Get the full report in an instant download. [Free to PRO members.] Driven by improving economic circumstances, the Big Four are geared for revenue growth of 5% to 8% in 2013, with particularly good performances expected in advisory, Asia and even North America.
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Should the world worry about mixing audit and consulting? Amid concerns among lawmakers worldwide that the audit function was being diluted by consulting, Deloitte Touche Tohmatsu is reporting $31.3 billion in worldwide revenue for the year ended in May, an 8.6% advance for the year and the firm’s strongest increase since 2008. The revelations drew some sharp reactions. “It is hardly news that the Big Four accounting firms get bigger nearly every year,” says The Economist. “But where they are growing says a lot about how they will look like in a decade, and the prospects worry some regulators and lawmakers.”
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Public companies now pay an average of $3.9 million per year..
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And a Washington lobbyist. But is he exactly what E&Y needs as regulators bear down on the Big Four?
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Rebound led by growth in emerging nations. The years 2009 and 2010 may have been tough years for the Big Four amid a global financial crisis. But they clearly rebounded in 2011. And, the authors of a new report say, “The outlook for 2012 and beyond is quite optimistic.”
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Poll shows what it takes to land the best students. Public Accounting Report’s 30th annual poll of college accounting professors shows that if their best student had a choice, that student would choose PricewaterhouseCoopers to start their career. (To subscribe to Public Accounting Report for $476 a year, call 800-248-3248, or email cust_serv@cch.com.)
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Fueled by emerging markets and consulting. With annual worldwide revenue of $29.2 billion, PwC has edged past Deloitte to take bragging rights to the No. 1 spot. And brag they did.
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Up 1.4% in 2010 after 7% drop in 2009. Deloitte takes top spot from PWC. via “The 2010 Big Four Firms Performance Analysis” by Big4.com After an extraordinary period of continuous revenue growth from the early 2000s to 2008, combined revenue for the Big Four firms fell 7% in 2009, then recovered in 2010 and seems headed for bigger advances this year, according to “The 2010 Big Four Firms Performance Analysis” by Big4.com. In 2009, revenue decreases in US dollar percentage terms ranged from negative 5% for Deloitte to negative 7% each for Ernst & Young and PricewaterhouseCoopers to negative 11% for KPMG. But in 2010, the situation improved remarkably, with $95 billion combined revenue for the four firms in [...]
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Like many CPAs across the nation, firms in Toledo, Ohio, are reporting continued collection problems. And now, on top of that, many small firms are getting competition from larger firms moving down-market at cut-rate prices “Business has been good, but everything is getting stretched out,” said Chuck Mira, a partner in Mira + Kolena in Toledo, Ohio. “Cash is backed up through the system. “We would like to see national banks open up credit lines.” J. Clarke Price, president of the Ohio Society of CPAs, said, “I have heard around the state that 30-day clients went to 60 days or even 90. “Collection is more of an issue, and some clients are saying, ‘You’ve got to work with me on [...]
Grant Thornton International’s revenues drop 9%. But the real news is that for the first time the US and UK combined make up less than half of GTI’s fees. That’s “hardly surprising given the crisis everyone has been grappling with,” Gavin Hinks writes at Accountancy Age: But its the shift in the balance of power that is fascinating. China and Hong Kong has for the first time become one of GTI’s top ten performing territories… Are we looking at a time when those territories are so successful that GTI has to run the organization out of Beijing? HSBC’s chief executive Michael Geoghegan has just relocated to Hong Kong to be closer to the bank’s center of main interest. How long [...]
Hardly anyone, says Jim Peterson. No anarchist, the former Big Four counsel-turned-professor suggests that the collapse of a Big Four firm (or two, or three, or all) would barely be noticed in the financial markets: If the now-standard auditors’ report were suddenly not to be obtainable from any source, who would miss it? Should the stock exchanges be closed, if a Big Four failure meant that one-quarter of the large listed companies lacked an audit report? Could those companies’ securities be barred from trading? Unthinkable. Out where capital really flows and trade is actually engaged, the world’s markets would shrug, start the process of designing new forms of assurance from a blank page, and move on. And the splintered pieces [...]
Total fees fall 7%. A compilation of the Big Four accounting firms’ latest annual results shows the global economic slowdown abruptly reversed five straight years of double-digit revenue growth.
It wouldn’t be so hard to think, except that Accountancy Age is asking. The always interesting and provocative news source wonders, in an op-ed piece by two marketing strategists: So does E&Y have the right strategy and leadership to withstand the market forces? In the light of the firm’s current strategy, the answer is that, in the long term, it probably won’t survive. Their current strategy perpetuates the mistakes made in early 2000 when the firm sold its management consultancy arm to CapGemini. At the time, they pushed hard to recover the fees gone with the consulting arm, by focusing on growing its global accounts. The strategy flopped to a large extent though, as it lacked a key motivational ingredient [...]
We have at least six big questions. In what may be the first study of its kind, researchers report that the large international accounting firms are offshoring traditionally domestic audit procedures. “Offshoring is intuitively appealing on many levels, but it leads to yet-unanswered questions,” researchers say. For example: After consideration of all maintenance, monitoring, and quality control processes , how incrementally profitable is the offshoring of audit procedures? What types of procedures are appropriate for offshoring? Do clients, investors, standards setters, regulatory agencies, judges, and jurors see differences in audit quality when companies offshore domestic audit procedures? What are the impacts of offshoring on accounting firms’ domestic and foreign recruiting and staff development efforts? How do you maintain privacy, security [...]
At $1 billion, FTI should be ranked among the top 10 accounting firms. But it’s a distinction they might decline — because they’re a new breed of accounting firm.
The survival of CPA firms could depend on it. That’s the heretical advice of Jim Peterson (pictured), once an in-house lawyer for Arthur Andersen, now a practicing multinational attorney and columnist for the International Herald Tribune. He writes: I say it is time to stop making nice and to discard a 150-year-old piece of conventional wisdom. The concept of auditor independence does not serve the interests of investors.
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