PwC says more tech is solution for higher audit standards

LONDON: The Big Four accounting firms can invest in technology that will raise standards beyond what could be achieved by smaller rivals, the head of PricewaterhouseCoopers (PwC) said, defending the top firms against UK calls to be broken up.

British lawmakers want the country’s competition watchdog to consider forcing PwC, EY, KPMG and Deloitte, the four accounting firms that check the books of most blue chip companies globally, to separate out their audit and consultancy operations.

This, the lawmakers said earlier this year, would provide a better focus on raising standards to ensure auditors flag company difficulties before collapses like at retailer BHS and outsourcer Carillion in Britain.

“Various people are providing this relatively easy answer to split up the firms, but we do not support it,” PwC global chairman Bob Moritz told Reuters.

PwC, which employs over 250,000 people, will have invested a bil dollars on “Cloud” computing by 2019, a huge sum that firms outside the Big Four would find hard to match.

Such advanced technology will mean harvesting far more data from a company to ensure accounts face tougher “checks and balances” to meet the criticisms over audit standards from policymakers, Moritz said.

Any intervention in the market must be “well thought out” given it would b e watched closely by the rest of the world, he added.

Moritz was speaking as PwC announced record annual revenues of US$41.3bil for its year ended June 30, making it the second largest accounting firm in the world, behind Deloitte, whose latest annual revenues topped US$43bil. — Reuters