Ernst & Young Makes Dramatic Moves

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.

— Ernst & Young announces significant globalization moves

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.

Source: ARGI and EY.com

KPMG uses children to recruit people

KPMG establishes IFRS institute in US

KPMG Seeks to Initiate Stakeholder Dialogue
Around Global Accounting Model

NEW YORK, APRIL 22 – KPMG LLP, the audit, tax and advisory firm, today announced the establishment of the KPMG IFRS Institute to raise awareness and address the information needs of companies, investors, academics and others who may be affected by a transition by U.S. companies to International Financial Reporting Standards (IFRS).

“As companies expand their reach and economies globalize, the ability to compare financial statements across borders has become imperative. The question about whether the world is going to global standards is no longer ‘if,’ but ‘when,’”

said Timothy P. Flynn, KPMG LLP chairman and CEO.

The Securities and Exchange Commission (SEC) is expected to issue a rule proposal in the next few weeks outlining the manner, timing, and eligibility for some U.S. public companies to transition from U.S. Generally Accepted Accounting Principles (GAAP) to IFRS.

“We believe a single set of accounting standards used globally will benefit both companies and investors,” Flynn said. “But it is a complex undertaking. As a leading provider of IFRS conversion services outside the United States, we are well aware of the many issues that need to be addressed to enable a graceful transition.The KPMG IFRS Institute will increase awareness about IFRS and give a voice to each participant in the financial reporting process,” he added.

The Institute will hold its inaugural IFRS Web cast on May 1, 2008. It will be hosted by KPMG partner Janice Patrisso, who has been named director of the IFRS Institute.

The SEC has already approved a change in its rules such that foreign private issuers using IFRS as issued by the IASB are no longer required to reconcile their financial statements with U.S. GAAP. The rule applies to financial statements for years ended on or after Nov. 15, 2007, and became effective with financial statements filed on or after March 4, 2008.

“Today, IFRS or a variant is used in more than 100 countries, and most European Union-listed companies are required to use the new reporting standards. Some large U.S. multinationals are already familiar with IFRS, but the majority of U.S. companies are not,” Flynn noted.

Flynn said that the IFRS Institute will be an open forum, interacting with its members and engaged in a variety of activities to facilitate knowledge sharing, exchange leading practices and help promote consistency in the application of IFRS.

Ernst & Young Refreshes Its Visual Brand & Starts New E&Y Careers Site

Ernst & Young this week took the digital wraps off a new look for its website. The firm retains the “Quality in Everything We Do” tagline while modernizing its look.

‘Ernst & Young has strengthened its brand, messaging and positioning, in order to present a more consistent and connected view of Ernst & Young in its interactions with its people, its clients and the wider communities it serves,’ the firm said in a statement.

Accountancy Age first reported the firm’s plans to re-brand in October last year, but this was hotly denied by Ernst &Young’s global press office at the time.

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.

— Press Release: Ernst & Young Personalizes the Job Search for Gen Y with New Interactive Careers Web Site

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.

I wanna become a CFO!

Financial Week (http://www.financialweek.com) announced Special Report Highest Paid CFOs. Major part of CFO compensation nowadays is comprised from Bonuses, Stock options and awards, while salary part remains to be minor and modest.

KPMG and E&Y share audit honour

KPMG and Ernst & Young shared the Auditor of the Year (Big 4) honour at the Real FD/CBI Finance Directors' Excellence Awards (UK) ceremony earlier this week.

The winners of the awards were decided by the results of a nationwide survey of financial directors, which asked detailed questions about customer service levels.

KPMG's head of audit Richard Bennison said he was proud of the fact finance directors rated his firm's services highly for the fourth consecutive year.

"Their views are significant, because they are the people who see their auditors in action at first hand and judge them accordingly," added Mr Bennison.

Grant Thornton was named Auditor of the Year (Outside the Big 4), with Baker Tilly highly commended in the category.

The Advisory Firm of the Year award went to PricewaterhouseCoopers (PWC) for the third time in four years.

