Deloitte's New Innovative Pro Bono Program

Deloitte just announced a new way to help society. Its vision is laudable - " transform the way the organization supports charitable organizations and strengthens the nonprofit sector". This emulates other result-oriented charitable organizations such as the Gates Foundation, where charitable contributions are made with clear line of sight to outcomes and return on initial investment.

Deloitte's new program establishes a formal budget, policies and procedures for a $50 million in outcomes-focused pro bono engagements, to provide in-kind professional services to eligible nonprofit organizations, over the next three years. Deloitte will help nonprofits deal with business and operational issues they face while meeting their missions.

Deloitte appears to bringing business consulting and for-profits focus to social organizations, and highlights that nonprofits face strategic, operational and financial challenges, which can be solved through known consulting techniques.

Deloitte cites an example where its volunteers helped College Summit (a national nonprofit organization dedicated to seeing that all college-ready students, regardless of socio-economic background, go to college) significantly cut the time to generate reports, enabling it to focus better on its original purposes.

“Nonprofits must function as highly effective organizations in order to achieve their social missions, yet most nonprofits struggle with weak operational capacity and lack of access to the capital necessary to build it,” said Evan Hochberg, National Director of Community Involvement, Deloitte Services LP. “Through our new pro bono program, Deloitte is responding to that need and delivering world-class counsel and services to build critical operating capacity for the nonprofit organizations with whom we work.”

This is entirely new in the Big Four world, typically firms would encourage volunteer days or fund United Way charitites or specific projects, and not really monitor the end results of their efforts. Deloitte seems to be saying something different, they will help nonprofits in a systematic way, apply proven consulting mechanims, institute the program and see the result. The budgeting of $50 million gives proof to the thought behind this initiative. Deloitte's probono efforts may become more selective but hopefully produce real societal results.

We applaud this effort for it shows community development focus of a Big Four firm, combined with its core strenghts of enabling clients to realize real results. And we would be delighted to see success stories on Deloitte's website.

Finally, we will see if other Big4 firms follow's Deloitte's lead.



For more info, see www.deloitte.com/us/probono.

And read the entire press release at
http://www.deloitte.com/dtt/press_release/0,1014,sid%253D2283%2526cid%253D191773,00.html

All Big4 Firms On Fortune's 100 Best Companies To Work For

All Big Four firms recently made it to the recent Fortune magazine's listing of Top 100 US Companies to work for. This ranking is highly anticipated and widely quoted. Deloitte even carried a press release on their inclusion on their website.

Leading the pack in the list was Ernst and Young at #57, followed by KPMG at #71, PricewaterhouseCoopers at #90, and Deloitte at #95.

And here are more interesting numbers from the report. Keep in mind that these are the US firms of the larger international Big Four partnerships, and while some numbers pertain to the US, some others (such as revenue) are for the global firm:

Fortune Rank - E&Y clearly the leader here (12,200 members on E&Y Facebook!)
Ernst and Young 57
KPMG 71
PricewaterhouseCoopers 90
Deloitte and Touche 95


Number of Employees in United States - Deloitte has the most by far
Ernst and Young 25,947
KPMG 22,857
PricewaterhouseCoopers 29,818
Deloitte and Touche 36,517

Number of Employees outside United States - Fortune numbers appear unreliable
Ernst and Young 88,000
KPMG 340
PricewaterhouseCoopers 365
Deloitte and Touche 5,104

% of Minorities - Deloitte is the best firm for minorities
Ernst and Young 30%
KPMG 28%
PricewaterhouseCoopers 28%
Deloitte and Touche 32%

% of Women - But PwC has the highest % of women
Ernst and Young 49%
KPMG 44%
PricewaterhouseCoopers 49%
Deloitte and Touche 46%

Annual Job Growth% - KPMG is booming in creating new positions on % basis
Ernst and Young 4%
KPMG 8%
PricewaterhouseCoopers 5%
Deloitte and Touche 7%

New Jobs Created Annually - But Deloitte leads in terms of pure numbers
Ernst and Young 958
KPMG 1,422
PricewaterhouseCoopers 1,315
Deloitte and Touche 2,453

Number of Job Applicants - Nearly a million applicants to E&Y and Deloitte!
Ernst and Young 436,340
KPMG 186,267
PricewaterhouseCoopers 204,460
Deloitte and Touche 475,286

Voluntary Turnover% - But a good % leave each year and become ALUMNI!
Ernst and Young 15%
KPMG 17%
PricewaterhouseCoopers 12%
Deloitte and Touche 14%

Average Annual Pay $ - E&Y just shy of $100K, others not far behind
Ernst and Young $99,469
KPMG $72,430
PricewaterhouseCoopers $88,007
Deloitte and Touche $77,495

2006 Revenues ($ Millions) - Fortune numbers appear unreliable
Ernst and Young $21,100
KPMG $19,810
PricewaterhouseCoopers $20,772
Deloitte and Touche $23,000

Data source: Fortune magazine, February 4, 2008 issue,

GAO Finds Big4 Audit Share is a Whopping 98%

The US Government Accountability Office just released a very interesting report on the state of the Audit industry as it relates principally to the Big4 audit firms and their smaller-sized competitors. This is a complex area and the GAO study attempts to address many of the intricate dimensions, including questions such as:

What share do the Big4 firms have of top companies?
How much choice do client companies really have while choosing auditors?
Why do large companies generally select one of the Big 4 firms?
Why don't the smaller accounting firms step into the big league?
What would happen if a Big4 firm exited the marketplace?
Should a Big4 firm break-up and what will this mean?
Why are audit fees rising?
How does Sarbox play into audit firm performance and concentration?

Now's here an amazing finding - Big 4 firms (PwC, D&T, E&Y and KPMG) audit an astounding 98% of 1,500 largest public companies with sales over $1 billion. 60% of 6,000 companies surveyed said that there wasn't enough choice in selecting auditors. The Herfindahl index, which measures concentration in a sector, for the audit market was 2,300 - the Department of Justice indicates that any number over 1,800 is highly concentrated.

Not surprisingly, concentration is high and choices are low - all indicators that things are as tight as they can get and any further concentration will mean structural and regulatory changes in the marketplace. That is to say, that while no one is expecting a reduction to Big 3, it will cause a number of governmental agencies to work in concert to mitigate the situation. Several actions to prevent these are mentioned in the report.

There's much more in the 120 page report, which we will address in future postings.

