PwC
Encyclopedia
PricewaterhouseCoopers is a global professional services
firm headquartered in London
, United Kingdom
. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy
firms.
PwC has offices in 757 cities across 154 countries and employs over 175,000 people. It had total revenues of $29.2 billion in FY 2011, of which $14.14 billion was generated by its Assurance practice, $7.63 billion by its Tax practice and $7.46 billion by its Advisory practice.
The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse. The trading name was shortened to PwC in September 2010 as part of a major rebranding exercise.
PwC was the seventh-largest privately-owned organization in the United States
.
.
Each member firm of PwC is a separate legal entity under the umbrella of PricewaterhouseCoopers International Limited.
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 the United States.
In 1957 Cooper Brothers; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co, agreed to adopt the name Coopers & Lybrand in international practice. In 1973 the three member firms in the UK, US and Canada changed their names to Coopers & Lybrand. In 1990 in certain countries including the UK Coopers & Lybrand merged with Deloitte Haskins & Sells to become Coopers & Lybrand Deloitte, in 1992 renamed Coopers & Lybrand.
, an accountant
, founded an accountancy practice in London in 1849. In 1865 Price went into partnership with William Hopkins Holyland
and Edwin Waterhouse
. Holyland left shortly after to work alone in accountancy and the firm was known from 1874 as Price, Waterhouse & Co. (The comma was dropped from the name much later.) The original partnership agreement, signed by Price, Holyland and Waterhouse could be found in Southwark Towers
, one of PwC's important legacy offices (now demolished).
By the late nineteenth century, Price Waterhouse had gained significant recognition as an accounting firm. As a result of growing trade between the United Kingdom and the United States, Price Waterhouse opened an office in New York
in 1890, and the American firm itself soon expanded rapidly. The original British firm opened an office in Liverpool
in 1904 and then elsewhere in the United Kingdom and worldwide, each time establishing a separate partnership in each country: the worldwide practice of PW was therefore a federation of collaborating firms that had grown organically rather than being the result of an international merger.
In a further effort to take advantage of economies of scale
, PW and Arthur Andersen
discussed a merger in 1989 but the negotiations failed mainly because of conflicts of interest such as Andersen's strong commercial links with IBM
and PW's audit of IBM.
After the merger the firm had a large professional consulting
branch, as did other major accountancy firms, generating much of its fees. Management Consulting Services (MCS) was the fastest growing and often most profitable area of the practice, though it was cyclical. The major cause for growth in the Nineties was the implementation of complex integrated ERP
systems for multi-national companies.
However, PwC came under increasing pressure to avoid conflicts of interests by not providing consulting services to its audit clients. Since it audited a large proportion of the world's largest companies, this was beginning to limit its potential market. These conflicts were going to increase when additional services such as the outsourcing
of ERP systems were offered. For these reasons, in 2000, Ernst & Young
was the first of the Big Four
to sell its consulting services, to Capgemini
.
PwC therefore planned to capitalize on MCS's rapid growth through its sale to Hewlett Packard (for a reported $17 billion) but negotiations broke down in 2000.
In March 2002, Arthur Anderson
,LLP affiliates in Hong Kong and China completed talks to join PriceWaterhouseCoopers, China.
PwC announced in May 2002 that its consulting activities would be spun off as an independent entity. An outside consultancy, Wolff Olins
, was hired to create a brand
image for the new entity, called "Monday". The firm's CEO, Greg Brenneman
described the unusual name as "a real word, concise, recognizable, global and the right fit for a company that works hard to deliver results." These plans were soon revised, however. In October 2002, PwC sold the entire consultancy business to IBM for approximately $3.9 billion in cash and stock. PwC's consultancy business was absorbed into IBM Global Business Services, increasing the size and capabilities of IBM's growing consulting practice.
is very different from that of a Corporation, and as such the global firm is in fact a collection of member firms, that are run autonomously in their respective jurisdiction
s. The senior partners of member firms sit on a global board of partner
s and there is also an 'umbrella' company called PricewaterhouseCoopers International Limited, a UK-based company which provides co-ordination. Dennis Nally, the former Chairman of the US firm, became Chairman of PwC International on July 1, 2009.
PwC's service lines face the market in each country by broad industry specialisations such as:
These sub-divisions may vary slightly in some territories.
(ERM) framework, including a global effort to assist corporations with outsourcing, as well as a global political risk assessment with the political risk advisory firm Eurasia Group
.
Advisory services offered by PwC also include two actuarial
consultancy departments; Actuarial and Insurance Management Solutions (AIMS) and a sub branch of "Human Resource Services" (HRS). Actuarial covers mainly 4 areas: pensions, life insurance
, non-life insurance
and investments. AIMS deals with life and non-life insurance and investments while HRS deals mainly with pensions.
