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Regulation is driving growth at Mazars Back  
Regulation is opening up opportunities for Mazars, which is the seventh largest accountancy firm in Ireland with fee income of €16 million, according to the latest FINANCE Accountancy Survey. Joe Carr talks to Fiona Reddan about his ambitions for growth.
Since Joe Carr assumed the position of managing partner at Mazars Ireland in July 2002, the firm has continued to grow and prosper, buoyed by the strength of the economy, new opportunities opening up due to regulation, and growing sectors such as wealth management.
Joe Carr

Carr joined Mazars in 1985, and he has worked across a broad spectrum of management issues for several high profile corporate and institutional clients. Mazars currently employs 150 people in Dublin and Galway, and are continuing to grow. ‘Mazars sees itself as a national firm, and is constantly looking at opening new offices – I would envisage that we will expand further,’ says Carr.

He says that, ‘the essence of business is to grow and advance’, and that Mazars has a strategy focused on two main sectors - larger corporates, and small to medium enterprises (SMEs).

Mazars Ireland, which dropped the Chapman Flood Mazars name three or four years ago, is part of the Mazars International Association, which operates in 58 countries worldwide, with 5,300 employees and turnover of €500 million.

In the most recent FINANCE Accountancy Survey, published in October 2005, Mazars maintained its position as Ireland’s seventh largest accountancy firm. It performed well over the year, growing its fee income by 14 per cent, from €14 million to €16 million.

When asked whether Mazars’ ambition is to move up the Irish accountancy firm league table, from its present position of seventh, Carr says that ‘we focus on our own business rather the ladder’. But with the caveat that ‘we are ambitious to grow this business – on both the corporate and SME side’.

Regulation, such as Sarbanes-Oxley, has been a key driver of growth for Mazars, particularly in the area of Channel 2 non-statutory audit services to large corporates, due to the inability of the Big 4 firms to offer this service as well, due to conflicts of interest that arise.

‘This is opening up a lot of opportunity for a firm like Mazars,’ says Carr.

However, Carr says that regulation has its downside also, and is ‘becoming a little too demanding, relative to the benefits it brings’ for Irish businesses. He welcomes the Company Law Review Group’s revision of the Directors Compliance Statements introduced under Section 45 of the Companies (Audit & Accounting) Act 2003, which were deemed by the industry to be too onerous, and which the Government are now amending.

‘This is moving more towards making sense, and is a little more practical,’ he says, adding, ‘a minimum statement is welcome, but the requirements on directors is becoming a little unreasonable, you can’t prescribe too much’.

Tax is the fastest growing sector for Mazars, and they employ 30 people in the unit, one of Ireland’s largest tax divisions. Mazars has also started to move more into wealth management for the first time, and now has a dedicated wealth management team, says Carr.

Financial services is also a growing sector for the firm, and they advise both domestic and international banks based in Ireland.

On the SME side, a key driver of growth has been helping businesses to advance and grow, particularly amongst professional services firms such as consultants and architects, and the firm has been seeing a lot of growth from this.

He says that on the SME side that service firms need to move on an international basis, and to look outside of Ireland to keep their companies growing. As such more SME clients are using services across Europe, and quite a number are looking at investment abroad, particularly in Eastern Europe.

As regards the outlook for growth, Carr says that the accountancy industry mirrors the general business sector, and as long as the economy continues to grow, so will the accountancy sector.

One thing Carr would like to see introduced in Ireland are joint auditors. In France, all large companies need to have two auditors, as it ‘helps protect the independence of the audit function’ he says, adding that, ‘it is not any more expensive, and it helps improve the quality of auditing’.

Similar to the majority of managing partners responding to the FINANCE Accountancy Survey, Carr says that staffing is the biggest issue facing the industry. ‘The pressure to get excellent staff is very important – as a service business is dependent on having an excellent staff’.

The key shortage is at a more senior level, says Carr. ‘There are two things that you need – technical competence and experience,’ he says, and adds that Mazars is experiencing the same problem in branches abroad.

International Financial Reporting Standards (IFRS) were introduced in January of this year, but Carr says the jury is out on them. ‘Standardisation is important, but I wonder if parts of the new standards are necessary,’ he says.

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