Big Four Accounting Firms

Hi friends, I think you all are much aware of Big Four Firms in Accounting....1st we shell recall what are those 4 Firms

• Ernst & Young
• PricewaterhouseCoopers (PwC)
• Deloitte
• KPMG 

If we go in detail about those 4 firms.....

Ernst & Young

History

• Ernst & Young is the result of a series of mergers of ancestor organizations
• In 1903, the firm of Ernst & Ernst was established in Cleveland by Alwin C. Ernst and his brother Theodore and in 1906 Arthur Young & Co. was set up by the Scotsman Arthur Young in Chicago.
• In 1989, the number four firm Ernst & Whinney merged with the then number five, Arthur Young, on a global basis to create Ernst & Young.
• In October 1997, EY announced plans to merge its global practices with KPMG to create the largest professional services organization in the world, coming on the heels of another merger plan announced in September 1997 by Price Waterhouse and Coopers & Lybrand. 
• The merger plans were abandoned in February 1998 due to client opposition, antitrust issues, cost problems and difficulty of merging the two diverse companies and cultures.
• In May 2000, EY was the first of the firms to formally and fully separate its consulting practices via a sale to the French IT services company Cap Gemini for $11 billion, largely in stock, creating the new company of Cap Gemini Ernst & Young, which was later renamed Capgemini

EY Global Talent Hub in Bangalore, India (A major office in the EMEIA region)

Recently

• In 2002, EY took over many of the ex-Arthur Andersen practices around the world, although not those in the UK, China or the Netherlands.
• In 2006, EY became the only big four to have two member firms in the United States with the inclusion of Mitchell & Titus, LLP, the largest minority-owned accounting firm in the United States.
• In 2010, EY acquired Terco, the Brazilian member firm of Grant Thornton.
• In 2013, EY agreed to pay federal prosecutors $123 million to settle criminal tax avoidance charges stemming from $2 billion in unpaid taxes from about 200 wealthy individuals advised by four Ernst & Young senior partners between 1999 and 2004.

Motto of The Firm

"Quality In Everything We Do"

Staff and Ranking

• Ernst & Young was ranked No. 1 in the Forbes Magazine's The Best Accounting Firms to Work For in 2012, claiming that EY treats its employees better than other big firms.
• The firm was ranked No. 1 in Business Week's annual list of Best Places To Launch a Career for 2008.
• The firm was ranked No. 44 in the Fortune list of 100 Best Companies to Work For, and the highest among the Big Four, for 2009.
• Ernst & Young was ranked 4th in Universum's America's Ideal Employers list 2011 and 3rd in its Global Top Employers list.
• The firm was No. 34 in Computer World's 100 Best Places To Work For In IT for 2009.
• The firm was also placed among the top 50 places in the Where Women Want to Work awards for 2007.
• The firm was named as one of the 10 Best Companies for Working Mothers by Working Mothers magazine in 2006.
• In April 2009, Reuters reported that Ernst & Young launched an initiative encouraging its staff in China to take 40 days of low-pay leave between July 2009 and June 2010. Those who participate get 20 percent of regular salary plus benefits of full-time employee. It applies to employees in Hong Kong, Macau and mainland China where the firm employs 8,500 in total.
• In early 2012, it was reported that Ernst & Young has 10,000 staff in mainland China and Hong Kong, which has quadrupled in a decade. It has about 11,200 staff in the UK.
• In 2012, the firm was ranked number 1 in the Stonewall Top 100 Workplace Equality Index, a list of Britain's top 100 gay-friendly employers. In 2013, the firm was ranked number 6 in the same Workplace Equality Index.
• In the year 2013, Fortune Magazine ranked it among the 100 best companies to work for.

EY offices in Warsaw

Services

EY has four main service lines and share of revenues in 2011:

• Assurance Services (46%): comprises Financial Audit (core assurance), Financial Accounting Advisory Services, Fraud Investigation & Dispute Services, and Climate Change & Sustainability Services.
• Tax Services (26%): includes Business Tax Compliance, Human Capital, Customs, Indirect Tax, International Tax Services, Tax Accounting & Risk Advisory Services, Transaction Tax.
• Advisory Services (19%): consisting of four sub-service lines: Actuarial, IT Risk and Assurance, Risk, and Performance Improvement.
• Transaction Advisory Services (TAS) (9%): deals with companies' capital agenda – preserving, optimizing, investing and raising capital.

