(image credit : Grant Thornton}
Recently, in “When others Zig, you Zag“, I wrote :
“you can either choose to go with the market or go against the market. If you choose the latter, when others “zig”, you “zag”. The degree to which you choose to “zag” though, is very important. You can go slightly away from what everyone else is doing, or you can go radically away.”
On 29th March, Grant Thornton, the fifth largest accountancy firm in the UK, chose to “zag” in a major way, announcing :
“At Grant Thornton UK we do audit well and with scale. We are a market leader in public sector audit and one of the biggest auditors in AIM. We also work with a large number of FTSE 350 businesses on non-audit advisory work, so have credentials and experience working with large corporates across multiple sectors. Despite this, we only serve a small number of statutory audit clients in the FTSE 350 and it continues to be extremely difficult to penetrate this market in its current form.
As a result, we have taken the strategic decision to move away from tendering for statutory audit work in the FTSE 350, until we see a shift in the competitive landscape that would level the playing field for competing in this market.“
As the young auditor who shared this with me noted: “in the accounting sector game of chess, GT just moved to checkmate”. Or, as he might have said… Boom!
As reported in the related article that day in Accountancy Daily:
“Despite reforms to the system of audit tendering introduced by both the EU and UK, including the introduction of mandatory audit tendering after ten years, the Big Four share of FTSE 350 audits has gone up from 95% to 98% in the past five years.
Sacha Romanovitch, Grant Thornton chief executive, told the Financial Times that the ‘space is dominated by four players and there does not seem to be the market appetite to change’.”
So, the chess board is and has always been heavily stacked against any of the players outside the “Big 4”, so the CEO of GT has decided not to play by their rules. Nice chess move, Ms. Romanovitch!