E & Y Spells Out the Top 10 Risks for Global Business

In a recent fascinating study, Ernst and Young spells out their findings on the top strategic risks facing global businesses, based on discussions with 70 top risk analysts.

These Top 10 are:

1. Regulatory and compliance risk
2. Global financial shocks
3. Aging consumers and workforce
4. The inability to capitalize on emerging markets
5. Industry consolidation/transition
6. Energy shocks
7. Execution of strategic transactions
8. Cost inflation
9. Radical greening
10. Consumer demand shifts
    

E&Y looks at risks in three broad categories across multiple industries:

1. macro threats arising from general geopolitical and macroeconomic environments
2. sector threats from trends or uncertainties in a specific industry
3. intense operational impacting the strategic performance of leading firms

We paraphrase E&Y's explanation of these risks:

1. Regulatory and Compliance Risk

Why is this E&Y’s top choice? A growing regulatory burden in many markets, multiplicity of compliance challenges as companies globalize, the heavy impact on pharma, biotech, insurance, telecoms and utilities sectors by changes in the external environment make this risk extremely important as it can cause fundamental change in business models. As companies become more global, compliance is a larger challenge, forcing them to oversee diverse regulations in multiple markets.

2. Global Financial Shocks

Few industries and companies are insulated from major global financial shocks. As the recent credit crunch has proven, biotech and utilities firms would face troubles raising capital; banking, asset management, and insurance companies could have direct losses; and oil & gas companies might face losses if oil prices collapse due to sudden recessions. Disintermediation in financial markets could easily turn off in periods of credit pressures. Systemic financial problems could hurt sustainability of the financial sector growth.

3. Aging Consumers and Workforce

Areas such as asset management and insurance are experiencing dramatic shifts in demand as their consumer age. The auto sector is facing severe competitive challenges as a result of their aging workforces. Numerous industries are experiencing dramatic shifts in demand, often dramatic growth, as average ages rise in Europe, North America, and Japan. To be competitive, companies need to better understand specific needs of these new consumers

4. Emerging Markets

Emerging markets, while great areas for new growth, they also pose great risks. Global companies will need to partner/form networks with firms in many markets. There are also
currency, operational, regulatory, language, and cultural risks in these countries, especially as firms manage outsourced business and supply chains in these markets.


5. Industry Consolidation/Transition

Industry transition would continue to pose a key strategic challenge in 2008 due to changes in
underlying structural trends, such as population growth, GDP growth, consolidation, restructurings and spin-offs, mergers driven by competitive pressure, and need for acquisitions to meet growth targets.

6. Energy Shocks

Shocks in energy prices and access to supplies are challenging to the energy sector; and can also trigger economic shocks that could impact sectors such as insurance, consumer products and real estate; with few companies are immune to this risk.

7. Execution of Strategic Transactions

There is a major risk that transactions undertaken in response to industry consolidation may fail to deliver, not because they are poorly conceived, but because of a failure to meet operational
challenges. Also, new types of strategic transactions, including divestitures in real estate, spin-offs in auto, and separation of telecom companies into utilities and service providers are driving further risk.

8. Cost Inflation

The return of high inflation is a major risk. Demographic changes and the rising costs of health care are creating a serious challenge for US auto manufacturers. The aging workforce at established Western producers leads to costly buy-outs, benefits, and so on. There will be an ongoing decline in employment in the sector in the Western World, with large impacts for
affected economies.

9. Radical Greening

Increasing environmental concerns from the voluntary world of corporate social responsibility – to hard regulatory and economic necessity. Radical greening is a strategic risk, partly driven by the consumer and regulatory responses to climate change, and also by the weather events resulting from climate change.

10. Consumer Demand Shifts
The failure to anticipate and respond to consumer demand shifts driven by
demographic shifts, such as growing consumer aging could be a strategic risk when the
changes are significant, fast or unexpected.

The Next 5

E&Y spells out their next 5, equally critical, yet not making the top 10 list:

1. War for Talent - shortage of technical expertise; asset management and
real estate, which are seeing talented staff poached by alternative investments; and pharma,
which is facing a ‘skills crunch. Especially in emerging marketsw, growing regional concentration/clustering of talent – while expertise can be found in more nations than ever, within nations it is becoming more concentrated in a small number of clusters. This phenomenon is particularly true in biotech and other high-tech areas. This leads to increasing wage rates, property rental, and competition for expertise.

2. Possibility of a Disease Pandemic - a major disease outbreak would have a dramatic impact in nearly every sector, especially on the pharma and biotech sectors.

3. Threat of Private Equity’s Rise. Especially in auto, where Private Equity firms are leading
unplanned, hostile takeovers by consolidating, and forcing restructuring and creating spin-offs.

4. Inability to Innovate is significant for business in 2008. Innovation is becoming an increasingly crucial strategic challenge as markets mature. Stagnation in mature markets means that companies have to innovate to find profit. However, innovation is a substantial risk as nine out of ten new products fail.

5. Threat of a China Setback. China might experience volatility as it continues with an
extraordinary pace of development. A growth slowdown in China could leave oil & gas
companies suddenly facing a low oil price environment. A severe slowdown could add to
turmoil to world markets or threaten banks or insurance companies with large China
exposures; or a natural disaster in China could disrupt global supply chains.

To effectively combat these risks, Ernst and Young recommends that company leaderships must:

• Conduct an annual risk assessment that defines key risks and weights probability and
  impact on business drivers.
• Go beyond financial and regulatory risk to consider the wider environment in which the organization operates and the full extent of its operations.
• Conduct scenario planning for the major risks that can be identified and develop a number
  of operational responses.
• Evaluate the organization’s ability to manage the identified risks, specifically that risk management processes are linked to the risks that the business actually faces.
• Effective monitoring and controls processes to provide both earlier warning and
  improved ability to respond.
• Keeping an open mind about where risks can come from.

Big Four Firms Report Tremendous 2007 Results

The Big4.com 2007 Firms Performance Analysis

The Big Four accounting firms had a banner year in 2007 with double-digit revenue growth on the heels of strong performances in 2006 and 2005. KPMG had the highest annual growth rate among the firms with 17.4%, followed by Deloitte at 15.5%, Ernst and Young at 15% and PricewaterhouseCoopers bringing up the rear at 14.4%. Despite this relatively slower growth, PwC remains the planet’s largest accounting firm with 2007 revenues of $25.2 billion, ahead of Deloitte at $23.1 billion, E&Y at $21.1 billion with KPMG being relatively the smallest firm at $19.8 billion.