Amazon and Google Tax Affairs

Ernst & Young are tax consultants for both Amazon and Google, two multinational companies at the center of investigations into their large-scale tax avoidance

Bally Total Fitness Issue

Following allegations by the Securities and Exchange Commission (SEC) that Ernst & Young had committed accounting fraud in its work auditing the books of Bally Total Fitness, Ernst & Young reached two settlements, in 2008 for concerns related to the period 1997 and 2003 and in 2009 for the period of 2001 to 2003. The latter settlement included an agreement to cease and desist from violating securities laws and a fine of $8.5 million which was at the time among the highest such settlements that an accounting firm had ever paid the SEC.

Pwc

Name & Its History

The PricewaterhouseCoopers name was formed by the combination of the 

names of Price Waterhouse and Coopers & Lybrand, following their merger in 

1998. On 20 September 2010, PricewaterhouseCoopers rebranded as PwC, 

although the legal name of the firm remained PricewaterhouseCoopers

The firm was created in 1998 when Coopers & Lybrand merged with Price 

Waterhouse. The two firms each had histories dating back to the 19th 

century.

Coopers & Lybrand

In 1854 William Cooper founded an accountancy practice in London, which became Cooper Brothers seven years later when his three brothers joined.

In 1898, Robert H. Montgomery, William M. Lybrand, Adam A. Ross Jr. and his brother T. Edward Ross formed Lybrand, Ross Brothers and Montgomery In 1990 in certain countries including the UK Coopers & Lybrand merged with Deloitte Haskins & Sells to become Coopers & Lybrand Deloitte, in 1992 renamed Coopers & Lybrandin the United States.

Services

1. PricewaterhouseCoopers is organised into the following three main service lines
2. Assurance Services
3. Tax Advisory, (international tax planning and compliance with local tax laws, customs, human resource consulting, and transfer pricing)
4. Advisory – mainly consulting activities which covers Strategy, Performance Improvement, Transactions Services, Business Recovery Services, Corporate Finance, Business Valuation, Sustainability and Crisis Management in a range of specialist areas such as accountancy and actuarial advisory.

Offices

PwC has offices in 776 cities across 158 countries.

Main Offices of PwC

Saudi Arabia 

Egypt

Tokyo, Japan 

London, UK

Australia

Frankfurt, Germany

Notable Clients

PwC provides auditing services to the Academy of Motion Picture Arts and Sciences, giving it the unique distinction of having been (in various incarnations) the tabulator and certifier of votes for the Academy Awards since 1934

Logo

The current PwC logo was introduced in September 2010, to coincide with the firm changing its trading name from PricewaterhouseCoopers to PwC. It was designed by Wolff Olins

The Coopers & Lybrand logo prior to the 1998 merger

The PwC logo from 2010 to the present

 

The Price Waterhouse logo prior to the 1998 merger

                                                                                          

                                                                                                                                 The PwC logo from 1998 to 2010

There are many contravercies which were faced by PwC like .... 

American International Group Inc.

Willie Nelson

ChuoAoyama Suspension

Tyco settlement

Satyam case

Yukos prosecutions

Global Trust Bank Ltd and DSQ Software

Transneft Russia case

House of Lords inquiry in the UK

JP Morgan Securities audit.....

For few of them we shell see in detail.....

House of Lords inquiry in the UK

In 2011, a House of Lords inquiry specifically criticized PwC for not drawing attention to the risks in the business model followed by Northern Rock, a client of the firm, which was rescued by the UK government during the financial crisis.

Satyam case

In January 2009 PwC was criticised, along with the promoters of Satyam, an Indian IT firm listed on the NASDAQ, in a $1.5 billion fraud. PwC wrote a letter to the board of directors of Satyam that its audit may be rendered "inaccurate and unreliable" due to the disclosures made by Satyam's (ex) Chairman and subsequently withdrew its audit opinions.[51] PwC's US arm "was the reviewer for the U.S. filings for Satyam."Consequently, lawsuits have been filed in the US with PwC as a defendant. Two partners of PricewaterhouseCoopers, Srinivas Talluri and Subramani Gopalakrishnan, have been charged by India's Central Bureau of Investigation in connection with the Satyam scandal. Since the scandal broke out, Subramani Gopalakrishnan retired from the firm after reaching mandatory retirement age; while Talluri remains on suspension from the firm.

Tyco settlement

In July 2007, PwC agreed to pay US$229 million to settle a class-action lawsuit brought by shareholders of Tyco International Ltd. over a multibillion-dollar accounting fraud. The chief executive and chief financial officer of Tyco were found guilty of looting $600 million from the company.