PwC serves the US Federal Government through their Public Sector practice. PwC has over 2000 professionals based in the Washington Metro Corridor.
One client, the Academy of Motion Picture Arts and Sciences
, gives PwC the unique distinction of having been (in various incarnations) the tabulator and certifier of votes for the Academy Awards
since 1934.
PwC audits 40% of companies in the FTSE 100 Index
and 45% of the Fortune 1000
energy companies.
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 shelter
s that were later disallowed by the IRS. The lawsuit was settled for an undisclosed amount.
following the collapse of cosmetics company Kanebo of which three of the firm's partners were found assisting with accounting fraud for boosting earnings by the company of about $1.9 billion over the course of five years. The accountants got suspended prison terms up to eighteen months from the Tokyo District Court after the judge deemed them to have played a "passive role" in the crime. The suspension was the first ever imposed on a major accounting firm in the country. Many of the firm's largest clients were forced to find replacement auditors before the suspension began that July.
Shortly after the suspension of ChuoAoyama (中央青山監査法人), PwC acted quickly to stem any possible client attrition as a result of the scandal. It set up the PricewaterhouseCoopers Aarata, and some of ChuoAoyama's accountants (but most of the international divisions) moved to the new firm. ChuoAoyama resumed operations on September 1 under the Misuzu name. However, by this point the two firms combined had 30% fewer clients than did ChuoAoyama prior to its suspension. Misuzu was dissolved in July, 2007.
The chief executive and chief financial officer of Tyco were found guilty of looting $600 million from the company.
, in a $1.5 billion fraud. PwC has written 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. 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.
reported that PwC had been assisting the Russian Government with prosecutions in relation to alleged tax evasion at Yukos
stating "...Then, in 2007, with the prospect of parole on the horizon, the same prosecutors — with what appears to be the complicity of PricewaterhouseCoopers, Yukos
’s longtime accounting firm — indicted the two men (Mikhail B. Khodorkovsky and Platon Lebedev
), again, bringing a new round of Kafkaesque charges."
A cable from the US embassy in Moscow stated that the trial was politically motivated and that a deposition in a US court by PricewaterhouseCoopers may show that PwC was pressured by the Russian government to withdraw its prior Yukos audits. An embassy source noted that if the audits were not properly withdrawn it "would greatly tarnish PWC's international reputation." Russian authorities were investigating PwC for tax evasion, but suspended the investigation once PwC withdrew the Yukos audits.
is investigating partners of PwC for professional negligence in the now-defunct Global Trust Bank Ltd. case of 2007. Like Satyam, Global Trust Bank was also based in Hyderabad. This led to Reserve Bank of India
banning PwC from auditing any financial company for over a year. PwC was also associated with the accounting scandal at DSQ Software in India. Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanently and seize its assets in India alleging few more scandals like "Ketan Parekh stock manipulations." The Accountancy and Actuarial Discipline Board, which regulates the profession in the UK, announced an inquiry in July 2009 into PwC's auditing of Cattles
, the struggling sub-prime lender that failed to keep track of its bad debts.
was estimated to cost in excess of US$13 billion. A leaked report of the Audit Chamber of the Russian Federation indicated that the total amount stolen and siphoned from the company during construction through various mechanisms and schemes reaches up to USD 4 billion.
A Moscow Times editorial stated that one of the chamber’s auditors attempted “damage control” by saying in effect, “Yes, money was stolen, but not as much the media reported.” PricewaterhouseCoopers (PwC) was Transneft’s auditor and denied wrongdoing saying “We believe there are absolutely no grounds for such allegations, and we stand behind our work."
Professional services
Professional services is an industry of infrequent, technical, or unique functions performed by independent contractors or by consultants whose occupation is the rendering of such services....
firm headquartered in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy
Accountancy
Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in...
firms.
PwC has offices in 757 cities across 154 countries and employs over 175,000 people. It had total revenues of $29.2 billion in FY 2011, of which $14.14 billion was generated by its Assurance practice, $7.63 billion by its Tax practice and $7.46 billion by its Advisory practice.
The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse. The trading name was shortened to PwC in September 2010 as part of a major rebranding exercise.
PwC was the seventh-largest privately-owned organization in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
Name and branding
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 and introduced a new logo, although the legal name of the firm remained PricewaterhouseCoopers. The new logo was designed with the assistance of Wolff OlinsWolff Olins
Wolff Olins is a brand consultancy, based in London, New York City and Dubai. It employs 150 designers, strategists and account managers, and has been part of the Omnicom Group since 2001.-History:...
.
Each member firm of PwC is a separate legal entity under the umbrella of PricewaterhouseCoopers International Limited.
