Picture: iSTOCK
Picture: iSTOCK

London — Accountant Grant Thornton earned record revenues from its focus on mid-market clients in 2018 but expressed caution on Wednesday about the time it will take to overhaul auditing in Britain.

“We have looked into where growth will come from in the world in future and we see that it’s going to be very strong growth in the dynamic mid-market. We think that is the core market where we want to focus,” Peter Bodin, CEO of Grant Thornton International told Reuters.

Grant Thornton’s record year came despite Britain’s accounting regulator deciding to investigate its audit of the financial statements of the owner of British café chain Patisserie Valerie.

The auditing firm said a combination of strong markets and acquisitions in Japan and SA lifted revenues by 9.4% to $5.45bn in its financial year ending September 30 2018, its highest rate of growth in six years.

“There was strong growth in the mid-market in every sector as a lot of clients go global and need help to change their business models,” Bodin said. He also cast doubt over British plans to get firms like Grant Thornton and its rivals, such as BDO, to prise open the top end of the audit market to increase choice and quality.

He said it would need “quite a long time” to involve all stakeholders to push through reform of the British market, and in the meantime Grant Thornton would focus on its mid-market global strategy.

Britain’s Competition and Markets Authority (CMA) proposed reforms last month to loosen the grip of the “Big Four” accounting firms Deloitte, PwC, EY and KPMG, which check the books of most top-listed firms in Britain.

The CMA also proposed forcing the top 350 listed companies to have joint audits, which would mean companies hiring two auditors, with Grant Thornton, BDO and others working alongside one of the Big Four.

Auditing a big international firm requires more partners and investment in technology, putting smaller accountants with fewer resources at a disadvantage.

PwC and Deloitte both have annual revenues of more than $40bn, enabling PwC to invest $1bn in cloud computing alone by this year.

There has been some consolidation among the mid-sized auditors, with BDO set to leapfrog Grant Thornton by merging with Moore Stephens, although Bodin said this would not put pressure on his firm to find more partners.