Story: Accountancy

Page 2. Modern accountancy

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By the 1960s a number of large New Zealand accounting firms with strong connections to major international companies had emerged. By the 1980s the eight largest international accounting firms were also the main players in New Zealand accounting. Subsequent mergers and business collapses reduced this number to four large international firms, Ernst and Young, KPMG, PriceWaterhouseCoopers and Deloitte. Known as the ‘Big Four’, they were all operating in New Zealand in 2009. There were also are a number of nationwide New Zealand accounting firms with links to smaller (but still very large) international firms.

There are smaller accounting firms around the country offering either highly specialised services, or general accounting services to small and medium-sized businesses.

US success

 

Many New Zealand accountants have chosen to work overseas, and some have risen to the highest positions in their profession. John Bethune Inglis was born in Coromandel and trained as an accountant in Wellington. He went to New York in 1925, at the age of 24, and joined the public accountancy firm of Price, Waterhouse, and Co. (later PriceWaterhouseCoopers). He became a partner of the firm in 1939 and chairman and senior partner in 1954. He also served as president of the US National Association of Accountants and was professor of business at the Columbia Graduate School of Business.

 

Accountancy and professional services

In the early 2000s the role of accountants continued to change as businesses changed. Many firms described themselves as professional services rather than accountancy firms, and saw their role as providing expert advice on finance, technology and strategy, as well as auditing, accounting and taxation services. For this work an understanding of both accounting and law is needed, and often lawyers and accountants worked together. The most important areas of commercial law included company, insolvency and contract law.

Professional services firms offered their clients traditional accounting services such as financial control, reporting, business valuation, insolvency services and taxation planning and advice. They also provided financial, economic and strategic advice, and risk management assessment.

Improving financial accountability

In the early 2000s large multinational firms such as Enron and WorldCom suffered a series of high-profile financial collapses and failures of management. Those firms’ accounting practices were thought to have contributed to their collapses and failures, and this led to a worldwide increase in accounting requirements. Increased financial reporting has also been required in the not-for-profit sector. The demand for greater transparency and accountability has seen bodies such as the New Zealand Charities Commission set up to register, monitor and advise recognised charities.

How to cite this page:

Philip Colquhoun, 'Accountancy - Modern accountancy', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/accountancy/page-2 (accessed 27 June 2017)

Story by Philip Colquhoun, published 11 Mar 2010