History
The firm was created by the merger of two large firms, Price Waterhouse and Coopers & Lybrand in 1998. These two firms each have histories dating back to the nineteenth century.Coopers & Lybrand
In 1854 William CooperWilliam Cooper (accountant)
William Cooper was an English accountant. He is best known for having founded the accountancy practice of Cooper Brothers that now forms part of PricewaterhouseCoopers....
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 the United States.
In 1957 Cooper Brothers; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co, agreed to adopt the name Coopers & Lybrand in international practice. In 1973 the three member firms in the UK, US and Canada changed their names to Coopers & Lybrand. In 1990 in certain countries including the UK Coopers & Lybrand merged with Deloitte Haskins & Sells to become Coopers & Lybrand Deloitte, in 1992 renamed Coopers & Lybrand.
Price Waterhouse
Samuel Lowell PriceSamuel Lowell Price
Samuel Lowell Price was an English accountant. He is best known for having co-founded, with William Hopkins Holyland and Edwin Waterhouse, the accountancy practice of Price Waterhouse that now forms part of PricewaterhouseCoopers.-Career:...
, an accountant
Accountant
An accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
, founded an accountancy practice in London in 1849. In 1865 Price went into partnership with William Hopkins Holyland
William Hopkins Holyland
William Hopkins Holyland was an English accountant. He is best known for having co-founded, with Samuel Lowell Price and Edwin Waterhouse, the accountancy practice of Price Waterhouse that now forms part of PriceWaterhouseCoopers.-Career:...
and Edwin Waterhouse
Edwin Waterhouse
Edwin Waterhouse was an English accountant. He is best known for having co-founded, with Samuel Lowell Price and William Hopkins Holyland, the accountancy practice of Price Waterhouse that now forms part of PricewaterhouseCoopers...
. Holyland left shortly after to work alone in accountancy and the firm was known from 1874 as Price, Waterhouse & Co. (The comma was dropped from the name much later.) The original partnership agreement, signed by Price, Holyland and Waterhouse could be found in Southwark Towers
Southwark Towers
Southwark Towers was a high rise building at 32 London Bridge Street, designed by tp bennett architects, overlooking London Bridge station, in Southwark, London. It was 100 metres tall and had 25 floors in three wings...
, one of PwC's important legacy offices (now demolished).
By the late nineteenth century, Price Waterhouse had gained significant recognition as an accounting firm. As a result of growing trade between the United Kingdom and the United States, Price Waterhouse opened an office in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
in 1890, and the American firm itself soon expanded rapidly. The original British firm opened an office in Liverpool
Liverpool
Liverpool is a city and metropolitan borough of Merseyside, England, along the eastern side of the Mersey Estuary. It was founded as a borough in 1207 and was granted city status in 1880...
in 1904 and then elsewhere in the United Kingdom and worldwide, each time establishing a separate partnership in each country: the worldwide practice of PW was therefore a federation of collaborating firms that had grown organically rather than being the result of an international merger.
In a further effort to take advantage of economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
, PW and Arthur Andersen
Arthur Andersen
Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations...
discussed a merger in 1989 but the negotiations failed mainly because of conflicts of interest such as Andersen's strong commercial links with IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
and PW's audit of IBM.
1998 to present
In 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers (written with a lowercase 'w') in an attempt to gain a scale that would put the new firm in a different league.After the merger the firm had a large professional consulting
Consultant
A consultant is a professional who provides professional or expert advice in a particular area such as management, accountancy, the environment, entertainment, technology, law , human resources, marketing, emergency management, food production, medicine, finance, life management, economics, public...
branch, as did other major accountancy firms, generating much of its fees. Management Consulting Services (MCS) was the fastest growing and often most profitable area of the practice, though it was cyclical. The major cause for growth in the Nineties was the implementation of complex integrated ERP
Enterprise resource planning
Enterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
systems for multi-national companies.
However, PwC came under increasing pressure to avoid conflicts of interests by not providing consulting services to its audit clients. Since it audited a large proportion of the world's largest companies, this was beginning to limit its potential market. These conflicts were going to increase when additional services such as the outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
of ERP systems were offered. For these reasons, in 2000, Ernst & Young
Ernst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
was the first of the Big Four
Big Four auditors
The Big Four are the four largest international professional services networks in accountancy and professional services, which handle the vast majority of audits for publicly traded companies as well as many private companies, creating an oligopoly in auditing large companies...
to sell its consulting services, to Capgemini
Capgemini
Capgemini is a French global IT services company, one of the world's largest management consulting, outsourcing and professional services companies with a staff of 114,274 operating in 40 countries. It is headquartered in Paris and was founded in 1967 by Serge Kampf, the current chairman, in...
.
