NAIROBI, Kenya- Accountants in Kenya are raising concerns over what they describe as discriminatory practices favoring the “big four” audit firms—PriceWaterhouseCoopers (PWC), Deloitte, KPMG, and Ernst & Young.
Complaints have been lodged with the Institute of Certified Public Accountants of Kenya (ICPAK) regarding the undue priority given to financial statements audited by these large firms, to the detriment of smaller, equally competent audit firms.
ICPAK, the regulatory body for accountants in Kenya, has received numerous complaints from various stakeholders, including audit firms and their clients.
The issue at hand is the perceived preferential treatment given to financial statements audited by the big four firms.
ICPAK emphasized that categorizing firms does not promote any firm or category as superior. Instead, all auditors and accounting firms licensed by ICPAK have undergone rigorous vetting and are fully qualified to offer their services under their respective license categories.
Philip Kaikai, ICPAK chairman, stated, “Any profiling that attempts to designate some audit firms as ‘the big four’, or to determine that only financial statements audited by the said big four firms are valid or acceptable, is discriminatory, biased, irregular, and anti-competitive.
ICPAK categorizes audit firms based on the number of partners, ranging from sole practitioners to firms with over ten partners.
This classification aims to demonstrate their varying capacities without implying superiority. ICPAK licenses audit firms under four categories: Category C (Composite License) for Audit and Assurance Services, Tax Services, Accounting, Controls, and Consulting; Category A for Audit and Assurance Services; Category M for Accounting, Controls, and Consulting; and Category T for Tax practices.
ICPAK reassures that all licensed firms are suitable to offer services under their license categories.
ICPAK urges financial institutions and other stakeholders to recognize all licensed audit firms’ capabilities and refrain from discriminatory practices.
By doing so, they ensure a fair and competitive environment where all audit firms, regardless of size, can thrive and contribute to the financial industry’s integrity.
In his statement, Kaikai reiterated the institute’s commitment to maintaining high standards and fairness in the profession, “We will not tolerate any attempts to undermine our mandate or the integrity of the auditing profession in Kenya.”
The call for equitable recognition of audit firms highlights a critical issue in the financial sector’s competitive landscape.
By addressing these concerns, ICPAK aims to uphold the principles of fairness and competitiveness, ensuring that all licensed audit firms can provide their services without undue prejudice.