Willie Nelson

In 1990, the US Internal Revenue Service seized most of the assets of Willie Nelson, claiming he owed $32 million in back taxes, including penalties and interest. He sued Price Waterhouse, contending that they put him into tax shelters that were later disallowed by the IRS.The lawsuit was settled for an undisclosed amount.

Deloitte

Name and its History

In 1993 the international firm was renamed Deloitte Touche Tohmatsu to reflect the contribution from the Japanese firm.[6] as well as agreements to use both of the names Deloitte and Touche.

In 1995, the partners of Deloitte & Touche decided to create Deloitte & Touche Consulting Group (now known as Deloitte Consulting)

n 2000, Deloitte acquired Eclipse to add Internet design based solutions to its consulting capabilities. Eclipse was later separated into Deloitte Online and Deloitte Digital

In 2002, Arthur Andersen's UK practice, the firm's largest practice outside the U. S., agreed to merge with Deloitte's UK practice. Andersen's practices in Spain, the Netherlands, Portugal, Belgium, Mexico, Brazil and Canada also agreed to merge with Deloitte.The spin off of Deloitte France's consulting division led to the creation of Ineum Consulting.

In 2009, Deloitte purchased the North American Public Service practice of BearingPoint (formerly KPMG Consulting) after it filed for bankruptcy protection. The firm also took over the UK property consultants Drivers Jonas in January 2010.

In 2011, Deloitte acquired DOMANI Sustainability Consulting and ClearCarbon Consulting in order to expand its sustainability service offerings.

In January 2012, Deloitte announced the acquisition of Übermind, Inc., an innovative mobile agency.The acquisition is Deloitte's first entrance into the mobile application field On 11 January 2013, Deloitte acquired substantially all of the business of Monitor Group, the strategy consulting firm founded by Harvard Business School professor Michael Porter, after Monitor filed for bankruptcy protection.

chicago

Services

Deloitte offices at Tower 200 of the Renaissance Center in Detroit.

Deloitte member firms offer services in the following functions, with country-specific variations on their legal implementation (i. e. all operating within a single company or through separate legal entities operating as subsidiaries of an umbrella legal entity for the country).

Audit and Enterprise Risk Services: Provides the organization's traditional accounting and audit services, as well as offerings in enterprise risk management, information security and privacy, data quality and integrity, project risk, business continuity management, internal auditing and IT control assurance.

Consulting: Assists clients by providing services in the areas of enterprise applications, technology integration, strategy & operations, human capital, and short-term outsourcing.

Financial Advisory: Provides corporate finance services to clients, including dispute, personal and commercial bankruptcy, forensics, e-discovery, document review, advisory and valuation services.

Tax: Helps clients increase their net asset value, undertake the transfer pricing and international tax activities of multinational companies, minimize their tax liabilities, implement tax computer systems, and provides advisory of tax implications of various business decisions.

Other Services: provides specialized services to clients in the fields of International Financial Reporting Standards (IFRS), clients with interest in China and Japan, and others.

Public Sector: Deloitte is one of the leading providers of state benefits eligibility systems and is widely recognized as an industry leader across the United States for Medicaid Eligibility Systems.

Deloitte office in Toronto

Staff

Deloitte hires entry-level personnel to client-facing functions through their graduate recruitment programs at selected universities.

Deloitte offers its staff a variety of career models to choose from based on their preferences, geographic location and business need.

The organization is consistently rated by Fortune as one of their "100 Best Companies To Work For".

In 2007 and 2009, Deloitte was rated the number one place to launch your career by BusinessWeek.

Criticisms

Adelphia Communications Corporation

Guangdong Kelon Electrical Holdings Company Limited 

Los Angeles Unified School District (LAUSD)

Australian Tobacco Industry 

Haringey Council Refresh Project

KPMG 

History

In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint

In 2003 KPMG divested itself of its legal arm, Klegal and KPMG LLP sold its Dispute Advisory Services to FTI Consulting

Headquarters of KPMG LLP, the United States-based member firm of KPMG International, at 345 Park Avenue, New York City.

Name 

KPMG building in Kamloops, British Columbia.