PwC therefore planned to capitalize on MCS's rapid growth through its sale to Hewlett Packard (for a reported $17 billion) but negotiations broke down in 2000.
In March 2002, Arthur Anderson
Arthur Anderson
Arthur Anderson may refer to:*Arthur Anderson , Scottish businessman and co-founder of the Peninsular and Oriental Steam Navigation Company *Arthur E. Andersen , founder of Chicago-based accounting firm...
,LLP affiliates in Hong Kong and China completed talks to join PriceWaterhouseCoopers, China.
PwC announced in May 2002 that its consulting activities would be spun off as an independent entity. An outside consultancy, Wolff Olins
Wolff Olins
Wolff Olins is a brand consultancy, based in London, New York City and Dubai. It employs 150 designers, strategists and account managers, and has been part of the Omnicom Group since 2001.-History:...
, was hired to create a brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
image for the new entity, called "Monday". The firm's CEO, Greg Brenneman
Greg Brenneman
Gregory D. Brenneman is the Chairman of CCMP Capital, a private equity firm. Most recently, Brenneman had served as president and CEO of CCMP-owned Quiznos Sub, a fast-food sandwich chain. Brenneman also serves on the board of directors of The Home Depot, Inc...
described the unusual name as "a real word, concise, recognizable, global and the right fit for a company that works hard to deliver results." These plans were soon revised, however. In October 2002, PwC sold the entire consultancy business to IBM for approximately $3.9 billion in cash and stock. PwC's consultancy business was absorbed into IBM Global Business Services, increasing the size and capabilities of IBM's growing consulting practice.
Legal structure
The legal structure of a limited liability partnership (LLP)Limited liability partnership
A limited liability partnership is a partnership in which some or all partners have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important...
is very different from that of a Corporation, and as such the global firm is in fact a collection of member firms, that are run autonomously in their respective jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
s. The senior partners of member firms sit on a global board of partner
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
s and there is also an 'umbrella' company called PricewaterhouseCoopers International Limited, a UK-based company which provides co-ordination. Dennis Nally, the former Chairman of the US firm, became Chairman of PwC International on July 1, 2009.
Assurance, advisory and tax
PricewaterhouseCoopers has three main service lines:- Assurance Services,
- Tax AdvisoryTax lawTax law is the codified system of laws that describes government levies on economic transactions, commonly called taxes.-Major issues:Primary taxation issues facing the governments world over include;* taxes on income and wealth...
, (international tax planning and compliance with local tax laws, customs, human resource consulting, and transfer pricingTransfer pricingTransfer pricing refers to the setting, analysis, documentation, and adjustment of charges made between related parties for goods, services, or use of property . Transfer prices among components of an enterprise may be used to reflect allocation of resources among such components, or for other...
) - AdvisoryAdvice (opinion)Advice is a form of relating personal or institutional opinions, belief systems, values, recommendations or guidance about certain situations relayed in some context to another person, group or party often offered as a guide to action and/or conduct...
- 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 actuarialActuarial scienceActuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are professionals who are qualified in this field through education and experience...
advisory.
PwC's service lines face the market in each country by broad industry specialisations such as:
- Consumer and Industrial Products and Service (CIPS),
- Financial ServicesFinancial servicesFinancial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
(FS), - Technology, Information, Communications and Entertainment (TICE),
- Infrastructure, Government and Utilities (IG&U)
- Private Company Services (PCS)
These sub-divisions may vary slightly in some territories.
Consulting
PwC has developed several broader consulting initiatives in the Enterprise Risk ManagementEnterprise Risk Management
Enterprise risk management in business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives...
(ERM) framework, including a global effort to assist corporations with outsourcing, as well as a global political risk assessment with the political risk advisory firm Eurasia Group
Eurasia Group
-Overview:Eurasia Group is best known as the world's largest political risk consultancy with offices in New York, Washington, London, and Tokyo and more than 125 full-time employees...
.
Advisory services offered by PwC also include two actuarial
Actuary
An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries provide expert assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms ....
consultancy departments; Actuarial and Insurance Management Solutions (AIMS) and a sub branch of "Human Resource Services" (HRS). Actuarial covers mainly 4 areas: pensions, life insurance
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, non-life insurance
Casualty insurance
Casualty insurance, often equated to liability insurance, is used to describe an area of insurance not directly concerned with life insurance, health insurance, or property insurance. It is mainly used to describe the liability coverage of an individual or organization's for negligent acts or...
and investments. AIMS deals with life and non-life insurance and investments while HRS deals mainly with pensions.
PwC serves the US Federal Government through their Public Sector practice. PwC has over 2000 professionals based in the Washington Metro Corridor.
