Relatively higher audit fees by the popular Big Four firms have pushed the majority of small businesses to procure the services of mid-sized accounting firms.
MGI Worldwide, an international network of independent accounting firms, says its members have increasingly been bagging businesses from subsidiaries of multinationals that are dissatisfied with the high fees set by KPMG, Deloitte, Ernst & Young and PwC.
Audrey Danasamy, the regional director for MGI Africa added that the auditing business to its members in Kenya and other African countries has further been boosted by the coronavirus-induced hardships that have forced companies to cut costs.
“Mid-sized accounting firms have been able to offer these firms the same support as the one they got from the Big Four. In fact, they (the multinationals) get more personalised service from our members who charge lower fees compared to the Big Four,” said Ms Danasamy.
Ms Danasamy added a majority of the 63 firms listed on the Nairobi Securities Exchange are audited by major accounting firms.
She, however, did not give figures on the fees charged by the Big Four group of auditors compared to those that small audit firms charge.
Big Four audit firms have a strong presence in large and established companies, especially those that are publicly listed.
Experts who spoke at a two-day forum convened in Nairobi by MGI Africa attributed the popularity of smaller audit firms to small and medium-sized enterprises to keep growing as the small businesses increasingly seek stability and tax compliance.
Audit firms scrutinise the books of companies to ensure their financial records are correct and in line with the law.
Kenya Revenue Authority has in recent years upped efforts to ensure increased tax compliance, highlighting the rising demand for small audit firms whose charges are friendly to small businesses.
