Posts

Partner PHOTO

Clive Owen LLP named top financial advisor in North East

Clive Owen LLP, which has an office in York, is celebrating after being named the top financial adviser in the North East.

The team at Clive Owen Corporate Finance has topped the financial volume table following the publication of Experian’s annual UK and Republic of Ireland mergers and acquisitions (M&A) report.

Based on its business research, Experian’s league table shows Clive Owen LLP ranking at number one in the region having advised on 19 M&A transactions in 2018.

In addition to the regional M&A transactions included in the report, Clive Owen Corporate Finance also completed a further five transactions nationally, including some high-profile deals involving private equity firms and multi-national PLCs. The report states that the North East has had one of the best years on record for M&A activity, with “292 announced deals worth over £3.2bn, representing a 27 per cent and 51 per cent increase in volume and value respectively when compared to 2017.”

Clive Owen LLP specialises in corporate and commercial clients and has offices in Darlington and Durham as well as York.

Angus Allan, Corporate Finance Partner at Clive Owen LLP, said: “We are delighted to see Clive Owen LLP named top financial adviser in the North East, thanks to the hard work and success of our teams in Darlington, Durham and York.”

Meanwhile, a financial expert from Clive Owen LLP has been appointed as board director for the York Professionals.

Jonathan Doyle, a senior manager at the firm’s York office, brings a wealth of experience to the board.

After joining the firm in 2010, Jonathan now advises a broad spectrum of clients and owner managed businesses on year end accounts preparation, management accounts, tax planning and audit services. York Professionals represents the city’s professional services economy in the business support, creative and digital, finance, legal, marketing, people and property sectors.

SC PHOTO

Accountancy firm celebrates 12 deals of Christmas

The East Midlands office of accountancy firm Mazars says it has advised on 12 deals in the run up to Christmas.

The team says it is seeing resilience across the board at entrepreneurial business, acquisitive corporates, banks and private equity investors, despite economic uncertainty.

Mazars Deal Advisory has hired Tom Boss and Jacob Staten in a move which it says reflects the “sustained demand for high quality business advice” in both M&A and due diligence.

The sale of £20m turnover Premier Workplace Services to Hong Kong-based Crown Worldwide took Mazars’ deal completion tally over the last three months to twelve.

Paul Pownall – M&A senior manager – said “Whilst it’s impossible to avoid the ‘B-word’ in the press, the sentiment towards doing deals remains positive, as businesses seek to capitalise on the economic environment.”

Mazars Deal Advisory partner Julian Clough, said “Activity levels are strong; acquisitive corporates have been particularly busy as opportunities emerge to consolidate in fast moving markets. We see this as a continuing trend and feel well positioned to advise clients – new and old – moving into 2019.”

ACC PHOTO

7 facts that are interesting to know about the future of accounting

Accounting, much like any industry, has seen its fair share of changes. It has proven to be a very challenging one too, but if you have a knack and drive for it then it might just turn out to be a really lucrative one.

People who are already in accounting or are planning to jump into it as a career, often think about the future of the industry and what will happen to it with the rapid technological development and automation being rolled. To answer that question and more, here are 7 interesting facts about the future of accounting.

1. You will not lose your job to technology

Yes, while we all harbour a small fear that we might just have to give up our work desk to a shiny robot, it is highly unlikely that an accountant will be replaced by a robot. However, with the advancements being made in artificial intelligence and enterprise resource software, you will be at the helm while the technology helps you do a better job.

2. The industry will keep thriving

With every day that passes entrepreneurship becomes increasingly popular which makes way for more and more start-ups to surface and eventually grow into companies. These very companies then seek out services in administrative procedures as well as financial ones which means accounting will never go out of business. Now is a time as good as any to be an accountant.

3. The more you are qualified the more you will grow

If you manage to get a master’s degree in accounting then you can rest assured that you will experience a career with a lot of room for salary growth. The extra time and money that you will invest in getting yourself a master’s degree will pay off twofold for you and more. So, take pass your official CPA exam as soon as you can and venture beyond that.

4. Having a specialty is sought out

It is true that hybrid careers have become the most sought-after ones such as people who have a degree in engineering as well as law or candidates who have a degree in finance and law as well. For accounting, however, if you can find yourself a niche and become an expert in it then you will be able to stick around in the industry for the long run. Try to take as many relevant courses as you can to grow your expertise.

5. International opportunities are abundant

With companies branching out and exploring new waters overseas, they send their delegates to form fronts and setups abroad. The core teams that go along include accountants so that they can cater to the corporation or enterprise away from home and it keeps it running as efficiently as they can.

