The impact of regulatory changes on the client service delivery strategies of a large multinational accounting firm in South Africa

Abstract

The purpose of this study was to explore the impact of regulatory changes on the client service delivery strategies of a multinational accounting firm based in South Africa. These regulatory changes were implemented in an effort to avert corporate scandals such as Enron in future and now seek to govern, amongst others, the activities and conduct of accounting firms.The focus of this research study is limited to a large accounting firm operating in South Africa in order to confirm and establish the extent of the impact of regulatory changes on client service strategies. Qualitative research was conducted through six face-to-face in-depth interviews with the top management of a large accounting firm. The single case study methodology was implemented using purposive, non-probability sampling and a semistructured questionnaire as research tool.The research confirmed the internal and external validity of regulatory changes on the client service strategies of the accounting firm and the profession. Although financial reporting regulations have forced accounting firms to become better acquainted with the client’s business risk, frustration due to independence restrictions exists and affects the auditor-client relationship. Unfortunately, increased regulations have also caused accounting firms to adopt onerous risk mitigating measures, thus negatively influencing their efficiency.