Professional Services Monitor: Today

 

June 17, 2010

FY2009 Audit Fees Updated

In April, we took a preliminary look at FY2009 audit fees, based on the the proxy statements processed at the time.  We have updated this analysis with an additional 1,500 filers, bringing the total to 3,636 proxies tracked between January 1 and June 15, 2010.

The preliminary analysis showed PricewaterhouseCoopers with a small increase in total fees.  Now, PwC has a change of -0.8%, with KPMG next among at the Big Four at -2.8%.  Among the top ten firms by total fees, only ParenteBeard had positive growth at 6.1%.

(more…)

November 18, 2009

Auditor Market Share Lists: A Tale of Three Cities

In another look at audit marketshare, below are the total FY2008 fees, average FY2008 fees per client, and number of clients in three cities—Chicago, Denver and Seattle—based on the city from which the firm is serving a client. That is, the data is grouped on the office of the firm signing off on the client’s financials. This is often the same city as the client’s headquarters, but not always. The data is taken from Ames Research Group’s audit fees database, sourced primarily from DEF-14A proxy statements.

More lists are available on our Auditor Marketshare page.

Fees are listed in $US millions.

Chicago

Firm Total Avg Clients
Deloitte $198.5 $5.7 35
Ernst & Young $128.4 $2.7 47
PricewaterhouseCoopers $101.9 $4.2 24
KPMG $90.3 $3.0 30
Grant Thornton $9.8 $0.8 12
BDO Seidman $6.7 $0.6 12
Blackman Kallick Bartelstein $1.1 $0.4 3
McGladrey & Pullen $0.4 $0.2 2
Plante & Moran $0.3 $0.3 1
Crowe Horwath $0.2 $0.2 1
Virchow Krause & Co. $0.1 $0.1 1
Wipfli $0.1 $0.1 1

Seattle

Firm Total Avg Clients
Deloitte $51.1 $3.6 14
KPMG $39.3 $2.1 19
Ernst & Young $26.8 $3.0 9
PricewaterhouseCoopers $7.8 $1.0 8
Grant Thornton $1.8 $0.5 4
Moss Adams $1.5 $0.4 4
Peterson Sullivan $0.8 $0.2 5
Schwartz Levitsky Feldman $0.3 $0.3 1
McGladrey & Pullen $0.3 $0.3 1

Denver

Firm Total Avg Clients
KPMG $55.2 $3.1 18
Ernst & Young $45.9 $2.7 17
PricewaterhouseCoopers $26.2 $2.9 9
Deloitte $13.7 $1.2 11
Ehrhardt Keefe Steiner Hottman $5.8 $0.3 17
Grant Thornton $4.2 $0.5 8
Hein & Assoc. $2.8 $0.3 11
GHP Horwath $1.2 $0.2 5
BKD $1.0 $1.0 1
Crowe Horwath $0.6 $0.6 1
Causey Demgen & Moore $0.4 $0.2 2
Eide Bailly $0.3 $0.3 1
McGladrey & Pullen $0.1 $0.1 1
Gordon Hughes & Banks $0.1 $0.1 2
Stark Winter Schenkein & Co. $0.1 $0.1 1

April 21, 2008

Ernst & Young International Makes Dramatic Moves

Filed under: Ernst & Young,Firms — psmtoday @ 4:39 pm

The Financial Times calls Ernst & Young’s announcement today “biggest shake-up of the professional services industry since the collapse of Arthur Andersen,” and BDO Stoy Hayward managing partner Jeremy Newman says he is “impressed.”

Ernst & Young announced that 87 country practices in Western and Eastern Europe, the Middle East, India and Africa have proposed merging into a single unit, and 700 partners in 15 Far East countries have announced similar plans for another integrated entity.

Ernst & Young today announces that its Global Executive and the Global Advisory Council approved the proposed integration of all of its 87 country practices in Western and Eastern Europe, the Middle East, India and Africa into a new EMEIA Area. It also confirmed that more than 700 partners in the Far East had supported a similar integration across 15 countries and territories.

The EMEIA Area will operate as a single unit, led by a single executive team and, where allowed by laws and regulations, be underscored by formal combinations of practices. The new Area will be a US$11.2 billion organization with more than 60,000 people. The 3,300 partners of EMEIA will vote on the integration by the end of May. The new EMEIA Area will be effective from 1 July 2008.

