Predatory pricing - what is being lost?

Article Abstract:

An increasing number of accounting firms are using pricing as a source of competitive advantage. To build market share, they are making deep cuts in the prices of their accounting and auditing services. On the surface, this practice of 'low-balling' seems beneficial to buyers of such services. However, on closer inspection, predatory pricing actually poses a serious threat to clients, accounting firms and the accounting profession. The practice is putting the integrity of the profession in question. Clients are starting to wonder if their accountants and auditors are acting on their best interest or are providing self-serving recommendations and advice. The value of the audit is lessened when its independence and effectiveness are placed in doubt. The accounting firms themselves suffer from low-balling if their partners begin to abandon their professional values and view audits only as selling opportunities.

Analysis, Management, Prices and rates, Professional fees, Price cutting

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All work and no profit, but endless potential

Article Abstract:

China offers enormous opportunities to Western accounting firms. The Big Six, namely, Price Waterhouse, Arthur Andersen, KPMG, Coopers & Lybrand Deloitte Touche Tohmatsu and Ernst & Young, already have 27 representative offices in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin and Dalian. There is strong demand for their services given that China, with a population of 1.2 billion, only has 57,772 practising Chinese CPAs. At the moment, Western firms are restricted to providing advise to multinational clients and Chinese companies seeking a stock exchange listing to raise capital. Another challenge for the firms is that they have yet to make a profit since they are usually paid only when there are substantial proceeds from a company listing. Nevertheless, it is believed that there is plenty of room for growth for both accounting firms and the accounting profession in China.

China

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Indian accounting aims for the world

Article Abstract:

India has no established set of rules that govern accounting practice. In the absence of formal generally accepted accounting principles, accounting conventions in the country have been based on the law, professional pronouncements and established practice. Standard-setting follows an 'associationist' approach, which means that professional organizations take responsibility for accounting regulation. The Institute of Chartered Accountants of India (ICAI) exerts the strongest influence on accounting practice, but it is also affected by pronouncements from the Dept of Company Affairs, the Income Tax Dept, the Securities and Exchange Board of India, and the Reserve Bank of India. Since the ICAI is a member of the International Accounting Standards Committee, Indian standards have many similarities with international accounting standards.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Accounting Services Regulation, Standards, India, Accounting law, Institute of Chartered Accountants of India

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