British accountancy firms cannot afford to be complacent about their position in the market, KPMG Europe's chairman has warned.
In a speech to the Institute of Chartered Accountants of Scotland, John Griffith-Jones explained that auditors in the UK are facing growing competition from countries such as India.
The ability of firms based in emerging economies to provide the services of highly-qualified professional staff at a relatively low cost means the potential exists for large quantities of audit work to be outsourced overseas, he continued.
In the short-term that could lead to fee income dropping, but Mr Griffith-Jones said he was mainly concerned about the long-term impact the loss of work could have on
audit jobs in the UK.
"The staff pyramid of the big firms provides the country's 'accounting business school' alongside the professional bodies. Strip away the lower end of the pyramid and you strip away the supply source of the future," he explained.
Mr Griffith-Jones's comments came just days after the Institute of Chartered Accountants of India announced that all listed companies would be required to adhere to International Financial Reporting Standards by April 2011.
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