Independent accountancy facing downsizing issues

News Article - 27 February 2007
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A section of the accountancy profession is facing problems as a trend towards downsizing becomes apparent, a study has shown.

Some 72 per cent of independent practices within the mid-size accountancy sector may lose their places within the market as management faces a number of issues, according to research by management advisors KATO Consultancy.

Some 74 per cent of respondents cited recruitment and staff retention as being among the problems they considered to be their main issues, saying they expected the situation to deteriorate further, Accountancy Magazine reports.

In addition, the study highlighted succession as being the main cause of the independent sector becoming smaller, with many managing partners also feeling that their businesses were not as successful commercially as they could be.

KATO director, Phil Shohet, said: "Many practices are struggling to achieve a reasonable financial return for the owners. In some instances this has meant that future investment in such things as marketing, IT and service line development has been sacrificed."

He added that he was in no doubt that many of the firms responding to the survey would not be in existence in five years' time.

Recently, recruitment firm Robert Walters told the Independent that many finance professionals were heading overseas for work, adding that there was "a notable lack of desire to stay in the corporate world".

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