Likewise, Deloitte North and South Europe (NSE), one of the most successful efforts to form a closer European network, has more than 50,000 employees in 27 countries, under the slogan “stories without borders”. The reality is in the fine print. Neither Deloitte Touche Tohmatsu Limited, the UK parent company, nor Deloitte NSE LLP, provide services to clients and “each of the [DTTL’s] member firms are legally distinct and independent entities ”. Inadvertently, however, EY highlighted the obstacles to further integration of the traditional federated or networked model. Some partners outside of Germany fear that increased integration will mean they will suffer if EY’s German arm is penalized for its audit of the collapsed payment group Wirecard. The response from within EY – that its national companies will keep separate legal entities – simply exposes the regulatory and legal network that blocks any serious restructuring.

As a result, regional networks come and go. KPMG tried to innovate in 2006 with the formation of a European group. He decentralized the network to 19 countries six years later, arguing that difficult business conditions required more local focus. The exception in accounting was the disappearance of Andersen, whose entanglement with Enron ended with the disintegration of the entire global network. Whenever individual regulators threaten to tackle conflicts of interest by dividing the Big Four into separate advisory and audit groups, firms cite the risk of undermining the surviving quartet, the global nature of their business, as obstacles. and the need to share specialized skills between auditors and advisory teams.

The Big Four’s tendency to brag about their global reach, but blame scandals on local bad apples, recalls the aphorism of former Bank of England governor Mervyn King after the financial crisis about “global banks” in life, but national in death ”. However, one way for EY, PwC, Deloitte or KPMG to move towards the objective of operating transparently internationally would be for each to separate and consolidate its consulting activities. Unless and until that happens, Big Four leaders will need to continue forming looser regional integration mocks and rely on good management to alleviate the drawbacks of cross-border federation.

Less justifiable reasons for maintaining national silos include: petty internal feuds between territories; hoarding of resources; and resistance to cost cutting when it undermines strongholds ruled by local Big Four barons, some of whom are treated as minor business celebrities. These obstacles are frustrating for Big Four consultants who want to be as agile and inclusive as their counterparts at Accenture or McKinsey. Strategy and merger consulting knows no borders. But auditors and tax advisers are regulated and confined at the national level.

Source www.ft.com

News Business Highlights

  • Obstacles on the way to Big Four globalization
  • Check out all the news and articles for business news updates.

Disclaimer: If you need to update / edit / delete this news or article, please contact our support team.