Combined, the Big Four firms had an astounding total revenue of $89.2 billion. If the firms were to continue this level of performance, the combined total would exceed a hundred billion dollars in 2008.

The depreciating US dollar in 2007 was also a key contributor to this performance, as all the Big Four firms report in US$ but earn much of their revenues in Europe and Asia, where local currencies appreciated strongly against the dollar. In terms of local currencies, growth was a little subdued. Combined Big Four revenues grew 11.7% from $77.1 billion in 2006 to $86.1 billion in 2007. Thus foreign exchange effects contributed a full 4% points or $3 billion to the combined firms revenue.

These spectacular growth patterns are seen usually in much smaller companies, and that huge $20 billion professional service companies are able to achieve double-digit back-to-back growth rates is testimony to their global reach and ability to capitalize on the need for financial services by all of the world’s economies. Big Four firms leveraged well global mega trends of stringent financial reporting (Sarbanes Oxley, internal audit), strong IPO listings (and subsequent audit work), complex M&A deals (due diligence, assurance), growing tax complexity, emerging economies, globalization, private equity buyouts, and risk management.

Service Line Performance

In terms of service lines, Advisory and Consulting services for all four firms combined grew the fastest at 21.7% from $18.0 billion to $21.9 billion. Ernst and Young reported a terrific 29% growth in this service line. All other firms grew close to 20% in 2007.
The Tax service line services for all four firms combined grew at 18.4% from $17.6 billion to $20.8 billion. KPMG’s Tax service line (ironically) grew the fastest at 20%, and Deloitte grew the slowest at 16.5%.

Audit or Assurance service line grew at the slowest relative pace. For all four firms combined, revenues grew 12.9% from $42.1 billion to $47.5 billion. This service line is the largest contributor to revenue and was likely held back by the sheer size of the practice. Ernst and Young again was the winner in this category with a revenue growth of 16%. PwC’s Assurance service line grew only 10.2%, the slowest in this category, and the lowest growth rate among all service lines and across all firms.

Owing to its high growth the Advisory service line became a larger contributor of total revenues to the Big Four firms. For all Big Four firms combined, the share of the Advisory service line of the total revenue grew from 23.1% in 2006 to 24.3% in 2007. This share gain of 1.2% came at the expense of Tax and Audit. Advisory services now contribute almost one-quarter of Big Four firm revenues, though there is disparity among the firms. In Deloitte and Touche, Advisory and Deloitte Consulting were 31% of total revenues in 2007, and in KPMG Advisory Services were 32% of total revenues. For E&Y, Advisory services were only 12% of total revenues in 2007.

Tax service line also marginally improved its contribution share. For all Big Four firms combined, the share of the Tax service line of the total revenue grew from 22.6% in 2006 to 22.9% in 2007.

Audit, owing to its slower growth, lost a lot of its contribution to the total. For all Big Four firms combined, the share of the Audit service line of the total revenue actually dropped from 54.3% to 52.8%, a share decrease of 1.5%. If such growth patterns were to continue in the service lines, Audit could well drop to less than 50% of total revenues in just a couple of years. Already in KPMG and Deloitte, Audit is less than 50% of total revenues.

Geographical Performance

As in previous years, the Big Four firms reported the strongest growth in Asia, helped by underlying strength in China, India and Southeast Asia. Europe turned in surprisingly good numbers while the mature market of the Americas had the slowest growth rate.

While Asia remains the smallest geographical segment, it grew by 22.2% from 2006 to 2007. Ernst and Young’s Asia segment grew by a spectacular 27%. Even Deloitte, with the slowest growth among the firms reported a 17.2% growth rate. Owing to its high growth rate, Asia’s share of total revenues for all the firms improved by 1% from 12% in 2006 to 13% in 2007, at the expense of the Americas.

Many firms reported more than 30% annual growth in the BRIC (Brazil, Russia, India and China) economies, reflecting the strong economic momentum in these countries.

Europe is the largest region by far for all the firms. On a combined basis, Europe had strong growth of 19.2% from $34.7 billion in 2006 to $41.4 billion in 2007. KPMG grew by 20.9% in Europe, while the slowest grower Deloitte reported a 12.6% growth rate. The combined Big Four European revenues in 2007 was $41.4 billion, a full 46% of the total combined revenue and increasing from 45% in 2006. For KPMG, Europe is already 54% of total revenues, contributing to more than half its total revenues. Surprisingly, the European region in 2007 raced ahead of Americas on a combined basis, widening its lead to almost $5 billion. By contrast, in 2006, combined European revenues was only $1.4 billion more than the Americas.

Despite being domiciled in the Americas, the home region for all the Big Four firms grew the slowest and also lost its leading share in terms of revenues. On a combined basis, Americas had only moderate growth of 10.3% from $33.3 billion in 2006 to $36.7 billion in 2007. Deloitte grew by 11.9% in Americas, while the slowest grower PwC did not even make the 10% mark, reporting only a 9.1% growth rate. The combined Big Four American revenues fell a full 2% points from 43% of the total combined revenue in 2006 to 41%. KPMG, which is heavily Europe-based, only produced 33% of its total revenues from the Americas. Even the PwC behemoth had only 38% of total revenues from Americas.

On a combined basis, the Americas are nearly $5 billion in revenue behind the biggest region, Europe, and this gap appears to be widening rather quickly. This geographic size and growth disparity, especially in the Americas, is sure to pose some interesting questions to the currently-US-centric Big Four firms about their future center-point and constitution of their top leadership.

People

The Big Four firms on a combined basis employed 546,690 partners, professionals and administrative staff in 2007, increasing their employment 9% from 501,736 in 2006. The Big Four firms now have more than half-a-million employees by far! Assuming a 10% attrition rate in 2007, the Big Four firms would have hired 96,000 personnel in 2007, almost 400 each business day of the year.

The partner count increased from 30,429 in 2006 to 32,009 in 2007, an addition of only 1,580 partners. PwC reported the smallest growth in its partner ranks by only 3.6% from 8,280 to 8,578, only 298 new partners were added in 2007. It certainly appears that the partner ranks are tightly controlled, only 6% of these half-a-million employees could be termed as partners and owners of these lucrative businesses.

Total combined professionals across all the firms were 409,579 in 2007 increasing 10.5% from 370,716 in 2006, as the Big Four firms bulked up by hiring non-partner professionals. Here again, PwC despite its large size had the least number of new hires, up only 4.3% from 2006 to 2007.

