Deloitte chief executive cool about accounting practice incorporation

By Graeme Hunt

Friday 28th July 2000

JIM COPELAND JNR: More mergers rather than fewer

Deloitte Touche Tohmatsu global chief executive Jim Copeland Jnr doesn't favour accounting practices incorporating but accepts the business logic for limiting partners' liability.

"It would be a shame in many respects to lose the partnership form," he said, "[but the] sense of responsibility among partners is difficult to replicate in corporate form but the limitation of liability is almost a survival necessity."

New York City-based Mr Copeland (55), who is also CEO of Deloitte & Touche in the US, said the future shape of the accounting profession would be influenced by the actions of US regulators, especially moves to limit firms from consulting to and auditing the same client.

This would determine the size of the Big Five as the separation of auditing and consulting could encourage more mergers rather than fewer.

Mr Copeland said he struggled to dissuade regulators from labelling auditing a loss-leader when the margin on auditing was better than that on consulting but he accepted there was pressure to drive audit fees down.

"I am not surprised by the pressure on audit fees and audit productivity. The whole world is competitive now.

"I don't buy the notion that because [auditing] is somewhat more competitive that it can't be profitable."

Mr Copeland said acquisition of law firms by accounting firms was a natural development for multidisciplinary practices and provided more efficient services to clients.

"What we are all involved in is providing solutions to very complex problems for clients and we do that in professional teams whether we are in the same firm or not."

Mr Copeland, in New Zealand briefly to see the local Deloitte operation, said he favoured the adoption of a global accounting standard but that could be a "10 to 20-year project."

"I would be happy if we could a common set of practices around the world."

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