6. There will always be opportunities in teaching

As future accountants enrol themselves for education in this domain, they will seek out business and finance schools to enable and provide them with the knowledge and the tools that they need. This is will be a cycle that will continue to go forever so you can try your hand in the field and in the classroom as well. Both experiences will benefit from the other.

7. Implications for Research

Accounting firms are conducting researches on the side as well to see the feasibility of new and upcoming technologies and the new kinds of frauds that come with those. Therefore, accountants with knowledge of digital technologies will help front the research endeavours which the entire industry will benefit from.

QG PHOTO

Former directors face questioning over Carillion’s collapse

The Insolvency Service is to start interviewing former directors of the collapsed government contractor Carillion as it steps up an investigation into one of the biggest corporate failures in recent British history.

Nearly seven months after Carillion entered liquidation, the government agency said it had finished transferring 278 contracts to new suppliers as part of a painstaking process designed to ensure smooth continuity of public services.

Officials are now expected to devote more time to an investigation into why the company failed, including a closer examination of the role played by former directors, who were branded “delusional” by MPs earlier this year.

The service has the power to disqualify people from serving as company directors for up to 15 years if it finds them guilty of misconduct and can pass information to criminal enforcement bodies in the most serious cases.

Earlier this year, the business secretary, Greg Clark, called on the government agency, which has 1,700 staff, to fast-track its investigation.

But while officials are understood to have been in contact with directors, who were accused of “recklessness, hubris and greed” in a report by MPs, they are yet to be interviewed.

The government’s official receiver, Dave Chapman, is expected to start the interview process in the coming weeks following the completion of the transfer of public and private sector contracts.

In a statement, the Insolvency Service said Chapman had “wide-ranging powers to obtain information, material and explanations”.

The inquiry will run alongside two parallel investigations into Carillion’s failure, which is likely to cost the government at least £150m due to the expense of hiring a team from the accountancy company PricewaterhouseCoopers to help manage its liquidation.

The Financial Conduct Authority is looking into allegations of insider trading, while the Financial Reporting Council (FRC) is examining the role played by its auditor, KPMG, and the former finance directors Zafar Khan and Richard Adam.

The Insolvency Service is turning its attention to the directors after completing the “trading phase” of the liquidation, which involved finding new companies to take on contracts for public services such as cleaning hospitals, serving school dinners, and road and rail projects.

A further 429 jobs have been rescued, taking the number saved since Carillion’s collapse to 13,945 – more than three-quarters of the company’s pre-liquidation workforce.

The number of redundancies has reached 2,787, while 1,272 have retired or found work elsewhere, the Insolvency Service said.

A further 240, mainly in Carillion’s former head office in Wolverhampton, have been retained by the Insolvency Service to help wind down its remaining activities.

Chapman said: “Carillion is the largest ever trading liquidation in the UK.

“The continued uninterrupted delivery of essential public service since the company’s collapse in January reflects the significant effort put in by its employees, supported by my team and those employed by the special managers [PwC].”

He said the Insolvency Service was still overseeing the transition of “limited” services to some suppliers and would also work with suppliers who have continued to provide goods and services during the liquidation to make sure they get paid.

“My investigation into the cause of the company’s failure, including the conduct of its directors, is also under way,” he said.

Carillion’s failure in January led to widespread recriminations, with former directors, regulators and the government all facing criticism over a company that managed huge construction projects and provided government services.

CF PHOTO

Why annual cash flow forecasting is advisory gold

An essential but underdone advisory service that CPA’s should be considering is cash flow forecasting.

Why? It’s high value to the customer and after all, we all know that without liquidity, businesses wither and die and should be high-value to the accountant too in terms of fees and potential follow-on work.

Every annual financial cycle is an opportunity to sit down and set goals and project numbers forward with your significant clients. Looking forward is not only important, but often essential to identify and avoid any looming business issues or, more positively, for identifying new opportunities too.

This work was a key part of my own advisory practice growth and could be for yours too. My basic proposition to the accounting industry is that every business client deserves a cash flow forecast.

Every business client deserves an understanding of cash and liquidity for better decision-making – and your care and attention as a trusted advisor to “make it happen.” So don’t wait to be asked for help by a client in cash flow trouble or reactively when the bank needs some projections – start thinking now about what cash flow-related services you could offer.

Annual Cash Flow Forecasting

This is the single most obvious and useful accounting output. It should also be the most profitable and valuable service, if done efficiently and sold with a ‘value-based’ mindset.

Forecasting doesn’t have to be a big annual exercise, although a new trading year is a natural starting point. Periodic or ‘rolling’ forecasting – bringing in actuals and extending out the future view based on latest data and expectations – keeps the information fresh and relevant for good decision-making.