Ian Powell, head of advisory services at PWC, said winning the honour was particularly pleasing because it represented recognition from the firm's clients.

Source: GAAPweb

Ernst & Young receives $16 mln back tax claim in Russia

MOSCOW, April 9 (RIA Novosti) - Ernst & Young has received a back tax claim for over 390 million rubles ($16 million) in Russia, following a similar claim pressed against PricewaterhouseCoopers, business daily Kommersant reported on Wednesday.

On April 7, Ernst & Young submitted a statement to a Moscow arbitration court challenging a tax inspectorate decision of December 29, 2007 to charge the company with a back tax claim for 2004, Kommersant said.

According to Kommersant, Ernst & Young Vneshaudit, a Russian subsidiary of the company that is one of the Big Four international auditing firms, along with PricewaterhouseCoopers, Deloitte & Touche and KPMG, arguably transferred most of its revenues to its parent company registered in Cyprus.

The claims were filed immediately after a court upheld similar tax charges against PricewaterhouseCoopers. Tax authorities say both companies breached the terms of their license agreements.

In its tax declaration for 2004, Ernst & Young Audit posted a profit of 10.5 million rubles (about $400,000) while tax authorities established that the company had underrated it by 630.3 million rubles ($24 million).

The company said the sum was for the payment of services rendered by its parent company in Cyprus as personnel had been involved in the audits of Russian clients. However, the tax authorities said the company's claim that payment had been made to consultants outside of Russia was ungrounded.

In a similar case, a court ruled that the Russian subsidiary of PricewaterhouseCoopers had underrated its tax base by over 500 million rubles (about $15 million) in 2002 by transferring money to the Dutch PricewaterhouseCoopers Russia B.V. for services provided by foreign specialists to Russian clients.

Source: RIAN

Bothered with weekends?

"While at school, I was eager for the weekend break. On Tuesday, oh man, - three more days to go,…on Thursday – just one!
While at university, I did not care about the weekend so much, as I did not attend it on regular days anyway.

Right now, I also do not bother much as I’ve got to work on both: the week days and the weekend!"

Original Russian version:
В школе я очень ждал выходных. Во вторник - осталось целых три дня... а в четверг всего один!
В универе мне было все равно, скоро ли выходные. Потому что я и в будни не ходил.
Сейчас мне тоже все равно. Потому что по выходным я работаю тоже.

The Big 4 Private Party announcement

BIG 4 PRIVATE PARTY!
Party to be held exclusively for Big 4 employees !!!!
Feel yourself as a part of a closed society!!!

April 19, 2008!!!
Ukraine, Kyiv, Peremogy Square 1
STATUS PARTY BAR
Ukraine Shopping Mall, 4 floor)

Play: Dj Constantine, Dj Dopio (kiss fm)
Keep in touch

Further details will be provided later...

Original text in Russian:
BIG 4 PRIVATE PARTY
Вечеринка исключительно для Биг 4 !!!!
Почувствуйте себя причастным к закрытому обществу!!! Так отжигают только аудиторы!!!
19 апреля 2008!!! STATUS PARTY BAR (Универмаг Украина, 4 этаж)
Играет Dj Constantine, Dj Dopio (kiss fm)
Keep in touch

KPMG gets family friendly

KPMG has announced a series of measures designed to help the expectant mothers and parents among its workforce.

The Big 4 accountancy firm's My Family Matters initiative includes assistance such as cover for up to 20 days of emergency childcare costs, extending the eligibility criteria for full maternity pay and a mentoring scheme designed to help new mothers.

With rising childcare costs making it increasingly difficult for mothers to be able to afford to return to work on a part-time basis, Sarah Bond, head of diversity at KPMG, said the firm had to take action to ensure it continues to retain its talented female staff.

"Our returner rates from maternity leave are high - but with signs that pressures will only grow in the future, we recognise the need to keep on evolving our package of support,"

explained Ms Bond.

Source: GAAPweb