Roots for the name KPMG stem from the names of four partners who merged their own independent accounting firms:

• K stands for Klynveld, after Piet Klynveld, founder of the accounting firm Klynveld Kraayenhof & Co. in Amsterdam in 1917.
• P stands for Peat, after William Barclay Peat, founder of the accounting firm William Barclay Peat & Co. in London in 1870.
• M stands for Marwick, after James Marwick, co-founder of the accounting firm Marwick, Mitchell & Co. in New York City in 1897.
• G stands for Goerdeler, after Reinhard Goerdeler, chairman of the German accounting firm Deutsche Treuhand-Gesellschaft (DTG) and, later, chairman of KPMG.

Global structure

KPMG International is led by

• Michael Andrew, Chairman, KPMG International
• Alan Buckle, Deputy chairman, KPMG International
• Rolf Nonnenmacher, Chairman, Europe, Middle East, Africa and India Region
• John Veihmeyer, Chairman, Americas Region
• Hideyo Uchiyama, Chairman, Asia Pacific Region

Michael Andrew, previously Chairman of KPMG in Australia, assumed the Global Chairmanship in September 2011 and is based in Hong Kong. This is the first time a Big Four accounting organisation has had its global leader based in Asia Pacific.

KPMG in Leeds, West Yorkshire.

Awards

• No.2 in the 2011 World's Best Outsourcing Advisors – in recognition of the firm's depth of experience, global reach and holistic approach.
• Inducted into Working Mother Hall of Fame after being honored for 15 years as one of Working Mother magazine's 100 Best Companies for Working Mothers.
• International Tax Review Asia Tax Awards, 2008–2010 – in recognition of the accomplishments of KPMG's Tax Services and Global Transfer Pricing Services team.
• KPMG China was awarded the 2010 Hong Kong Tax Firm of the Year and the 2010 China Transfer Pricing Firm of the Year at the International Tax Review's 2010 Asia Tax Awards ceremony in Singapore on 23 November 2010.
• KPMG's global transfer pricing services in China and Hong Kong is headed by Chi Cheng.
• Top 2 overall in Consultancy Rankings 2009 by OpRisk & Compliance – in recognition of KPMG's experience in risk management.
• World's most attractive employers, 2010 – ranked Second, and First of the Big Four – in recognition of KPMG's efforts of being an Employer of Choice.

Staff

The US branch of KPMG was rated one of the top 10 companies for working mothers. [25] It is also ranked No. 56 on Fortune Magazine's list of 100 Best Companies to Work For, voted for by employees

It was also ranked No.4 on the list of "50 Best Places to Launch a Career" in 2009 according to BusinessWeek.

In 2008 KPMG in the UK was named the best big company to work for by The Times.

In October 2010, for the eighth year in a row, KPMG was named one of "Canada's Top 100 Employers" by Mediacorp Canada

November 2010 KPMG was also named one of Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper

In early 2012, it was reported that KPMG has about 9,000 staff in mainland China and Hong Kong

11,000 in the UK. Its global deputy chairman predicted that headcount in China will overtake that of the UK by the end of 2013

KPMG building in Kamloops, British Columbia.

Criticisms Faced

Rite Aid

In 2003, KPMG agreed to pay $126 million to settle a lawsuit stemming from the firm's audits of the drug chain Rite Aid.

Lernout & Hauspie

In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV

Siemens

In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case.In November 2008, the Siemens Supervisory Board recommended changing auditors from KPMG to Ernst & Young.

In 2006

Fannie Mae sued KPMG for malpractice for approving years of erroneous financial statements.

In 2008

In March KPMG was accused of enabling "improper and imprudent practices" at New Century Financial, a failed mortgage company and KPMG agreed to pay $80 million to settle suits from Xerox shareholders over manipulated earnings reports

n 2010

In August it was reported by the Swedish Financial Supervisory Authority to the Swedish accountancy regulator after HQ Bank was forced into involuntary liquidation after the Financial Supervisory Authority revoked all its licences for breach of banking regulations.

In 2011

In August KPMG conducted due diligence work on Hewlett Packard's $11.1 billion acquisition of the British software company Autonomy. In November 2012 HP announced a $8.8 billion write off due to "serious accounting improprieties" committed by Autonomy management prior to the acquisition

In 2013

In April Scott London, a former KPMG LLP partner in charge of KPMG's US Los Angeles-based Pacific Southwest audit practice, admitted passing on stock tips about clients, including Herbalife (HLF.N), Skechers (SKX.N) and other companies, to his friend, Bryan Shaw, a California jewelry-store owner. In return Shaw gave London $60,000 as well as gifts that included a $12,000 Rolex watch

On May 6 Shaw agreed to plead guilty to one count of conspiracy to commit securities fraud. He also agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors.This scandal led KPMG to resign as auditor for two companies.