The integration of the Far East Area creates a US$1.2 billion organization, with more than 20,000 people. The new structure will also be effective from 1 July 2008.

Mark Otty, currently the head of our UK practice, has been nominated to be the EMEIA Area Managing Partner, while David Sun and Jim Hassett were confirmed as Far East co-Area Managing Partners.

This is unquestionably the proverbial “big deal.”  To those outside the business of following the global audit industry, this might come as surprise, presuming that E&Y is E&Y, whether in the UK, UAE or USA.  The true, of course, is that global Big Four are more unified as brands than as legal, corporate business entities. Ernst & Young’s move here puts nearly (estimated) 95% of its fiscal 2007 global revenues into three entities: EMEIA, 53%; US, 36%; and Far East, 6%.  Along with all the other questions specific to E&Y’s challenge—integration issues, risk management, liability—is how the other Big Four will respond.

March 20, 2008

New E&Y Careers Site

Filed under: Careers,Ernst & Young,Firms — psmtoday @ 2:10 pm

Yesterday, Ernst & Young announced a new careers portal, EY Insight.

As part of Ernst & Young LLP’s ongoing focus to recruit a broad talent base of approximately 10,000 employees this year, the firm has launched EY Insight, a fully interactive careers web site experience that provides engaging, personalized tools for prospective employees. EY Insight can be viewed at www.ey.com/eyinsight/index.html.

The site itself is slickly designed, the epitome of Gen-Y targeting on the Web. One interesting feature, Picture Yourself, is a shopping-cart-like tool to assemble a matrix of academic experience and job interests into potential E&Y career paths.E&Y Picture Yourself“EY 360″ repackages the tried and true “portrait of a young professional” profile and creates a Facebook style snapshot, including “confessions” and a sample daily timeline, complete with a video of a 7:00 AM surfing session before work.

No Matter How Big, Relationships Matter

Filed under: Ernst & Young,Firms,KPMG,Marketshare — psmtoday @ 1:32 pm

In an 8K filed Tuesday, Broadcom announced its dismissal of Ernst & Young and engagement of KPMG. This is a nice win for KPMG, but the more interesting part of the event was one sentence within the filing:

The decision to change auditors was the result of a competitive process, conducted as part of the Company’s ongoing efforts to enhance its corporate governance practices, that was launched in conjunction with the rotation of the lead E&Y audit partner off the Company’s account pursuant to Rule 2-01(c)(6) of Regulation S-X.

That partner rotation rule, part of Sarbanes-Oxley, requires that the lead and concurring partners rotate off engagements every five years. With smaller audit firms and smaller clients, this has been a big deal. Since a small firm has only so many partners to go around, this often means the loss of a client after five years for the reason alone. Among larger firms and clients, however, we have not seen this mentioned in many, if any, auditor changes.

Broadcom had used Ernst & Young since its 1998 IPO, if not longer, meaning it could have been working with the same partner for 10 years. While we have no further information than this on the situation, that mention under these circumstances seems to bring to light the importance of personal relationships, even with a Big Four firm and a billion-dollar client. Through our Quarterly Competitive Summary, we interview hundreds of CFOs every year following auditor changes. Rising fees and independence concerns have been key reasons cited by CFOs for making an auditor change over the past three or four years. But other factors having to do with the relationship, such as previous experience with a firm, have been a constant through the nine years we have done this research. Furthermore, smaller companies say over and over again that they leave, or are left by, the Big Four in order to get more personal service at Crowe Chizek or Grant Thornton.

September 12, 2007

E&Y Sponsors Student Video Competition

Filed under: Careers,Ernst & Young,Firms — psmtoday @ 3:03 pm

Ernst & Young is sponsoring campus video competition with an interesting prize—a business trip with E&Y CEO Jim Turley. The contest asks student teams from more than 75 college campuses to create videos promoting the profession, with the theme, “Why professional services?”

Leading professional services firm
Ernst & Young LLP announced the launch of a video competition for college
students in the U.S. and Canada as part of the firm’s enhanced efforts to
engage and connect with recruits. The competition, titled “Reel Influence,”
allows teams of students to make an impact on their peers, faculty, the
business community, and future recruits by sharing a vision of their career
through video.

Ernst & Young’s press release is available from PRNewsWire.