Major clients
Europe and North America account for about 81% of PwC's annual revenue, with Europe alone accounting for 45%. The firm's dominant practice, auditing, accounts for over 50% of PwC's revenue.One client, the Academy of Motion Picture Arts and Sciences
Academy of Motion Picture Arts and Sciences
The Academy of Motion Picture Arts and Sciences is a professional honorary organization dedicated to the advancement of the arts and sciences of motion pictures...
, gives PwC the unique distinction of having been (in various incarnations) the tabulator and certifier of votes for the Academy Awards
Academy Awards
An Academy Award, also known as an Oscar, is an accolade bestowed by the American Academy of Motion Picture Arts and Sciences to recognize excellence of professionals in the film industry, including directors, actors, and writers...
since 1934.
PwC audits 40% of companies in the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....
and 45% of the Fortune 1000
Fortune 1000
Fortune 1000 is a reference to a list maintained by the American business magazine Fortune. The list is of the 1000 largest American companies, ranked on revenues alone...
energy companies.
Offices
PwC has offices in 757 cities across 154 countries.Willie Nelson
In 1990, the Internal Revenue ServiceInternal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
seized most of the assets of Willie Nelson
Willie Nelson
Willie Hugh Nelson is an American country music singer-songwriter, as well as an author, poet, actor, and activist. The critical success of the album Shotgun Willie , combined with the critical and commercial success of Red Headed Stranger and Stardust , made Nelson one of the most recognized...
, claiming he owed $32 million in back taxes, including penalties and interest. He sued Price Waterhouse, contending that they put him into tax shelter
Tax shelter
Tax shelters are any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments...
s that were later disallowed by the IRS. The lawsuit was settled for an undisclosed amount.
ChuoAoyama Suspension
From 2000 to 2006, PwC's affiliate of assurance service in Japan was . In May 2006, the Financial Services Agency of Japan suspended ChuoAoyama from provision of some statutory auditing service for two monthsfollowing the collapse of cosmetics company Kanebo of which three of the firm's partners were found assisting with accounting fraud for boosting earnings by the company of about $1.9 billion over the course of five years. The accountants got suspended prison terms up to eighteen months from the Tokyo District Court after the judge deemed them to have played a "passive role" in the crime. The suspension was the first ever imposed on a major accounting firm in the country. Many of the firm's largest clients were forced to find replacement auditors before the suspension began that July.
Shortly after the suspension of ChuoAoyama (中央青山監査法人), PwC acted quickly to stem any possible client attrition as a result of the scandal. It set up the PricewaterhouseCoopers Aarata, and some of ChuoAoyama's accountants (but most of the international divisions) moved to the new firm. ChuoAoyama resumed operations on September 1 under the Misuzu name. However, by this point the two firms combined had 30% fewer clients than did ChuoAoyama prior to its suspension. Misuzu was dissolved in July, 2007.
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.
Satyam case
In January 2009 PwC was criticised, along with the promoters of Satyam, an Indian IT firm listed on the NASDAQNASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
, in a $1.5 billion fraud. PwC has written 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. 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
Central Bureau of Investigation
The Central Bureau of Investigation is a government agency of India that serves as a criminal investigation body, national security agency and intelligence agency. It was established on 1 April 1963 and evolved from the Special Police Establishment founded in 1941...
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.
Yukos prosecutions
In November 2010, The New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
reported that PwC had been assisting the Russian Government with prosecutions in relation to alleged tax evasion at Yukos
YUKOS
OJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
stating "...Then, in 2007, with the prospect of parole on the horizon, the same prosecutors — with what appears to be the complicity of PricewaterhouseCoopers, Yukos
YUKOS
OJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
’s longtime accounting firm — indicted the two men (Mikhail B. Khodorkovsky and Platon Lebedev
Platon Lebedev
Platon Leonidovich Lebedev is a former CEO of Group Menatep, currently imprisoned in Russia, and is best known as a close associate of Mikhail Khodorkovsky.-Conviction:...
), again, bringing a new round of Kafkaesque charges."
A cable from the US embassy in Moscow stated that the trial was politically motivated and that a deposition in a US court by PricewaterhouseCoopers may show that PwC was pressured by the Russian government to withdraw its prior Yukos audits. An embassy source noted that if the audits were not properly withdrawn it "would greatly tarnish PWC's international reputation." Russian authorities were investigating PwC for tax evasion, but suspended the investigation once PwC withdrew the Yukos audits.
