Accounting firms adjust to evolving standards
Accounting firms in Poland have to step up the level of services they offer as the economy slows and clients look for ways to cut back on expenses, according to some company executives. But while increasing business is a challenge, company executives remain optimistic.
"The accounting industry is a varied and fragmented one," said Nicholas Fielding, managing director of Contract Administration. "Generalization about trends is difficult. Poland is going through a period of adjustment when growth is a challenge. Some parts of our accounting business I would say are doing well at the moment."
Others echoed the upbeat note. "The industry is in great shape," said Peter Driscoll, president of Pricewaterhouse Coopers, Poland's biggest international accounting firm and chairman of the Association of Private Employers in Consulting. "However, when the economy slows, companies tend to spend less on consultants. Like training and advertising, consultants' fees are often seen as an item that can be easily cut or deferred. So, consultants need to be flexible and ensure that companies appreciate the value their services can bring."
Those challenges include keeping up with the evolving economy in Poland, as well as finding talented employees. Several firms have noted a trend toward fewer expatriates and more Polish workers filling top-level positions, especially following a training stint abroad.
"After 10 years you would expect some of the locals to be able to take relatively senior positions," said Andrzej Kinast, managing partner at Grant Thornton. "More and more locals are moving up."
But competition for the most-qualified professionals remains tight, he said.
"In the profession there initially was a feeling that firms would quickly move to be staffed by locals," Kinast said. "That is not the reality. The best staff gets poached by clients. And of the major firms, practically all of them are still run by expatriate managing partners."
Accounting firms are able to keep good employees on board, he said, but client firms often have difficulty recruiting good staff at the middle-management level.
Polish accounting regulations present another challenge to the industry. Laws instituted in 1994 were widely viewed as inadequate and out of step with international standards. New regulations approved last year are a step in the right direction but not all accountants are satisfied.
"Our biggest regret and difficulty is that the Finance Ministry failed to recognize they were not in a position to develop professional standards," Kinast said. "Yet last year they did not adopt international accounting standards ... and today the Polish accounting law covers 20-30 pages. International standards are covered in a 400+-page tome."
"We are disconnected with accounting standards," said Michel Kiviatkowski, a managing partner at Mazars Group. "It is easier now to work with international standards."
But Poland is moving closer, he said. "Polish law was a little bit late regarding this objective," he added.
Principles are set out in the 1994 Polish Accountancy Act, which also requires conformity with European Union directives, according to the U.K.-based International Accounting Standards Board.
Regardless of the standards, maintaining quality work remains the priority for firms, company officials agreed.
"I think the accounting sector is in the process of consolidation but there is a great danger of the profession being brought into disrepute, especially at the lower end," Kinast said. "We are beginning to see signals in the quality of information and audited financial statements prepared by small local firms."
But multinational companies should have no problem finding good services from competitive firms.
"In my opinion there are now many firms in Poland able to offer a very high level of service against any standard," Fielding said. "Some are wholly Polish owned, some are parts of international organizations. All are staffed predominantly by local professionals. Warsaw in particular is now a sophisticated Western city from the point of view of financial services. And poor quality work doesn't sell."