August 22, 2007

BusinessWeek: “Consulting Pays Off for Accountants Again”

On Monday, BusinessWeek published an article on the new face of the old consulting-services businesses at the Big Four. Specifically, the article discusses Deloitte Consulting and the serendipitous collapse of the deal to spin-off the consulting in March 2003. Since then, Deloitte has continued as the only of the Big Four to have a major consulting practice named as such. E&Y sold its consulting practice to Cap Gemini; KPMG spun-off its consulting business to become BearingPoint; and PwC sold its consulting division to IBM to become part of IBM Global Services. And in the luckiest break of all, Andersen Consulting completed its prolonged and painful departure from Arthur Andersen in August 2000 to become Accenture.
Deloitte bucked the trend by keeping Deloitte Consulting under the same roof. Not only did it retain the business, as the article details, Deloitte has made the consulting business even more integrated with the audit and tax practices.

At Deloitte, partners say consultants are far more intertwined with the rest of the business than ever before, starting with their wallets. The SEC outlawed the practice of paying auditors based on non-audit work. So now Deloitte has one big pool of profit that auditors, tax experts, and consultants all share. Audit partners can still refer business to their consulting counterparts, but they only benefit in a broad sense, no longer directly. “Teaming became our mantra,” says Salzberg. James Quigley, chief executive of the global firm, Deloitte Touche Tohmatsu, says the U.S. firm’s array of services makes it “a category of one.”

But, as the article continues, the rest of the Big Four might quibble with Quigley’s assertion of Deloitte’s singular station in consulting. “And it hasn’t taken long for the other audit firms to do the math, and quickly rebuild their own consulting arms. KPMG Worldwide last year sold $5.3 billion of consulting, a 12% jump from the year before; PricewaterhouseCoopers (PwC) $3.7 billion, up 20%; and Ernst & Young $2.4 billion, a 2% increase.” As a Deloitte consulting executive told me even three years ago, “I know the rest of the firms have consulting, even if they’re aren’t calling it that anymore, because they’re bidding against me for the same consulting work.”

Link: Consulting Pays Off for Accountants Again – BusinessWeek

June 15, 2007

Accounting Camp for High Schoolers

Filed under: Careers,Ernst & Young,Firms — psmtoday @ 9:19 am

Via a posting at JobsInTheMoney, Ernst & Young and the University of Arizona’s Eller College of Management are sponsoring a summer program for minority high school students to promote careers in accounting.

This year, 21 juniors and seniors are staying in UA dorms for a week and getting a taste of both college life and the field of accounting.

“Accounting has a geeky, green eye shade kind of image,” said Mark Stephens, managing partner of the Phoenix office of Ernst & Young, where the students spent Tuesday learning about the company. “We want to share with them how interesting and diverse a field it is.”

Better yet, this is the third year of the program.

May 30, 2007

New Big Four Tax Shelter Investigation at E&Y

Filed under: Ernst & Young,Firms — psmtoday @ 10:49 am

According to Reuters and the AP, two current E&Y partners and two former partners have been indicted in federal court for tax shelters.

In an indictment filed in U.S. district court in Manhattan, prosecutors allege the defendants at the “Big Four” accounting firm created and marketed tax shelters from 1998 through 2004 based on false and fraudulent scenarios to allow wealthy individuals to reduce the federal taxes they would have to pay.

U.S. Attorney Michael Garcia said in a statement that the indictment targets “tax professionals whose deceit costs this country untold millions in tax revenues.”

Both articles noted that E&Y is cooperating with the government investigation and that the group in question has been dissolved. Little was given on the scope of the shelters or how they worked, other than that they were marketed to individuals with taxable incomes of $10 to $20 million. However, the Reuters article said that three of the four partners used a shelter for their personal taxes and, along with eight other E&Y partners, evaded $3.7 million in taxes.

Regardless, this doesn’t seem to of the same scale as the infamous KPMG shelter case.

E&Y on FaceBook.com

Filed under: Careers,Ernst & Young,Firms — psmtoday @ 9:20 am

NPR’s Morning Edition has a brief mention of a new Ernst & Young recruiting tactic, following Gen Y talent to Facebook.com.

“Generation Me.” That’s one term for a generation obsessed with affirmation, iPods and Blackberrys. Companies are doing whatever they can to pull them in. The consulting firm Ernst and Young hopes to hire more than 3,000 entry-level associates this year. So it set up a recruiting page on the social networking site Facebook, featuring video testimonials and blogs. More than six-thousand “friends” are signed up on the site. But the company warns its members to be careful to only post comments if its something they would say at work.

E&Y Facebook page

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