Interview of PKF Brazil Partner in "International Accounting Bulletin"
17 out 2017
Published: 5 Oct 2017
Contributors from Brazil were asked three questions: What were the highlights/trends in your market last year? (i.e. important mergers, regulatory changes, economic situation etc.); What are the opportunities and challenges for accounting firms in the market?; What are the expectations for the future short/medium/long term?
By Cleverson Lacerda, international liaison partner, PKF Brazil
Over the past few years, in the quest for a global regulatory alignment, the Brazilian accounting and auditing environment has experienced major changes. This has created a scenario of important challenges in auditing and consulting firms’ operational methods, affecting professionals’ performance.
In a highly competitive market, the big auditing firms banded together in one single block, taking almost all of the business opportunities and forcing small- and medium-sized firms to seek alternatives to reinvent themselves and remain competitive.
Obviously, the economic and political crisis has affected important sectors such as oil and gas and civil construction, and has triggered a ripple effect in several other sectors. Consequently, auditing services have been directly affected, first of all by business stagnation, which was aggravated by the political and economic uncertainties prevailing in Brazil.
In this situation, the government has struggled to re-establish economic stability and regain investors’ and the market’s confidence in the Brazilian economy.
Despite all these challenges, the Brazilian auditing and consulting market is one of the biggest in Latin America. This is the reason why CVM – the Brazilian counterpart of the US Securities and Exchange Commission – IBRACON, the Brazilian Independent Auditors’ Institute, and CFC, the Federal Accounting Council, have endeavoured to regulate, inspect and foster the qualification of accounting and auditing professionals in Brazil. This participation of regulatory agencies is extremely important to the training of professionals and the profession’s upgrading and strengthening.
The new auditor’s report has been the main subject of discussion at professional forums, training programs and events since its adoption on 31 December 2016. This has been with a view not only to prepare professionals but also to make administrative councils and top companies’ management aware of auditors’ work.
We believe that, given the need to meet the new market requirements regarding disclosure of information and their impact on the business environment, this effort opens up a huge opportunity for the auditing and consulting market to support organisations and their activities as they endeavour for comply with regulations.
In a challenging environment, specialisation, quality control, distinctive servicing traits and attention to clients are indispensable characteristics of auditing firms. If they are to remain relevant, they should always be offering innovative solutions and specialised services for competitive prices, high technical skills and, above all, trained professionals with strategic knowledge of their clients’ markets.
In the face of such an increasingly complex and demanding scenario, firms have only two options: continue to do more of the same, with the risk of being forgotten by the market; or position themselves as the best option, by actively participating in this ever-changing market, improving the quality of their services and their professionals’ work and, most of all, generating value for the society and clients as an active economic growth agent, through their services. There are opportunities that only a crisis environment can make us think of taking.