Tag: Advisory

PwC, Deloitte Enjoying Their Booming Advisory Businesses, Thankyouverymuch

This morning we linked to a Reuters report about the horse race between Deloitte and PwC for the biggest of the Big 4. It reports virtually nothing new that we haven’t discussed here already including Deloitte jumping P. Dubs last year by a whopping $9 million (thanks mostly to keeping their consulting business in house), the hiring sprees, the acquisitions, and oh! the audit business sucks:

With audit revenues leveling off in developed markets, the firms have been making a push in growing countries such as China and India and plowing ahead with investments in consulting, where business is growing after a recessionary slump.[…] The big four are expected to report their fiscal 2011 revenues in coming weeks and any significant growth will likely once again be in the consulting area, said Jonathan Hamilton, managing editor of Accounting News Report. “The audit business, while certainly the staple of all these firms, is a slow-growth business,” Hamilton added.

In other words, the consulting advisory business is hot and audit is not. And what causes some people to fly off the handle is how the firms have sold everyone on the idea that they can still miraculously be the bastion of good business principles ethics. Well, maybe not everyone:

More worries loom from stepped-up regulatory scrutiny. As consulting revenues grow, complaints are surfacing again that firms will be tempted to go easy on audit clients for the sake of winning or keeping a consulting job — a charge the audit firms deny.

Last week, European Union lawmakers approved a report that calls for barring auditors from providing audit and non-audit services to the same client. The report is nonbinding but could shape a draft law in the works.

PwC and Deloitte both said there was no conflict of interest in the consulting services they provide. Much of their consulting is done for companies they do not audit and they follow regulators’ standards and companies’ own restrictions on the kind of consulting they do for audit clients.

The report doesn’t mention many things that have cropped up (some recent, some not so much) including the nearly 500 reprimands Deloitte had in 2009, the rash of insider trading, or PwC’s incestuous Satyam scandal but talking points are also used to address those issues. These firms didn’t get to where they are without figuring out how to play the media game.

One thing is for sure – the firms are going to depend on their consulting/advisory businesses for growth until someone banishes audit firms from offering any other services at all. And God knows what that will take.

In close race for No 1, Deloitte, PwC grow apace [Reuters]

Engineer Curious to Know if an Advisory Role with PwC or Deloitte Would Be a Good Opportunity

Ed. note: Looking for career guidance from a couple of Big 4 expats or our resident permanently ink-stained wench? Email us at advice@goingconcern.com.

Hello,

I have become an avid reader of your website and need your help regarding an opportunity. I have an engineering background and 5 years of experience in the heavy construction industry specifically oil & gas. In hopes to moving on to something different and possibly working as a consultant I have got a chance to work at PWC and Deloitte in a senior associate advisory role. I do know that these companies are primarily in audit but the sales pitch they gave me was that they were trying to build the Capital Projects Advisory division. Do you all think it is good opportunity?

Sincerely,
Chugga Chugga Choo Choo

Dear Chugs,

As a self-proclaimed avid reader, I hope you caught the post I did in June about the engineering consultant in a similar situation as yours. Check it out for feedback focused on what to do once you start at your new gig in a Big 4’s advisory practice.

That said, you’re asking if the chance to work at the #1 or #2 public accounting firms in the world are “good” opportunities. I follow up your question with one of my own:

If working for #1 or #2 is not a good opportunity, what more are you looking for?

So yes, they are great opportunities to jump start your career into the “consulting” slash advisory biz. Sure, they crank out audits and tax returns, but those are very different revenue generating streams than their advisory practices. To put things in more engineering terms – wary of working in the advisory group of PwC or DT because they perform assurance services is like turning down an aerospace engineering job at GE because they also make light bulbs.

Assuming the offer details are similar, look at each firm’s Capital Projects practices. Which group is more established? Have they made other external hires recently? What is each group’s current market share/focus, and what are long term plans?

Good luck with whichever role you pursue, and welcome to the Big 4 community.

Cheers,
DWB