And BDO makes five? Don’t count on it, says firm’s global chief
The global boss of professional services firm BDO had said it has no ambitions to join the ranks of the Big Four, as it aims for dominance of the mid-market across its operations.
The firm, Britain’s sixth-largest auditor, revealed its global fee income hit $8.99bn (£7.16bn) for the past year – a 10.7 per cent rise, led by strong revenue growth in Europe, the Middle East and Africa.
Keith Farlinger, its global chief executive officer, told City PM the firm was in a “war for talent” with its sector rivals, as its tries to leverage worldwide links to serve clients. It grew staffing levels 8.4 per cent to 80,087 people this year.
BDO’s British wing recently announced a planned merger with smaller challenger Moore Stephens, which is set to go ahead in spring and would create a new fifth-largest UK audit firm, leapfrogging Grant Thornton.
Auditing is currently subject to a series of reviews, including a competition watchdog investigation which is due to make a report on its initial findings before the end of the month.
Reform in the sector could come with big benefits for BDO, which has called for client market share cap which could see it grabbing a swathe of FTSE contracts.
Farlinger, who was previously boss of BDO Canada, said the reviews “could create a negative thing”, warning ongoing critical scrutiny of auditors could damage perceptions of the industry.
He said BDO was not looking to make itself grow to the scale of the Big Four – Deloitte, EY, KPMG and PwC.
“We’re not looking to be as big as, or take a seat at the table with the Big Four,” he said. “We view our market as slightly different, and I think actually they view us as slightly different as well.”
Farlinger described the firm’s partnership structure as “challenging”, but defended it and said it was not a barrier to the firm’s operations. He said it was likely BDO might look at further mergers with parts of Moore Stephens’ operations in the future, but said: “we’re not aggressively pursuing them”.