for financial advisory services and firms should maintain a client-base across different sectors as the one sector balances out the other."

He told Fin24.com in an interview that the world's banking, property and the retail sectors would be worst hit by the markets fiasco, the impact of which would be felt as early as Christmas.

Dave Rich, the CEO of multi-disciplinary accountancy firm (and sole SA member of Kreston International) MD Accounting and Auditing, said at the conference that the weak rand gave rise to significant competitive advantages. These include outsourcing and investment opportunities that overseas firms could use to their advantage and that of their clients.

"Chartered accountants in South Africa are contracted at about £70 per hour, while the international rate is in the order of £150 to £200. With the internet and the fact that SA falls in the real time zone with many overseas countries, it becomes very attractive for those businesses to consider South Africa as a preferred financial services provider."

Citing the example of US accountants CBIZ also being the biggest US insurance broker and 30% of its business coming from financial services, Rich said once the Companies Bill becomes law in South Africa and the need for an audit function for unlisted companies falls away, local firms would need to adopt a "new mindset of value-added services" to survive and grow.

He said South Africa offered opportunities for venture capital in manufacturing, call centres, medical services and other outsourcing, tourism - of which 30% of capital invested is returned by a government incentive scheme - and any business that created employment.

"SA is a high-risk, high-reward destination for venture capital," Rich said.

- Fin24.com