Total combined administrative staff across all the firms were 105,102 in 2007 increasing moderately 4.5% from 100,591 in 2006. Here again, PwC despite its large size actually appeared to have shrunk its administrative staff, which fell by 0.7% from 2006 to 2007.

Ernst and Young’s total personnel grew from 114,279 to 130,000 a whopping increase of 13.8%, which means that this firm hired the highest total number of employees in 2007. However, Ernst and Young does not appear to report the breakdown of these by ranks. Our estimate for Ernst indicates that its partner ranks grew by 7.1% and professional staff grew by 16.4%. It seems that Ernst was certainly more active than the other firms in the labor marketplace and more likely to extend offers.

Revenues per partner for the Big Four firms also increased substantially as partner ranks increased much slower than revenues. Each partner sold on the average $2.81 million in 2007, up 10.8% from $2.54 million in 2006. Each partner also appears to have managed a larger pyramid, leading 16.5 professionals in 2006 and 17.2 professionals in 2007. It certainly looks like partners are enjoying a growing share of the pie, but have to sell more and manage more to make their numbers work

Summary

All Big Four firms turned in tremendous growth performances in 2007, with KPMG being the overall winner in terms of annual % growth, and PwC continuing to maintain its position as the size leader. Deloitte has a solid position behind PwC and marginally higher growth rates, which would indicate that the gap could shrink over time. Ernst and Young crossed over the $20 billion mark in 2007, while KPMG remains shy of this level this year.

Forex was a large contributor to growth this year, and could hurt overall results in US dollar terms were to strengthen in the coming months. Asia and Europe continue to power ahead, some of the growth is certainly due to appreciating currencies, but that is not to take away from solid underlying growth. Action seems to be moving away from the Americas, and this is certainly going to have interesting effect on the firms in the future.

Ernst and Young was clearly adding aggressively to its personnel base, while PwC seemed to be adding relatively the fewest number of people, despite its large size. The Big Four continue to monitor their partner ranks, keeping this august club small and certainly well compensated.

All told, these were results to be proud of, and these large firms have to think through the challenges and opportunities that lie ahead in 2008 and how they can repeat such tremendous results in the coming years.


Reporting

The Big Four firms certainly need to learn something from their audit clients. For the most part, firms’ reporting of their own numbers left much to be desired in terms of transparency, ease of use and detail. For one, no firm reported profitability, though this is quite understandable given their private ownership. While the division across service lines was quite clean, each firm had its own specific way it looked at the world. There was just no consistency in reporting by well-defined geographic regions.

In this set, we thought that PricewaterhouseCoopers provided the most information. Numbers were well presented, easy to read and detailed in terms of financial performance, service line performance and personnel.

We put Ernst and Young in last place in terms of reporting their numbers. Its 2007 press release was vague, and could not be analyzed without physical reference to the 2006 annual review. Further, months after reporting results, the 2007 annual review was still not available on their website of http://www.ey.com/. Also, Ernst and Young did not provide the breakdown of personnel by partner, professional and administrative – we believe this is fairly relevant reporting and remain mystified by its absence.


Disclaimer

Though we believe our numbers and analysis are correct, we do not guarantee their accuracy. This analysis should not be used for any investment or presentation purposes.

We had to make some minor adjustments and changes to uniformly analyze our data. For example, we exercised judgment in selecting appropriate sub-regions to comprise a region. We also had to estimate Ernst and Young’s personnel breakdown using averages of the other three firms.

Please give full credit to The Big4.com 2007 Firms Performance Analysis
while referring to or reporting on this analysis. We are available at marketing@big4.com or (866) 690-5050.

KPMG - Last Big4 to Report, Shows Excellent Growth

KPMG was the last Big Four firm to report its 2007 financial performance this year. Revenue growth was solid across all business lines and geographies. Advisory services and BRIC countries grew the fastest, to put KPMG's 2007 revenue just shy of $20 billion.

Revenues shot up 17.4% to US$19.8 billion for year ending September 30, 2007 against US$16.9 billion in 2006. Correcting for FX, growth was 12.7% in local currency terms.

In terms of business lines:

• Audit revenues increased 13.3% to US$9.39 billion. In 2007 KPMG LLP, the U.S. firm, regained the number 1 position as the auditor for the largest U.S.-based bank audits.
• Advisory services grew the fastest at 22.2% to US$6.43 billion, helped by M&A activity, heightened regulations and demand for performance improvement.
• Tax services increased 20% to $3.99 billion
  

In terms of geographies:

• Asia Pacific region's revenues grew 21.6% to US$2.55 billion with strong growth in Japan and China
• Europe, Middle East and Africa revenues increased 20.9% to US$10.67 billion
• Americas region revenue grew 10.6% to US$6.59 billion, and was the slowest growth region. Latin America was up 24% percent
• BRIC countries (Brazil, Russia, India and China) grew an amazing 41%
  
  In 2007, KPMG had 7,160 Partners up 3.9% from 2006; 92,924 Professionals up 10.6%; and 23,239 Administration personnel up 6.3%. Total personnel of 123,323 increased 9.3%

Now that all the Big4 firms have reported numbers, we will soon publish in our blog:

Big4.com's 2007 Financial Performance Scorecard

Yes Virginia, Deloitte Says Santa Still Holding Steady

Deloitte's 22nd annual survey cuts through typical Big Four stodginess with a refreshing headline:

Yes, Virginia, There is a Santa Claus; Gift Buying is Expected to Hold Steady, Although Consumers Will Spend Less Overall

Here's what Virginia needs to know about the American consumer: While 4 of 10 have intentions to spend less this year than last, they may end up spending almost the same amount. And why do people want to spend less? Lower income households cite higher food and fuel costs as reasons, while those at higher income levels point to volatility in the stock market and declining home values.

Consumers expect to buy an average of 23 gifts, up from 22 last year and the highest in the last six years. Deloitte finds women plan to buy even more, with an average of 26 gifts.

Only 57% of consumers say the economy will improve or remain the same next year. But 85% say they feel secure about their jobs, about the same % as last year.

And now to verify something that everyone is getting more aware each year - Christmas gifts are coming in small packages, including tiny envelopes....

Deloitte finds that for the fourth straight year, gift cards are expected to be the top gift purchase, with more than 69% planning to buy, compared with 66% last year. It appears that Americans are drawn in by their convenience and that it perhaps eliminates the hassle of deciding what to buy, leaving it to the recipient. 16% plan to buy a whopping 10 or more cards - one of each of their family member and an average of $36.25 per card on average compared with $30.22 last year.

