(trading as PwC)
Type Member firms have different legal structures; both UK and US firms are limited liability partnerships Industry Professional services Founded 1998
(Coopers & Lybrand)
Headquarters London, United Kingdom Area served Worldwide Key people Dennis Nally (Chairman) Products Assurance
Revenue US$29.2 billion (FY 2011) Employees Approximately 175,000 Website pwc.com
PwC (officially 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.
- 1 Name and branding
- 2 History
- 3 Legal structure
- 4 Operations
- 5 Criticisms
- 6 Notable current and former employees
- 7 References
- 8 Further reading
- 9 External links
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 Olins.
Each member firm of PwC is a separate legal entity under the umbrella of PricewaterhouseCoopers International Limited.
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 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.
Samuel Lowell Price, 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.
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 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.
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.
The legal structure of a limited liability partnership (LLP) 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 jurisdictions. The senior partners of member firms sit on a global board of partners 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.
Actuarial, advisory and tax
PricewaterhouseCoopers has three main service lines:
- Assurance Services,
- Tax Advisory, (international tax planning and compliance with local tax laws, customs, human resource consulting, and transfer pricing)
- 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.
PwC's service lines face the market in each country by broad industry specialisations such as:
- Consumer and Industrial Products and Service (CIPS),
- Financial Services (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.
PwC has developed several broader consulting initiatives in the Enterprise Risk Management (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.
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, gives PwC the unique distinction of having been (in various incarnations) the tabulator and certifier of votes for the Academy Awards since 1934.
PwC has offices in 757 cities across 154 countries.
Some notable PwC office buildings
In 1990, the 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.
From 2000 to 2006, PwC's affiliate of assurance service in Japan was ChuoAoyama Audit Corporation (中央青山監査法人 Chūō-Aoyama Kansa Hōjin ). In May 2006, the Financial Services Agency of Japan suspended ChuoAoyama from provision of some statutory auditing service for two months 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.
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.
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 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.
In November 2010, The New York Times 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.
Other punishments and criticisms
India's accounting standards agency ICAI 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.
Transneft Russia case
The construction of the ESPO (East Siberia-Pacific Ocean) pipeline by Transneft 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.
Notable current and former employees
- Barbara Cassani, former CEO of Go Fly and former chairman of the London 2012 Olympic committee.
- Cynthia Cooper, internal auditor, WorldCom accounting scandal whistle blower
- Robert Dart, Prominent Canadian businessman and philanthropist
- David Gill, Chairman of Manchester United F.C.
- Margaret Jackson, Chairman of Qantas (2000–2007)
- Phil Knight, Co-founder and Chairman of Nike
- Frederick Henderson, Former CEO of General Motors
- Henry Staunton, Finance Director of ITV plc (2003–present)
- Eugene Tenenbaum, managing director of Millhouse Capital UK Ltd
- Min Zhu, co-founder of WebEx
- John P. Surma, Chairman and CEO of U.S. Steel
Politics and public service
- William Reynolds Archer, Jr., US Representative from Texas's 7th Congressional District (1971–2001), and former Chairman of House Ways and Means Committee (1995–2001).
- Steven Ciobo, member of the Australian House of Representatives (2001–present)
- John Frullo, member of the Texas House of Representatives from Lubbock, worked for Cooopers & Lybrand in Denver, Colorado
- Justine Greening, Conservative Member of Parliament of the United Kingdom (2005–present)
- David Heathcoat-Amory, Conservative Member of Parliament of the United Kingdom (1983–2010)
- Mark Hoban, Conservative Member of Parliament of the United Kingdom (2001–present)
- John Liu, member of the New York City Council and New York City Comptroller (2001–present)
- Jeffrey Lucy, chairman of the Australian Securities and Investments Commission (2004–07)
- Charlie McCreevy, Irish Minister for Finance (1997–2004), EU Commissioner (2004–present)
- Robert McNamara, United States Secretary of Defense (1961–68); President of the World Bank (1968–81)
- Morten Andreas Meyer, Norwegian Minister of Modernisation (2001–05)
- Ron Miller, Chief Information Officer, Federal Emergency Management Agency (2001–2002)
- Francis Plowden, laymember of the Judicial Appointments Commission
- John Stuttard, Lord Mayor of the City of London (2006)
- Paul Szabo, Member of the Canadian House of Commons (1993–present)
- Hugo Teufel III former Chief Privacy Officer, Department of Homeland Security (2006–2009)
- Stephen Williams, Liberal Democrat Member of Parliament of the United Kingdom (2005–present)
- Peadar Andrews, Gaelic footballer
- Keith Bradshaw, cricketer
- Edwin Flack, Australian athlete
- Geoffrey Lehmann, Australian poet
- Marisha Pessl, writer
- Prannoy Roy, Indian journalist
- Enrique Sarasola, Spanish industrialist
- Thomas M. Sullivan, talk show host
- Josh Lewsey, England Rugby player and world cup winner
- ^ a b c d e f g "Chronology". PricewaterhouseCoopers. http://www.ukmediacentre.pwc.com/Company-history/Chronology-14.aspx. Retrieved 27 September 2010.
