Mazars: the low-profile auditors who won over Goldman and Trump
French firm says its structure makes it well-placed to benefit from industry reforms
For a midsized accounting firm founded in the picturesque French cathedral city of Rouen, Mazars has picked up some surprisingly high-profile clients.
This week, Goldman Sachs, the world’s largest investment bank, confirmed it had selected Mazars to audit its European businesses in London and Frankfurt — a huge victory for a firm that ranks eighth in the UK in terms of its revenues.
It was also in the news this week in relation to another major client: Donald Trump. A US judge said he would not block a subpoena issued to Mazars USA seeking access to Mr Trump’s financial records, as part of a long running political inquiry into the president’s business interests.
Industry insiders have observed the firm taking centre stage this week with a sense of bemusement. “A lot of people said they just did not see this coming,” said a senior partner at one of the UK’s largest accounting firms of the Goldman appointment. “Mazars is off a lot of peoples’ radar screens. But good for them — they deserve their day in the sun.”
The firm, which was established by an accountant, Robert Mazars, on the Rue de Buffon in Rouen in 1945, has grown rapidly but is still widely regarded as midsized. The number of partners has gone from 10 in 1985 to just over 1,000 around the world, while revenues have risen from €1bn in 2013 to €1.6bn last year.
Mazars itself acknowledges that it has kept a relatively low profile, despite its growth and a list of audit clients that includes some of the world’s largest companies, from French finance heavyweights Axa and BNP Paribas to automaker Peugeot and advertising giant Publicis.
David Herbinet, a UK partner at Mazars, said: “Some people would say we are much better at doing the work than we are at talking about the work we do — promoting ourselves and selling ourselves.”
Despite its revenue growth, Mazars is still smaller than other “challenger” audit firms — BDO, Grant Thornton and RSM — and is a long way behind the “Big Four” of EY, KPMG, Deloitte and PwC.
Yet significant opportunities beckon in the UK market: after a series of corporate scandals and hotly debated proposals for reform, Britain is poised to begin forcing its 350 largest listed companies to appoint two auditors.
Its rivals readily admit that Mazars is well-placed to benefit from this shift given its extensive experience of the French audit system, where joint audits of major listed companies have been required for decades.
Mazars insiders also say that the firm’s relatively rare structure — as a single global partnership, rather than a grouping of smaller partnerships — is a selling point when pitching for new business. Their belief is that this more unified structure makes it easier for teams from different countries to work together on international contracts, and that the corporate culture is more collegiate. Three Mazars partners interviewed for this piece emphasised how fond they are of the firm, two of them saying it was like a large family.
Its competitors describe it as “decent” and “capable”.
Insiders at Mazars are confident that the Goldman contract is just the beginning in terms of the firm gaining the recognition and prestige it has long sought beyond its country of origin.
Phil Verity, Mazars’ UK managing partner, said: “We are one of the smaller challenger firms with £200m of UK revenues. Our ambition is to be the leading challenger firm in this market and to be seen as the specialist firm to go to for high quality audit and non-audit work.”
Mr Herbinet added: “The ambition is there and the investments are there. What has been missing so far are the opportunities. We know that it is not a level playing field and some kind of regulatory change needs to happen to give us the opportunity to show how good we are.
“We are more than ready to take on at least 50 [FTSE 350 audits]. But we will aim for more. We see ourselves on a par with the Big Four, delivering equally good work, if not better.”