On the flip side, 39% would rather get a gift card than merchandise, an increase from last year’s 35%, with resistance to giving gift cards falling from 19% saying they don’t like to give gift cards because they’re too impersonal down from 22% last year).

“Again, convenience is key,” said Deloitte's Janiak. “A gift card to a store that the recipient enjoys is a thoughtful gift that accommodates Americans’ limited time to shop. As gift cards continue to grow in popularity, retailers need to be even more creative in their redemption programs, so that they can quickly recognize the dollars in their revenues and potentially capture additional spend beyond the value of the card. As we approach the holidays, retailers could encourage consumers to redeem their unused gift cards for this year’s gift purchases by offering a dollar amount or percentage off the purchase, free gift wrap, or some other bonus.” According to the survey, nearly half of consumers (49 percent) have at least one partially or completely unused gift card; on average, these consumers have 3.7 unused cards.

Also, with all the recent recalls of toys and concern about lead paint, consumers are increasingly wary of safety of imported products. Almost 38% said they feel food products imported from other countries are not safe, and 35% said the same for non-food products. 58% say the recent news stories about product recalls will influence some of their purchase decisions this holiday season.

OK, the gist of this survey, expect people to throng the registers to buy slim gift cards, buying locally made products and much against their instinct buying a ton of gifts for their near and dear.

Yes Virginia, Santa Claus does exist, but has a much easier time coming down the chimney this year without much of his voluminous gifts.

Here's the full report
www.deloitte.com/us/2007HolidaySurvey.

Grant Thornton Revenue Up 17%

Grant Thornton LLP, the U.S. member firm of Grant Thornton International, reported on October 17th, that its revenues increased 17% to break the bilion dollar level for the fiscal year ending July 31, 2007. Revenues was $1.036 billion

Grant Thornton also said that of its 1,896 new client engagements, 1-in-5 were companies with global operations. But it did not provide much more than this high level info.

Last fiscal year, Grant Thornton LLP reported that revenues climbed 22% to $886 million in the fiscal year that ended July 31, 2006.

So this is a 17% growth on the back of another 22% growth last year, showing that not only Big Four firms, but also the Next Six Firms have also have spectacular revenue growth.

KPMG: The Last Big Four Firm to Report 2007

KPMG is the last Big Four firm to report its results. The other Big Four firms - Ernst and Young, PricewaterhouseCoopers and Deloitte and Touche - have all reported their fiscal 2007 results. And they have all been terrific, all at around 15%, which is quite amazing given that the starting point for revenues is around $20 billion. It is quite hard to grow at these rates for several consecutive years for mega professional service firms.

Which tells us that financial and corporate business worldwide has exploded in the last few years, especially in BRICTIM countries - Brazil, Russia, India, China, Turkey, Indonesia and Mexico, where their growth has been generally in excess of 20%. Keep in mind that these countries had a combined GDP of US$7.4 trillion or about 15% of the total global GDP of $48 trillion, and growing at ~7%.

We will be watching for KPMG's report (due out around December 1, 2007), which we anticipate to be in line with the other three. After that we will create a detailed financial analysis of the Big Four 2007 reported performance.

Ernst and Young: Double Digit Revenue Growth to $21 Billion

Ernst & Young just announced that its global revenues soared to US$21.1 billion for the fiscal year ending 30 June 2007, increasing 15% or US$2.7 billion higher than 2006.

The firm saw double digit performance in each of global service lines and each of the seven geographic Area practices:

• Assurance and Advisory Business Services (AABS) was up 16% due to continued steady demand for assurance and risk-based services, together with the growing call for business advisory services
• Transaction Advisory Services (TAS) was up 29% revenue increase, due to involvement in some of the largest deals over the period, higher emerging market activity, and good demand from Private Equity
• Tax revenue was up 18%, due to strong demand for tax services, particularly in Far East and Americas

In the seven Areas, US dollar growth was also spectacular, especially in developing countries:

• 10% in the Americas
• 22% in Northern Europe, Middle East, India and Africa
• 16% in Central Europe
• 17% in Continental Western Europe
• 27% in the Far East
• 16% in Oceania
• 21% in Japan.
• China, India and Russia — growth in excess of 30%

Excellent performance from E&Y along with all the other Big Four who have reported double digit growth performance. Just shows how strong these firms are, how well they are integrated with the global economy and how they are able to leverage their size for delivered tremendous growth.

With this, Ernst and Young's revenues comes $2 billion behind Deloitte and Touche and $4 billion behind PricewaterhouseCoopers.

PCAOB CFO - Ernst and Young Alum - Resigns

The Public Company Accounting Oversight Board reported that its CFO Tom Hohman resigned to become a CFO of a private company in Maryland. He had joined PCAOB in July 2003, and was its first CFO and one of the founding officers. He began his career as an auditor with Ernst & Young LLP and is a Certified Public Accountant.

The PCAOB or Peekaboo is an organization sanctioned by the Sarbanes Oxley act to oversee accounting firms...to replace the self-policing of the industry

PricewaterhouseCoopers - IT Security Getting Stronger

A recent PricewaterhouseCoopers survey finds that companies are investing in IT security infrastructure but lagging on their monitoring and enforcement. The 5th annual Global State of Information Security Survey 2007, the largest multi-industry 120+-country survey of its kind, contains responses of 7,200 IT, security and business executives.

Why is IT security important? Consider all the high-profiles losses of laptops (both from Big Four firms and other companies) which expose social security numbers, credit card information and other sensitive personal data of thousands of individuals. These not only get negative publicity for the company but also exposes them to litigation and other costs. Thus, controlling sensitive data and keeping it securely within corporate walls is a key concern not only for IT, but also for the CFO and CEO.

Here are the key findings of this survey:

India, a major destination for IT outsourcing for the developed world, appears to have made major gains since 2006, while unsurprisingly, China lags the world in almost all privacy safeguards.

IT security is now being controlled by the IT department. Data breaches are driving privacy concerns, but encryption of data at rest remains a low priority

60% of organizations now have a CSO or CISO and 57% have an overall information strategy. As every professional knows by now, passwords are becoming crucial to accessing any kind of corporate hardware……the survey finds 80+% are invested in network firewalls, data backup, user passwords, and spyware.

While all this exists, only 48% measured and reviewed the effectiveness of security policies and procedures in the last year; and most companies do not document enforcement procedures in their information security policies.