Other punishments and criticisms
India's accounting standards agency ICAIInstitute of Chartered Accountants of India
The Institute of Chartered Accountants of India is a national professional accounting body of India. It was established on 1 July 1949 as a body corporate under the Chartered Accountants Act, 1949 enacted by the Constituent Assembly of India to regulate the profession of Chartered Accountancy in...
is investigating partners of PwC for professional negligence in the now-defunct Global Trust Bank Ltd. case of 2007. Like Satyam, Global Trust Bank was also based in Hyderabad. This led to Reserve Bank of India
Reserve Bank of India
The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...
banning PwC from auditing any financial company for over a year. PwC was also associated with the accounting scandal at DSQ Software in India. Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanently and seize its assets in India alleging few more scandals like "Ketan Parekh stock manipulations." The Accountancy and Actuarial Discipline Board, which regulates the profession in the UK, announced an inquiry in July 2009 into PwC's auditing of Cattles
Cattles
Cattles plc is a British consumer finance company based in Batley, West Yorkshire. It is listed on the London Stock Exchange and is a former constituent of the FTSE 250 Index.-History:...
, the struggling sub-prime lender that failed to keep track of its bad debts.
Transneft Russia case
The construction of the ESPO (East Siberia-Pacific Ocean) pipeline by TransneftTransneft
Transneft is a Russian state-owned business responsible for the national oil pipelines. It was founded in 1993 and owns the largest oil pipeline system in the world, with a total network length of almost...
was estimated to cost in excess of US$13 billion. A leaked report of the Audit Chamber of the Russian Federation indicated that the total amount stolen and siphoned from the company during construction through various mechanisms and schemes reaches up to USD 4 billion.
A Moscow Times editorial stated that one of the chamber’s auditors attempted “damage control” by saying in effect, “Yes, money was stolen, but not as much the media reported.” PricewaterhouseCoopers (PwC) was Transneft’s auditor and denied wrongdoing saying “We believe there are absolutely no grounds for such allegations, and we stand behind our work."
Delhi Jal Board Criticism
It has been alleged that PriceWaterhouseCoopers (PWC) was involved in the erroneous assessment of Sustainable Sewage and Water Management Project for National Capital Territory of Delhi, India. Due to public outcry and RTI's (Right To Information Act) documents and subsequent appeals, the project was dropped.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.Business
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and former chairman of the London 2012 Olympic committee. - Cynthia CooperCynthia Cooper (WorldCom)Cynthia Cooper is a native of Clinton, Mississippi who formerly served as the Vice President of Internal Audit at WorldCom. In 2002, Cooper and her team of auditors worked together and often at night and in secret to investigate and unearth $3.8 billion in fraud at WorldCom. At the time, this was...
, internal auditor, WorldCom accounting scandal whistle blower - Robert DartRobert DartMember of several prestigious Canadian Board of Directors. Born on May 10, 1938. Married to Jane Dart.- Current Positions :* Vice Chair and Director, Wittington Investments Limited* Director, Holt, Renfrew & Co., Limited...
, Prominent Canadian businessman and philanthropistPhilanthropistA philanthropist is someone who engages in philanthropy; that is, someone who donates his or her time, money, and/or reputation to charitable causes... - David GillDavid Gill (executive)David Alan Gill is British football executive, currently Chief Executive of Manchester United F.C. and a board member of the Football Association...
, Chairman of Manchester United F.C.Manchester United F.C.Manchester United Football Club is an English professional football club, based in Old Trafford, Greater Manchester, that plays in the Premier League. Founded as Newton Heath LYR Football Club in 1878, the club changed its name to Manchester United in 1902 and moved to Old Trafford in 1910.The 1958... - Margaret JacksonMargaret JacksonMargaret Jackson, AC is an Australian corporate executive.Jackson was born in Warragul, Victoria, and studied at Warragul High School. She graduated with a Bachelor of Economics degree from Monash University and a Master of Business Administration from the University of Melbourne...
, Chairman of QantasQantasQantas Airways Limited is the flag carrier of Australia. The name was originally "QANTAS", an initialism for "Queensland and Northern Territory Aerial Services". Nicknamed "The Flying Kangaroo", the airline is based in Sydney, with its main hub at Sydney Airport...
(2000–2007) - Phil KnightPhil KnightPhilip Hampson "Phil" Knight is an American business magnate. He is the co-founder and Chairman of Nike, Inc. He resigned as the company's chief executive officer in 2004, while retaining the position of chairman of the board...
, Co-founder and Chairman of NikeNike, Inc.Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area... - Frederick HendersonFrederick HendersonFrederick Arthur "Fritz" Henderson was President and Chief Executive Officer of General Motors. Prior to his appointment as CEO on March 31, 2009, Henderson was the Vice President of General Motors and has been with the company since 1984...
, Former CEO of General MotorsGeneral MotorsGeneral Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010... - Henry StauntonHenry StauntonHenry Staunton , is a British businessman and the former Finance Director of Granada Group and ITV plc.Named in The Times 2006 Power 100 survey, and rated as one of the UK's top 50 finance movers and shakers by Accountancy Age, Staunton is an "experienced finance professional" and "well regarded...
