Kreston International’s Jon Lisby and MHM’s Rich Howard featured in Public Accounting Report
Kreston International’s Jon Lisby and Kreston member, MHM's Rich Howard featured in Public Accounting Report
Kreston International’s Jon Lisby and US member, MHM’s Rich Howard, were recently featured in a Public Accounting Report article titled "As Merger Deals Snowball Among Firms, Association Activity Adapts And Responds."
Rich and Jon discuss the impact the accounting profession’s mergers and aquisitions activity is having on international networks and associations.
The question was:
How is the current environment of merger activity among accounting firms affecting your association or network? What benefits and challenges do you see it posing to organisations such as yours?
"The intense merger activity we are seeing in the accounting industry has provided numerous positive benefits. We are seeing an increasing number of firms around the world looking to progress from looser accounting associations to more progressive networks. For example, the Bentleys Network in Australia recently joined Kreston. Bentleys was seeking a progressive network which shared the same culture and values.
As networks add firms and achieve growth, they are adding resources and capabilities, which in turn aids in branding, training, recruitment of specialists, increased visibility for the network and an increased ability to deliver consistent quality and levels of service across the globe because all firms in the network are operating with common methodologies and quality control processes. It also provides for broader coverage in markets where the networks may not currently have a strong presence. As a result, we have been able to strategically approach larger firms and local networks about joining. This process allowed us to recruit Exco France, a network of 23 independent firms, which is now our second-largest member by size.
There are also negative impacts and challenges of the merger activity. One network will always be on the losing end during an M&A deal. When two firms merge and each belongs to a different network, only one can prevail. Three of the key areas of impact in each M&A transaction as it affects the networks are independence, integration and quality.
At the end of the day, we must take the challenges along with the benefits. The activity is hopefully a sign of a renewed energy in the accounting profession, which we feel very positive about. Kreston and member firms’ ability to transition from association to network status, to promote quality through methodologies and monitoring, etc. has allowed Kreston to attract other high-quality firms throughout the world. This has been a change in strategy, as Kreston can now better target and identify larger firms and local networks of substance with similar culture and values. The advantage to member firms is the increased ability to compete in the global business environment. Between the focus on quality and the ability to share resources and technical expertise, member firms have gained strength in competing for transnational work."