Another interesting finding…lack of agreement between CEOs, CIOs and CSOs on security priorities and spending. CEOs and CIOs focus on business continuity and disaster recovery, while CISOs focus on regulatory compliance

Also…employees are the number one most likely source of an information security event…69% say employees and former employees as the likeliest source of attacks, surpassing hackers at 41%

PwC has done a great job in compiling these statistics and monitoring responses in a disciplined manner across multiple years. Clearly access to such a large pool of survey respondents is only available to large accounting firms such as the Big Four, and their role in keeping tab on important corporate issues is not be understated. IT security is at the heart of the modern economy in that every individual is affected by loss of security pertaining to personal and corporate information. Companies have a long way to go to enforce privacy procedures (a human issue) but the investment in infrastructure (a capital expenditure issue) seems in better shape. We hope to see better trends from this survey in future years.

The source of this study is “The State of Information Security 2007, a worldwide study by CIO, CSO and PricewaterhouseCoopers.” The full report is at http://www.pwc.com/extweb/ncpressrelease.nsf/docid/8CD1133CA44BF33E8525735C00552F01

BearingPoint Q2-2007 Results: Loss Widens, Gross Profits Drop

BearingPoint recently reported its Q2-2007 results for its second quarter of 2007 ending June 30, 2007....BE is catching up on contemporaneous SEC reporting, so this is for results achieved almost four months ago

Revenue for Q2-2007 were $875 million dropping from Q2-2006 levels of $893 million, and gross profit was $142 million, declining a whopping $49 million from $191 million prior. As a result net income (loss actually) widened to $(64) million from $(2) million in prior quarter.

This is by no means great performance, the large drop in operating profit of $49 million appears operational in terms of revenue decrease and people related in terms of an increase in stock based compensation. Here's what BE had to say about it in their 10-Q:

Our gross profit for the three months ended June 30, 2007 was $142.5 million, a decrease of $49.0 million, or 25.6%, compared with gross profit for the three months ended June 30, 2006 of $191.6 million. Gross profit as a percentage of revenue decreased to 16.3% during the three months ended June 30, 2007 from 21.5% during the three months ended June 30, 2006. This decline was the result of decreases in revenue and increases in professional compensation due primarily to stock–based compensation related to our February 2007 grant of PSUs, which more than offset a decrease in other direct contract expenses.

To dig into the operational performance, we reproduce the segment detail from the 10-Q, it appears that Public Services is holding its own for the most part (this is all Governmental services), but Commercial and Financial Services are really hurting, so BE is able to play the Federal side well, but not making headway in general business consulting. EMEA is up, much as Europe seems to be doing well, but Latin America swung to a loss.


Three Months Ended June 30,

2007 2006
Operating Operating
Revenue Income (Loss) Revenue Income (Loss)

Public Services $359,494 $ 67,782 $341,081 $ 70,652
Commercial Services 133,973 19,187 159,323 40,380
Financial Services 70,761 6,536 112,170 32,984
EMEA 196,988 32,691 170,427 26,687
Asia Pacific 89,925 19,761 89,627 18,858
Latin America 23,281 (1,021) 18,660 1,070
Corporate/Other 924 (177,112) 1,392 (175,969)

Total $875,346 $ (32,176) $892,680 $ 14,662

In terms of BearingPoint stock, it was damaged severely by a 12% drop in a single day not that long ago, reaching new lows, and as of October 27, 2007 it was $4.62 per share, close to 52-week lows. Obviously investors are not happy with this performance and appear to have little confidence in the stock. At this price level, BE's market capitalization is only $948 million, a prime candidate (as we have said before) for a MBO or LBO, which even despite these tough credit markets could very likely happen.

PricewaterhouseCoopers - Still Top of the Pyramid

PricewaterhouseCoopers remains top dog among the Big Four firms.

With 2007 revenues of $25.1 Billion, PwC roars up with 14.4% growth in revenues from 2006 and remains ahead of Deloitte by $2 billion.

Advisory increased 14.6% to US$5.7 billion; tax services was up 15.1% to US$6.3 billion; assurance up 6.7% to US$13.1 billion

Central and Eastern Europe revenues were up strong at 22.4%, South and Central America up 19.1%; Asia up 18.8%; Western Europe up 9.4% and North America increasing 7.8%

Partners were 8,576 in 2007, up from 8,280 in 2006. There were 146,767 employees in 2007, up 142,162 in 2006. Deloitte has grown faster in employees, so appears PwC is somewhat more efficient in terms of productivity, though Deloitte seems to have more latent capacity to be used in 2008.

An overall analysis will be done here when KPMG and EY results are available

Deloitte and Touche: Revs up 16% to $23 Billion

Deloitte Touche Tohmatsu (Deloitte) recently reported revenues were up by 15.5% to US$23.1 billion for the fiscal year ended 31 May 2007. This is the firm's fifth consecutive year of double-digit revenue growth with each service line and region increasing at double-digit rates.

Advisory increased 25% to US$1.89 billion; consulting grew 16% to US$5.19 billion; tax services grew 16% to US$4.98 billion; audit services was up 13% to US$11.08 billion.

Asia Pacific was up 17% to US$2.46 billion; Europe-Mideast-Africa region grew 12.6% to US$9.18 billion and Americas increased 12% to $11.49 billion.

Deloitte had 146,600 employees in 2007, up from 132,400 indicating 14,200 net employees were hired in 2007. Deloitte had 8,500 partners in 2007, indicating an employee to partner ratio of 17.2.

These are spectacular results, with Deloitte posting yet another double-digit revenue growth performance. To grow at 16% at $20+ billion is quite a feat and Deloitte has demonstrated that its global reach and diversified businesses can continue to deliver terrific results.

In another blog post, we will talk about PricewaterhouseCoopers' recent results, where revenues soared to $25 billion, just $2 billion over Deloitte.

KPMG Says M&A Market About to Peak

KPMG is calling the top of the M&A market!

The firm's Corporate Finance's Global M&A Predictor is indicating that global merger and acquisition activity is about to peak. Further, it thinks that overall deal volumes in 2007 will be below records achieved in 2006. How do they do this: looking at a forward index of 1,000 leading companies' net debt to EBITDA ratios and Price Earnings ratios shows that things are slowing - 12 month forward PE valuations is increasing only marginally. However, there is still money sloshing around - cash and debt level remain high, but investor confidence and appetite are certainly more conservative.

What's remaining are only smaller deals and the big ones are done, but the air from the M&A balloon will be let off only slowly.

