Audit services market is globalized. In order to stay in it and win the tough competition, the domestic audit firms have to join the international professional networks, associations or alliances. Although the vast majority has already made its choice, becoming members in one or another professional association, but there are those who still hesitate. What is better - a network or association? What pitfalls can their members come across? This is discussed in the following.
Network: total control and new clients
Choosing a professional association, it is important to clearly understand its features. Thus, an international professional network involves the use of a single brand - members of the same network have the same name, corporate identity, peculiarities of offering the promotional materials etc. Having chosen the network we should remember that it is necessary completely obey the rules of the head office.
Basically, its members companies are the separate legal entities, however, they are subordinated to the head office and governing bodies that coordinate their activities. Network members are united not only by the centralized management but also by the common standards of services provision, guidelines, and even single software. These requirements give the opportunity for its representatives from different countries to participate in a single project, which is very convenient when the performance of services for international clients.
There is one control system of quality services for all members of the network. Basically it works as a part of the software product subject to compulsory use. It is provided a system of sanctions for the violation, and in the event of serious and systematic violations - even expulsion from the network.
The process of acquiring membership in a professional audit network is rather difficult. It is preceded by thorough inspection, having passed which it is possible to obtain the favored international status. The head office prefers to work with market leaders capable of maintaining of corporate standards of the network.
The policy of international professional networks aimed at maximum expanding the territory of their presence, so when attracting new members, they are guided by the need to strengthen their position in a particular country. Usually the networks have one representative in each state. Although today there are also exceptions to this unwritten rule.
Despite the limitations in independence, membership in the network has a lot of advantages. Thus, a local audit firm can use the world famous and powerful brand adding a status. But the most important, the head office “shares” the clients, so a member of the international network will not be without work. There are also opened good prospects and professional development. The exchange of staff within the network is common.
However, it should be noted that the largest professional networks already operate in Ukraine. It is practically impossible to become their member.
Association & Alliance: independence and international name
Professional associations, such as associations or alliances that are essentially synonymous, are more flexible unlike the networks. There is no a single name for all members here as well as common corporate identity, website design, the centralized management etc. However, members of professional associations use the same standards of service, and have the right to borrow methods and regulations for work. However, the association does not require anything, but merely recommends. Its members remain independent in their activities. The truth is that the association periodically conducts the quality control of services provided by its members. Some internal documents are required to be used. For example, communications policy, peculiarities of the use of brand, standards of membership and so on.
Joining the professional association can not be called simple. Thus, the firm that applies for becoming its member should pass several stages of verification. Initially, the association requires information about the company activity, its clients, financial reporting for the last years, etc. If this information is satisfactory, the association comes to verify directly to the office of the company. Provided that the company is successful audited, it finally gets membership.
In contrast to the professional networks, the association is not limited to only one representative in a particular country. It has another politics: the more members in one country, the stronger position of the association.
There is no also single software for network members. Often the association can recommend using a particular program, but this is not a categorical requirement. Many companies - members of the association are interested in using the same software, since it opens them access to international projects and clients. As for the customers, there are no “direct supplies” here. Occasionally association can give a client for servicing, if the client directly addresses to the head office of the association, and territorially it is the most convenient to serve the client through a particular member.
In addition, members of the association often invite their colleagues to implementation of joint projects, especially when there is a need in a specialist a narrow specialist or unique experience. However, it is necessary to work on expanding the customer base in other way as a member of association or alliance.
The association conducts conferences in different parts of the world during the year. Topics of such events are interesting for management and key employees of the audit firm. For example, development trends in world market of auditing services, peculiarities of customer service, trends in promoting audit services etc. Participation in such events is also effective for the promotion of the firm and attracting new clients, because there can be established useful acquaintance. However, it is necessary to be active and sociable. Passive contemplation will not bring benefits.
Thus, as you can see, professional networks and associations are quite different in its essence. Both of these professional organizations have their advantages and disadvantages. Therefore, choosing where to become a member, first of all it is necessary to understand, at what the company is aimed and what it wants to achieve having gained the international status.