Mazars: auditor wants to win Dax mandate

Dusseldorf n F

Mazars office building

The French are among the top ten auditors in Germany.

(Photo: Mazars)

The auditor Mazars is preparing to take on a mandate in Germany’s first stock exchange league. “We will be investing heavily, especially in Germany, over the next few years,” said the French company’s head of Germany, Christoph Regierer, in an interview with the Handelsblatt. “Our goal is to win a Dax 40 mandate in the final exam.”

The Dax is almost completely dominated by the “Big Four” PwC, Deloitte, EY and KPMG. Only the auditing company BDO currently has a single mandate with SAP. Mazars is in seventh place in the industry in Germany in terms of sales and is therefore one of the group of so-called “challengers” in the auditing business.

Mazars does not want to become a “new Big Four company”, but feels comfortable in the position of the challenger, says Regierer. “But we will prepare ourselves for the next big step in terms of personnel and technology.” After the growth of recent years, he sees the financing of the investments as secure.

In the fiscal year that ended in August, Mazars increased sales in Germany by 14 percent to 233 million euros, as the company announced on Wednesday. The percentage growth was thus similar to that of the market leader PwC. The examination board grew by eleven percent, while management consulting grew by 25 percent.

“Mazars will set up an organization that will eventually be able to process large mandates outside of France,” explains Regierer. The company is one of the leading auditors in its home market.

>> Read also: Auditor rotation in the Dax: The market for auditors is becoming ever tighter, as the exclusive Handelsblatt ranking shows

In France, the company is also hired by top companies for the required joint audits. Two auditors test a company at the same time according to the four-eyes principle. There is no such obligation in Germany.

Nevertheless, today’s challengers have a better chance of breaking the dominance of the “Big Four”. The Dax companies still book them almost exclusively as auditors. Because they guarantee sufficient human and technical capacities and the necessary international presence, which many pursuers do not offer. However, the concentration in the tester market is also met with displeasure from customers.

graphic

The concentration has increased. Due to its involvement in the Wirecard scandal, EY has recently not been able to win any new major contracts in the audit of listed companies. This means that KPMG, Deloitte and PwC are often the only alternatives when looking for an auditor.

The pursuers, who, in addition to Mazars, include providers such as BDO and Grant Thornton, want to fill this gap. “They claim to be perceived as a veritable alternative, and their growth plans are correspondingly ambitious,” explains Jörg Hossenfelder, Managing Director of market researcher Lünendonk & Hossenfelder.

“The test customers want more variety on the market,” says Mazars Germany boss Regierer. “We are asked to take part in the selection process.” He did not want to specify in which industry the company is aiming for the first Dax mandate. Mazars has a strong focus on the financial services segment.

Mazars adheres to a mix of consulting and testing

The company has been checking the balance sheets of Goldman Sachs and Helvetia Insurance for some time. Mazars has now also won the mandate of UBS Europe, the German business of the major Swiss bank, and the WWK insurance group, as the company announced on Wednesday. In addition, it will test parts of the fund company DWS.

Mazars could therefore also be recommended for larger German companies. The company will already have to upgrade its staff. Mazars currently has 120 partners and around 2000 employees in Germany. This year, 700 to 1,000 new employees are expected. Most recently, Mazars poached a larger insurance team from competitor BDO.

Mazars Germany boss Christoph Regierer

“The test customers want more variety in the market.”

(Photo: Mazars)

In order to take on large global mandates, however, Mazars will also have to expand its international presence. The group is an integrated organization, unlike the “Big Four”, which are connected to each other in a network via national companies. Mazars is currently active in 100 countries around the world, either itself or through alliances.

Mazars does not want to follow the EY example of separating auditing and consulting. EY plans to spin off its consulting business into an independent company later this year. “We are sticking to the integrated model of testing and consulting,” says Regierer. “It gives us the necessary breadth of skills that customers demand and that are necessary for the final exam.”

More: EU postpones next reform of auditors by years

source site-17