Here's what KPMG is finding, and we quote heavily from their study:

• In the first five months of 2007, there was a significant discrepancy between the key trend indicators of deal values and volumes. The last time the market witnessed this kind of 'disconnect' - where the average deal size rose, but the number of deals fell - occurred at the height of the dot com boom in 2000. A sign that the market is starting to cool came in H2 2006 when the total number of deals fell for the first time since H1 2003 (dropping 8 percent compared to H1 2006)
• 
  Appetite for M&A transactions appears to be slowing, despite conservative balance sheets. Twelve month forward PE valuations rose marginally to 17.1x compared to 16.8x in both June and December 2006 which implies a restriction on the available “bid” premium in the marketplace. Balance sheet capacity remains conservative but has tightened marginally from 0.85 times to 0.91 times.
  
• Interestingly, Europe looks most positive in terms of potential M&A activity, due to rising PE momentum, while Asia Pacific once again looks the weakest. The U.S. remains static in terms of valuation, suggesting the potential for a slow down.
• 
  In terms of sectors, the best M&A prospects are in Utilities Europe, Basic Materials North America, Oil and Gas North America, Industrials Europe and Consumer Services Europe with the weakest prospects being Consumer Services AsPac and Consumer Goods AsPac.

Here 's the full study:

http://www.kpmg.com/Press/07.11.2007.htm

PricewaterhouseCoopers - Class Action Law Suit Looms

PricewaterhouseCoopers could be potentially facing a class action law suit for overtime pay...it looks that the Canadian law suit bug may have just slipped over the border.

The fundamental issue claimed against the Big4 is essentially the same - employees supposedly made to work long hours without being paid overtime pay. In this case, Kershaw, Cutter & Ratinoff (KCR) appears to be investigating a potential class action lawsuit on behalf of these associates against the Big4 accounting firms.

KCR claims that under federal Fair Labor and Standards Act (FLSA), and state laws, including the California Division of Labor Standards Enforcement employees classified as “exempt” can be denied overtime pay and mandated meal and rest periods. In the special case of accountants, according to these laws, only those who have a CPA license can be truly marked as “exempt” employees. Thus, associates who do not have a CPA licence (and hence "unlicensed") cannot be classified as "exempt" and thus cannot be denied overtime pay. So, the reasoning goes, that if the Big Four firms did make these "unlicensed" associates work beyond their normal times of working and then denied them overtime since they were (allegedly wrongly) classified as exempt, they are not following the law; hence these associates can as a class claim overtime pay in arrears from the Big Four firms.

We looked at the KCR website, where we found this:

KCR has already filed a class action suit against the largest Big 4 Accounting Firm, PriceWaterhouse Coopers (“PwC”) to recover overtime for its unlicensed associates. The case has been pending for more than a year, and the issue of whether the case will be approved as a class action should be decided shortly. If the Court agrees to certify the class, this will be the first time that a Big 4 Accounting Firm will face the threat of actually having to comply with laws mandating the payment of overtime on a company-wide basis. A successful verdict in this case could potentially change the way all Big 4 Accounting Firms do business nationwide.

Apparently, KCR has already initiated action against PwC and is waiting on the Courts to see if they will allow it to become a class action suit. KCR is also seeking such associates so that it can bring together large number of such plaintiffs to bolster its position. The money at stake can be quite large as the Big Four firms do employ a large number of associates and as all alumni know, everyone at a Big4 firm works quite hard.

Of course, it is not clear at this time whether the Courts will allow this to proceed. In Canada, other Big Four firms and banks have been taken to court for this same reason. It does put the whole situation in a very interesting light - how will the Courts swing -in favor of KCR or the Big Four....we have to wait and see how this develops

PricewaterhouseCoopers LLP UK turnover up 6%, profits grow 11%

PricewaterhouseCoopers LLP United Kingdom recently reported a 6% increase for FY 2007 turnover to £2.1 billion. PricewaterhouseCoopers LLP FY07 financial year runs from 1 July 2006 to 30 June 2007.

Of this:

• Assurance increased 4% to £947 million (core audit services grew 8%)
• Tax turnover sped up 13% to £667 million
• Turnover in Advisory grew moderately at 4% to £493 million (Performance Improvement Consulting grew by 8%. Net revenue growth in Corporate Finance was 12%)
• Revenue at Business Recovery Services unit (aka bankruptcy consulting) declined due to good economic conditions

Underlying net revenue increased 9% and underlying profit shot up 11% to £631 million from £586 million in 2006.

Average profit per partner rose 6% to £757,000, with partner numbers up to 822. 56 new partners were admitted on 1 July 2007, with 15 new partners recruited externally during the course of FY07.

Note that turnover includes expenses and disbursements associated with client assignments; and underlying net revenue excludes these items.
Recently we blogged that Deloitte UK reported even stronger results: Sales were up 16% and profits payable to partners were up 17%, profit per partner was £877,00. Deloitte UK has now turnover of £1.8 billion and profits of £572 million and 652 partners.

It appears that Deloitte UK is growing both the top and bottom lines much faster than PwC UK; we don’t have enough reported information to really analyze why this differential exists.

But if this is indicative of global results which are to come shortly, it may not be long before Deloitte beats PwC in revenue as Deloitte posts high double-digits revenue gains versus high single-digits revenue growth for PwC. We shall see in November 2007!

http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=2448&NewsAreaID=2

Ouch! BearingPoint Stock Dives 12% to New Low

BearingPoint Inc. dropped almost 13% to $4.80 today in mid-day trading hitting a new all-time low. BE shares have traded between $5.49 and $9 in the past 12 months.

Late last week, the company revealed in a SEC filing that net loss for Q1-2007 reduced as sales increased and costs declined. Quarterly net loss of $61.7 million or 29 cents per share improved from loss of $72.7 million, or 34 cents per share in Q1-2006. However, revenue edged up 4% to $866.3 million from $833.7 million. Analysts polled by Thomson Financial were expecting revenue of $877.5 million.

Upon this news, many analysts reduced their 2007 earnings expectations on seeing slower-than-expected margin improvements. Yet investors and analysts fretted over company base costs which didn’t go down far enough and anticipated to continue at this level. 2007 earnings estimates as a results were drawn down. Equity analysts estimate Q2 and Q3 of 2007 to come in at 7 cents per share and Q4 at 8 cents per share.

According to news reports, analysts uniformly reduced their EPS and target price, but kept their revenue estimates unchanged as they believe the top line continues robust and the issues lie in the cost side of the company. Sales for the year are expected to be around $3.6 billion.