Scenario Planning

Scenario planning can you to easily create multiple scenarios from your initial budget. The power of this is that you can test various theories or ‘what if?’ scenarios for your clients; this is gold!

As an advisor, you and your clients will face many opportunities or obstacles to consider, plan for and/or mitigate. With a budget and cash flow forecast locked in, running scenarios, pricing changes, new revenue lines and margin improvements are easy and illuminating.

Cash Flow Management

Short-term cash flow management is the really low-hanging fruit service. Having a 90-day view of inflows and outflows gives the client some ability to micro-manage for cash flow positivity.

Pricing & Debtor Process Reviews

An often overlooked opportunity is to advise clients on their pricing model and Terms. These two areas, which encompass what and how they charge, what margins are achievable, how they bundle and promote and what expectations they set with their customers are fruitful areas to explore, advise and take action on.

Debt & Capital Reviews

Most businesses carry debt, have capital requirements and/or have material Balance Sheet items that impact on cash flow now and into the future. These can be forgotten if there is too much focus purely on trading cash inflows and outflows. Key areas of advisor focus can be the ‘right-sizing’ of existing loans, management of shareholder drawings, and future capital or investment requirements.

Final Thoughts

My hope is that accounting firms will embrace cash flow forecasting and budgeting work as a standard service for clients of substance, capturing value for themselves and their clients. Competitive advantage will accrue for those that make the ‘cash advisory’ move.

Carillion PHOTO

Carillion’s demise spurs call for action against Big Four

MPs have said the stranglehold of the big four accountancy firms on the audit market needs to be broken.

Business and Work and Pensions Committees. say the competition regulator should look at breaking them up to prevent another situation like Carillion which collapsed months after accountants KPMG signed off its books.

But what impact might such a massive shake up have?

What have MPs proposed?

The committees want the government to refer the accountancy market to the competition regulator to investigate two possibilities. The first is breaking up KPMG, Deloitte, EY and PwC into smaller companies.

The second possibility is that the big four “detach” the audit part of the business which checks companies’ books, from consultancy part that offers advice.

The committees say this is needed because there is an inherent conflict of interest in having the two under one roof.

An auditing firm has an incentive to not highlight problems at a firm it is extracting juicy consultancy fees from. Non-audit work now makes up £4 in every £5 of fees for the big four.

Why have MPs proposed this?

The committees put forward the first, more radical, proposition because they say there is not enough competition in the audit market. The four firms sign off the accounts of 97 per cent of the UK’s 350 largest listed companies.

Firms over a certain size have to be audited and the largest of those companies have little choice but to employ one of the big four accountants to carry it out. No other accountancy firms have the manpower and other resources to be able to do the job.

This often results in “cozy” relationships like the one between Carillion and KPMG, which had audited the collapsed construction firm’s accounts for 19 years and failed to highlight serious problems.

What would happen if they are split up into smaller firms?

One possibility is that two or more smaller accountancy firms jointly audit large companies. France has this system and it has helped maintain a more competitive market than in the UK. The accountants produce a joint audit report and cross-check each others work, potentially making it more reliable. Both firms are then liable for the contents of the report.

Andrew Oury, partner at law and accounting firm Oury Clark says there “is some truth that ‘size matters’ but the cosy relationship needs disrupting”.

“Part of the solution could be an independent appointment from a wider pool of auditors for public interest entities – however those are defined.”

What would happen if audit and consultancy departments were split?

Accountancy firms would need to think of a new business model. Lower-level staff at the big four firms currently carry out a large volume of audit work. The job is inherently boring but the bargain is that new recruits slog their way through and eventually work their way up to more interesting and lucrative work. They also get their fees paid for professional exams.

If audit had to be hived off into a separate company the job would arguably be less attractive to talented graduates. However, it would at least mean that the employees carrying out audits are doing so because they want to rather than as a stepping stone to something else.

The most obvious positive is that auditors would clearly be working for shareholders of companies they audit, not the managers of those companies. This is, of course, the role that auditors are supposed to have been playing all along.

Is this a good idea?

It certainly has a lot of support. The Carillion disaster is merely a particularly high-profile example among many cases of auditors apparently failing in their duties. Apart from the two committees of MPs, the head of the accountancy watchdog, the Financial Reporting Council, also said recently it was time to break up the big four.

Sacha Romanovitch, the chief executive of the fifth-largest accountancy, Grant Thornton, has called for the CMA needs to investigate the sector. His firm stopped bidding to audit FTSE 350 companies recently, saying it was too expensive to do so.