, Finance Director of ITV plcITV plcITV plc is a British media company that operates 12 of the 15 regional television broadcasters that make up the ITV Network, the oldest and largest commercial terrestrial television network in the United Kingdom...
(2003–present) - Eugene TenenbaumEugene TenenbaumEugene Tenenbaum is currently the Managing Director of MHC-Services Ltd., in London and serves on the board of directors of Chelsea Football Club, Evraz Group SA and Highland Gold Mining Limited....
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, co-founder of WebExWebExWebEx Communications Inc. is a Cisco company that provides on-demand collaboration, online meeting, web conferencing and videoconferencing applications... - John P. SurmaJohn P. SurmaJohn P. Surma is the chief executive officer and chairman of the board of United States Steel Corporation.-Biography:Surma received his bachelor’s in accounting in 1976 from Pennsylvania State University, following which he joined Price Waterhouse, in 1987, he was admitted as a partner...
, Chairman and CEO of U.S. SteelU.S. SteelThe United States Steel Corporation , more commonly known as U.S. Steel, is an integrated steel producer with major production operations in the United States, Canada, and Central Europe. The company is the world's tenth largest steel producer ranked by sales...
Politics and public service
- William Reynolds Archer, Jr.William Reynolds Archer, Jr.William Reynolds “Bill” Archer, Jr. is a former American lawyer and politician. Archer served two terms, from 1967 to 1971, in the Texas House of Representatives — changing from the Democratic to the Republican party in 1969 — and later represented Texas in the United States House as a Republican...
, US Representative from Texas's 7th Congressional District (1971–2001), and former Chairman of House Ways and Means Committee (1995–2001). - Steven CioboSteven CioboSteven Ciobo , Australian politician, has been a Liberal member of the Australian House of Representatives since November 2001 representing the Division of Moncrieff, Queensland....
, member of the Australian House of RepresentativesAustralian House of RepresentativesThe House of Representatives is one of the two houses of the Parliament of Australia; it is the lower house; the upper house is the Senate. Members of Parliament serve for terms of approximately three years....
(2001–present) - John FrulloJohn FrulloJohn Frullo is a businessman from Lubbock, Texas, who is a conservative Republican member of the Texas House of Representatives from District 84, and a member of the Tea Party Caucus. Since 1993, Frullo has owned Midtown Printing Company in Lubbock...
, member of the Texas House of RepresentativesTexas House of RepresentativesThe Texas House of Representatives is the lower house of the Texas Legislature. The House is composed of 150 members elected from single-member districts across the state. The average district has about 150,000 people. Representatives are elected to two-year terms with no term limits...
from LubbockLubbock, TexasLubbock is a city in and the county seat of Lubbock County, Texas, United States. The city is located in the northwestern part of the state, a region known historically as the Llano Estacado, and the home of Texas Tech University and Lubbock Christian University...
, worked for Cooopers & Lybrand in Denver, ColoradoDenver, ColoradoThe City and County of Denver is the capital and the most populous city of the U.S. state of Colorado. Denver is a consolidated city-county, located in the South Platte River Valley on the western edge of the High Plains just east of the Front Range of the Rocky Mountains... - Justine GreeningJustine GreeningJustine Greening is a Conservative Party politician in the United Kingdom. She has been the Member of Parliament for Putney since 2005. She was appointed Economic Secretary to the Treasury in May 2010, and became Secretary of State for Transport on 14 October 2011...
, ConservativeConservative Party (UK)The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
Member of Parliament of the United KingdomParliament of the United KingdomThe Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...
(2005–present) - David Heathcoat-AmoryDavid Heathcoat-AmoryDavid Philip Heathcoat-Amory is a British politician, accountant and farmer. He was the Conservative Member of Parliament for Wells from 1983 until he lost his seat in the 2010 general election.-Education and professional life:...
, Conservative Member of Parliament of the United Kingdom (1983–2010) - Mark HobanMark HobanMark Gerard Hoban MP is a British Conservative Party politician and the Member of Parliament for Fareham, and the Financial Secretary to the Treasury.-Early life:...
, Conservative Member of Parliament of the United Kingdom (2001–present) - John LiuJohn LiuJohn Chun Liu is a New York City elected official, currently serving as New York City Comptroller. Liu previously served on the New York City Council representing District 20...
, member of the New York City CouncilNew York City CouncilThe New York City Council is the lawmaking body of the City of New York. It has 51 members from 51 council districts throughout the five boroughs. The Council serves as a check against the mayor in a "strong" mayor-council government model. The council monitors performance of city agencies and...
and New York City Comptroller (2001–present) - Jeffrey LucyJeffrey LucyJeffrey John Lucy AO is the former Chairman of the Australian Securities and Investments Commission , Australia's Capital Markets and Corporations Regulator. He is the first non-lawyer Chairman of ASIC...