The Citigroup analyst dropped his Q2-2007 EPS estimates to 2 cents from 12 cents; Q3 to 4 cents from 9 cents; and Q4 to 10 cents from 18 cents. Overall this is a cumulative drop of 23 cents putting the year at 18 cents.

JPMorgan says 2007 estimates are only 3 cents per share on sales of $3.54 billion. Previously JPM had 39 cents EPS on sales of $3.56 billion expectations.

Goldman Sachs also lowered 2007 EPS by 23 cents to only 5 cents for the year.

All in all, continued poor performance, instability in the financials, losses in clients, high involuntary turnover and delayed reporting are all taking their toll on investor confidence and on the stock price.

CapGemini Pushes Google's Office Suite - Takes Lead

Watch out Microsoft!

We see that CapGemini will start to push Google online office software (email & calendar management, word processing, spreadsheet) to its corporate clients. This happens to the first time that a large technology consulting (and Big Four) firm is partnering with Google for this set of services. Earlier we had blogged that BearingPoint had partnered with Google to apply its corporate search application to customers.

What this means is that Google is aiming at the lucrative PC market in corporate customers. And with Capgemini’s help, they can now begin to influence software purchases in more than 1 million PCs in companies worldwide. Now, CapGemini is not entirely focusing on Google, but will continue to support software by IBM and Microsoft.

Google’s application suite is based on a usage basis with a annual charge of $50 per user per year. This has been of great appeal to small businesses and universities owing to their tighter budgets, but it has been hard going for Google to enter the much more sophisticated, demanding and security-conscious corporate IT market. Interestingly, Google’s software is online, so users have to be in general connected to the internet to gain access. Whereas Microsoft’s suite resides on the hard disk, so it is truly portable and doesn’t need to be online, a big help to traveling executives.

Google didn’t make a whole lot of money from this – only $70 million from sales of software licenses and other services in 1H-2007, a drop compared to the billions from search services.

With this partnership, they not only are gaining credibility, but also a key player in the IT space. CapGemini is the first of the Big4 to do this, and we will see if BearingPoint and Accenture, who are in the same space follow this lead.

KPMG Sued in Canada

Here’s an interesting one….KPMG in Canada has been served with a class action lawsuit by former employees that it forced hundred of (mainly tax accountants and auditors) employees to work overtime without paying for such additional time. The lawsuit seeks at least $20 million in punitive damages.

The suit claims that employees were made to routinely put in more than 90 hours a week to finish projects and keep clients satisfied. Employees were allegedly made to “eat their time” if they worked any extra hours over what was specified in the project schedule or committed to by their clients.

The case illustrates Alison Corless, a tax assistant, reportedly is seeking $87,000 in unpaid overtime based on the number of actual hours worked versus number of hours paid.
It is common practice in professional services / accounting / tax firms that employees generally work longer hours than their stipulated chargeable hours, such hours may not officially get logged in order to keep the engagement financials intact, but may be necessary to keep clients satisfied. In competitive situations when the engagement is won, hours are estimated but circumstances may require additional working time, and this makes employees being asked to “eat their time” and not charge to contract.

While this is common, it appears there is a fine line whether it does or does not meet local labor practices. The suit alleges that KPMG was in violation of overtime laws. KPMG is still studying the suit before it makes a response.

This is a tough call for the Big Four, if they have to continually monitor the additional hours which are routinely needed against potential law suits which could arise several years after such incidents. Also, it creates another avenue for risk (in addition to clients, shareholders and others) to manage, control and mitigate.

This happens to be the second such lawsuit in Canada, in June 2007, a similar class action was filed against Canadian Imperial Bank of Commerce in Ontario.

We are curious to see how this will turn out, since it is hitting at the heart of professional service operations. Will KPMG be able to overturn this, or will the ex-employees prevail, in either case it has large implications for the industry.

PwC Pays $3 million to Justice to Settle Allegations

PricewaterhouseCoopers LLP and IBM are paying $5 million to settle allegations that both these firms made improper payments on government technology contracts. PwC’s share: $3.2 million, IBM’s share: $3.0 million.

The Justice Department said that these companies solicited, paid money or provided other benefits to several companies. This is in violation of federal law. Both PwC and IBM said this settlement does not admit that they are guilty and they specifically denied the kickback allegations.

This is part of a larger investigation, which includes Accenture, another Big Four firm. The federal government indicates that these companies formed alliances and paid kickbacks to government consultants which were supposed to provide independent opinion on which IT systems to purchase.

In fact, this relates to PwC’s former consulting unit which was involved in this lawsuit/ PwC Consulting was sold to IBM in October 2002. PricewaterhouseCoopers said that "(We) believe that the allegations of the complaint characterizing conduct as 'kickbacks' are completely without merit as to the firm, but chose to settle the case, without any admission of wrongdoing, in order to avoid the expense, distraction and uncertainty of litigation."

In settling, PwC is avoiding tons of money to be paid to lawyers and undue distractions as well as finger-biting waiting on legal outcome.

E&Y Has Big Growth Plans for China

Ernst & Young wants to increase its Chinese staff from 8,000 to a whopping 32,000 in ten years, a nearly 400% increase. The hot Chinese economy is creating terrific demand for Big Four services and Big Four personnel. Every Big Four accounting firm is bursting at the seams with demand and business, moreover job hopping is becoming common, and companies are complaining about the shortage of experienced audit personnel.

So, large influxes to the Big Four are likely to happen, and at an increasing rate. E&Y wants to open 2 to 3 branches each year (from current number of 10 branches) for the next few years as it goes deeper into Western China. E&Y’s CEO, James Turley, says, "We need to have a firm in China in the next foreseeable future, you know, 10-plus years, and we are not talking about 8,000 or 9,000, we are talking about 25,000, 28,000 or even 30,000 staff in China."

Ernst & Young last year became the official auditor for the listing of Industrial and Commercial Bank of China, which marked the world's biggest IPO of shares in 2006.
Many of other E&Y Chinese clients are big state-owned enterprises such as China Mobile. Ernst & Young took over a local accounting firm in 2001, making it the first foreign player to make such a Chinese acquisition.

China is growing at robust rates and will continue to grow at good rates far into the future, and will remain the focal point for international companies and professionals.

Deloitte UK Revenues Up 16%, Profit Soars 17%

Deloitte UK recently posted results, audit firms in the UK need to publish financials, unlike their counterparts in the