How different are financial practices in agencies around the world?

While accountancy may not qualify as being the oldest profession, it can date its history back to before the Roman times and the ancient civilisation of Babylon. ‘Modern accounting’, i.e. double entry book-keeping, really started in Venice in 1494 when Luca Pacioli published his “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” which contained 27 pages on book-keeping. I’m sure it was as thrilling a read to scholars then as accounting textbooks are now to modern day students of accountancy!

You may be wondering why I am helping build your pub quiz knowledge in this article. The point I want to make here is that accounting hasn’t fundamentally changed that much in the last 500 years. The underlying accounting records of a business are pretty standard regardless of where in the world it is based. Numbers are numbers and accounting records are accounting records at the end of the day. In fact, with the increasing adoption of International Financial Reporting Standards (IFRS), accounting and reporting practices around the world are becoming more homologous. That applies equally to a marketing services agency as for any other business.

With our grasp of several European languages (albeit rudimentary in some cases), we have been able, fairly easily, to audit agencies in Germany, France, the Netherlands and the French speaking part of Canada. We will, however, need the help of a translator when we audit an agency in China later on this year!

What we have found by auditing agencies in the UK, US, Canada, Netherlands, France and Germany, is that the advertising and media agency business model is a pretty standard one.

Elsewhere on our website we talk about being “located 25 minutes away from London Heathrow airport…We can therefore easily be in any major city in the world whenever you require us.”. When I wrote the copy for the website, I didn’t imagine that soon afterwards more than two-thirds of our work would involve auditing agencies based outside of the UK!

What we have found by auditing agencies in the UK, US, Canada, Netherlands, France and Germany, is that the advertising and media agency business model is a pretty standard one. That’s right, just about every creative, media, PR, sales promotion, event or digital agency, regardless of size, ownership or location has a similar business model, using similar accounting systems, processes and practices. As a result we are pretty confident that we can carry out a contract compliance audit successfully wherever your agencies are based.

Nearly all agencies make their money, and record how they have earned it, in the same way.

In summary, you should expect to receive the same level of financial transparency from your agencies wherever they are located. Nearly all agencies make their money, and record how they have earned it, in the same way. This means that you can ask for the same financial information from your agencies around the world and expect to receive it from all of them. It also means that, irrespective of location, we have a high level of confidence that we know the right questions to ask and places to look to establish whether or not your agency contract is operating as written.

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