In yet another sign that the big four accounting firms’ empire is crumbling, an eight-strong tax advisory team has ditched Pricewaterhouse-Coopers (PwC) in South Africa because of the difficulties presented by the Sarbanes-Oxley legislation.
The team has moved to Sonnenberg Hoffmann Galombik, saying a law firm was a better fit for its practice than an accountancy firm.
The team, led by partners Bernard du Plessis, Gerhard Badenhorst and Christo Landmen, cited renewed emphasis on auditor independence in a tax advisory environment as the reason for its departure.
Sonnenberg has grown its tax advisory group significantly after hiring a 15-strong team from KPMG last year, which included both lawyers and accountants. The PwC team includes one lawyer and seven accountants.
Sonnenberg director Deon de Klerk said he believed a tax advisory team sat much better within a law firm than within an accounting firm because there was no conflict of interest. “I think eventually tax advice will no longer be provided by audit firms,” he said.
“[Sonnenberg] was one of the first law firms to successfully integrate attorneys and tax advisers with an accounting background,” said du Plessis. The team first approached the law firm in April this year.
Although the accountants cannot legally join Sonnenberg as partners, they will be remunerated in exactly the same way as the firm’s partners. They will join Sonnenberg within the next couple of months.