There has been a drive to encourage the amalgamation of audit firms. For instance, there is legislation ensuring that sole practitioners cannot be appointed auditors of Public Interest Entities (Listed firms, Insurance Cos, Banks,deposit taking SACCOS etc). However, this hasn't had a great impact on amalgamation of audit firms. Most sole practitioners prefer to stay that way......I guess its due to their desire for control and lack of compatibility with others.
The situation got me thinking. Can auditors still remain as sole practitioners and yet reap from economies of scale? I turned to our doctors for inspiration. There has been a growth in medical centres.......where doctors have individual clinics housed in one building. There are shared services e.g. xrays department but each doctor maintains their own space.
Why cant small practitioners do the same? Is it workable? I think it is a great idea. In fact, its the foundation that the big audit firms have. Come to think of it, each partner has their own portfolio and the staff are shared resources. The partners have appropriate revenue/costs sharing mechanisms etc and they trade under a common brand name.
Why not ape the big firms in all except the common brand name?
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