, chairman of the Australian Securities and Investments CommissionAustralian Securities and Investments CommissionThe Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
(2004–07) - Charlie McCreevyCharlie McCreevyCharles "Charlie" McCreevy is a former Irish politician. He was the European Commissioner for Internal Market and Services from 2004–2010. He was first elected to Dáil Éireann as a Fianna Fáil TD in 1977 and held the seat in Kildare until 2004 when he became Ireland's European Commissioner...
, Irish Minister for FinanceMinister for Finance (Ireland)The Minister for Finance is the title held by the Irish government minister responsible for all financial and monetary matters. The office-holder controls the Department of Finance and is considered one of the most important members of the Government of Ireland.The current Minister for Finance is...
(1997–2004), EU Commissioner (2004–present) - Robert McNamaraRobert McNamaraRobert Strange McNamara was an American business executive and the eighth Secretary of Defense, serving under Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, during which time he played a large role in escalating the United States involvement in the Vietnam War...
, United States Secretary of DefenseUnited States Secretary of DefenseThe Secretary of Defense is the head and chief executive officer of the Department of Defense of the United States of America. This position corresponds to what is generally known as a Defense Minister in other countries...
(1961–68); President of the World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
(1968–81) - Morten Andreas MeyerMorten Andreas MeyerMorten Andreas Meyer is a Norwegian politician for the Conservative Party.In 2001, when the second cabinet Bondevik held office, Meyer was appointed State Secretary in the Ministry of Local Government and Regional Development. He held this post until 2003, but became Minister of Labour and...
, Norwegian Minister of Modernisation (2001–05) - Ron MillerRon Miller (politician)Ron Miller is an American politician and businessman from the U.S. state of Maryland. He lives in Huntingtown, Maryland, and is the communications director for the Calvert County Republican Central Committee. He served in the United States Air Force from 1983–1992, attaining the rank of Captain...
, Chief Information Officer, Federal Emergency Management AgencyFederal Emergency Management AgencyThe Federal Emergency Management Agency is an agency of the United States Department of Homeland Security, initially created by Presidential Reorganization Plan No. 1 of 1978 and implemented by two Executive Orders...
(2001–2002) - Francis PlowdenFrancis PlowdenFrancis John Plowden is a lay member of the Judicial Appointments Commission.Plowden is Chairman of the Greenwich Foundation for the Old Royal Naval College and Chairman of the National Council for Palliative Care. He was a partner at PricewaterhouseCoopers until 2001, where he was responsible for...
, laymember of the Judicial Appointments CommissionJudicial Appointments CommissionThe Judicial Appointments Commission is responsible for selecting judges in England and Wales. It is a non-departmental public body which was created on 3 April 2006 as part of the reforms following the Constitutional Reform Act 2005... - John StuttardJohn StuttardSir John Boothman Stuttard is an English chartered accountant and was the Lord Mayor of the City of London in 2006/2007.-Early life:...
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former Chief Privacy Officer, Department of Homeland SecurityChief Privacy Officer, Department of Homeland SecurityChief Privacy Officer, Department of Homeland Security is an appointed position within the United States Department of Homeland Security, which is part of the federal government of the United States in the United States.- Dual Title :...
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Member of Parliament of the United Kingdom (2005–present)
Other
- Peadar AndrewsPeadar AndrewsPeadar Andrews is an Irish Gaelic footballer who played for Dublin. He was part of the 2005 Dublin team that beat Laois to become the 2005 Leinster Champions and was in the panel for Dublins second Leinster Championship in a row against Offaly in July 2006. He plays his club football for St...
, Gaelic footballer - Keith Bradshaw, cricketer
- Edwin Flack, Australian athlete
- Geoffrey LehmannGeoffrey lehmannGeoffrey Lehmann is an Australian poet, children's writer, and tax lawyer. Lehmann grew up in McMahon's Point, Sydney, and attended high school at the Shore School in North Sydney. He graduated in Arts and Law from the University of Sydney in 1960 and 1963 respectively...
, Australian poet - Marisha PesslMarisha PesslMarisha Pessl is an American writer best known for her debut novel, Special Topics in Calamity Physics.Pessl was born in Clarkston, Michigan, to Klaus, an Austrian engineer for General Motors, and Anne, an American homemaker. Pessl's parents divorced when she was three, and she moved to Asheville,...
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Further reading
- True and Fair: A History of Price Waterhouse, Jones, E., 1995, Hamish Hamilton, ISBN 0-241-00172-2
- An Early History of Coopers & Lybrand, 1984, Garland Publishing Inc., ISBN 978-0-8240-6319-1