- ^ a b "How we are structured". PricewaterhouseCoopers. http://www.pwc.com/extweb/service.nsf/docid/8A601D5FA74A7CEA85257013006558DF. Retrieved 27 September 2010.
- ^ "Our leadership team". PricewaterhouseCoopers. http://www.pwc.com/gx/en/leadership/leadership-team.jhtml. Retrieved 25 October 2011.
- ^ a b c d Espinoza, Javier (11 July 2011). "PwC Chairman Aims to Keep Millennials Happy". The Wall Street Journal. http://online.wsj.com/article/SB10001424052702303365804576434223787503598.html. Retrieved 7 August 2011.
- ^ PwC reports record $29.2 billion revenue, regains lead, Reuters, 3 October 2011. Retrieved 4 October 2011.
- ^ "Global Annual Review 2011 - Facts and figures". PricewaterhouseCoopers. http://www.pwc.com/gx/en/annual-review/facts-figures.jhtml?WT.mc_id=syndication_10-11_gar-media-box-modal-gx_gar-facts. Retrieved 25 October 2011.
- ^ a b "Logo puts case first and last". The Australian. 20 September 2010. http://www.theaustralian.com.au/business/media/logo-puts-case-first-and-last/story-e6frg996-1225926437285. Retrieved 27 September 2010.
- ^ "Ten Largest Private Companies In America". Forbes. 1 November 2010. http://www.forbes.com/2010/11/01/top-10-private-cargill-business-private-companies-10-largest_slide_8.html. Retrieved 3 January 2011.
- ^ Logos in the news
- ^ ICAEW: Firms family trees
- ^ ICAEW family trees
- ^ a b c d e Accounting for Success: a History of Price Waterhouse in America 1890–1990. Harvard Business School Press. ISBN 9780875843285.
- ^ University of Washington: Accounting firms and organisations
- ^ Price Waterhouse and Coopers & Lybrand to merge Weekly Corporate Growth Report 29 September 1997
- ^ Ernst & Young sells consulting unit to Cap Gemini Cnet News, 29 February 2000
- ^ Hewlett-Packard drops PWC bid BBC News, 13 November 2000
- ^ Andersen Affiliates in China to Join Rival Singapore News, 21 March 2002
- ^ Monday:
- ^ Monday name change for PwC, BBC News, June 10, 2002.
- ^ IBM buying PricewaterhouseCoopers' consulting business Technology, 31 July 2002
- ^ PricewaterhouseCoopers International Limited
- ^ Nally named Global Chair of PwC Accountancy Age, 17 March 2009
- ^ a b PWC Global Review 2007 Page 34
- ^ PWC: CIPS
- ^ PWC: FS
- ^ PWC: TICE
- ^ PWC: G&PS
- ^ PWC: PCS
- ^ PWC: How managing political risk improves global financial performance
- ^ Actuarial & Insurance Management Solutions
- ^ Public Sector practice
- ^ a b PricewaterhouseCoopers 2008 revenues rose 10% to $28.2 billion
- ^ PricewaterhouseCoopers to safeguard Hollywood's biggest secret for 72nd year
- ^ KPMG closes FTSE 100 gap on PWC Accountancy Age, 13 December 2007
- ^ PWC: Energy, utilities and mining
- ^ "Willie Nelson Hopes for a Hit; So Does the I.R.S". New York Times. September 2, 1991. http://query.nytimes.com/gst/fullpage.html?res=9D0CEFD7113FF931A3575AC0A967958260&sec=&spon=&pagewanted=all. "$32 million bill for delinquent taxes ... pay for the $45 million lawsuit Mr. Nelson filed last year against his former accountants at Price Waterhouse, who he contends put him into ill-advised tax shelters. The Government ruled against many of the tax shelters, and the I.R.S. later disallowed many of the tax benefits that Mr. Nelson claimed."
- ^ "Tax Shelter of Rich and Famous Has Final Date in Court". The New York Times. November 4, 1995. http://query.nytimes.com/gst/fullpage.html?res=9D04E6DF1739F937A35752C1A963958260.
- ^ CPAs in Kanebo fraud avoid prison, The Japan Times (registration required), Aug. 10, 2006.
- ^ Jim Frederick (2006-05-15). "Japan's Regulators Get Tough". Time. http://www.time.com/time/magazine/article/0,9171,1194088,00.html#ixzz1IokjSHHm.
- ^ Rocky road for new accounting firm, The Daily Yomiuri, Sep. 2, 2006.[dead link]
- ^ New Japanese Internal Controls Framework Fraud Magazine, November/December 2007
- ^ Pricewaterhouse to pay $225 mln in Tyco settlement
- ^ Satyam scandal rattles confidence in accounting Big Four
- ^ a b PwC's fate Hangs in Balance
- ^ ICAI to seek explanation from Satyam’s auditor PwC
- ^ Satyam auditor says examining chairman's statement
- ^ What happens to PWC, The Auditor For Satyam?
- ^ Satyam: Auditors' body to pull up PwC ICAI to seek explanation from Satyam’s auditor PwC
- ^ Satyam: A Rs 7,000cr Lie
- ^ PWC says Satyam audit opinions may be unreliable
- ^ Satyam Said to Draw SEC Scrutiny in Accounting Case
- ^ Pomerantz Law Firm Charges Satyam's Auditors With Securities Law Violations
- ^ Raghavendra Verma, Keith Nuthall (2009-04-08). "PwC partners charged over Satyam". Accountancy Age. http://www.accountancyage.com/accountancyage/news/2240046/styam-partners-charged. Retrieved 2010-03-01.
- ^ New York Times issue of November 6, 2010, business columnist Joe Nocera
- ^ "Khodorkovsky Case Discussed in Leaked Cable". The Moscow Times. December 3, 2010. http://www.themoscowtimes.com/news/article/khodorkovsky-case-discussed-in-leaked-cable/425531.html. Retrieved December 28, 2010.
- ^ Wilson, Tony (January 4, 2010). "Rule of law crucial for safe investment". The Globe and Mail (Toronto). http://www.theglobeandmail.com/report-on-business/your-business/start/tony-wilson/rule-of-law-crucial-for-safe-investment/article1856706/. Retrieved January 4, 2010.
- ^ RBI lifts ban on PwC
- ^ PwC has a chequered past with taxmen
- ^ Regulator may blacklist Price Waterhouse
- ^ Third mess-up by PwC after GTB, DSQ Soft
- ^ Investor group wants Sebi to supersede Satyam board
- ^ Regulator probes PwC over Cattles audit
- ^ Pricewaterhouse Russia and Transneft
- ^ a b "Transneft Accused Of Stealing $4 Billion". The St. Petersburg Times. November 19, 2010. http://www.times.spb.ru/index.php?story_id=32970&action_id=2. Retrieved December 28, 2010.
- ^ "Silencing the Whistleblower". The Moscow Times. December 14, 2010. http://www.themoscowtimes.com/opinion/article/silencing-the-whistleblower/426247.html.
- ^ "DJB run by World Bank". The Hindu (Chennai, India). 29 July 2005. http://www.hindu.com/2005/07/29/stories/2005072918690300.htm.
- ^ "On Privatisation of Delhi Jal Board". http://www.cpim.org/node/1384.
- ^ "World Bank Comments on Delhi Jal Board's TOR". http://www.delhijalboard.nic.in/djbdocs/reform_project/docs/docs/doc_project_prep_docs/pdf/correspondence/06_12_1999.pdf.
- ^ "Delhi Jal Board Rocked By Another Major Scam". http://www.countercurrents.org/jafri190611.htm.
- ^ Adam Jones, Auditors criticised for role in financial crisis, Financial Times, 30 March 2011
- 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
Big Four auditors
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