We all know who they are PwC, Deloitte, KPMG & EY who are my least favourite as an Irish person.
EY audited Lehman Bros and more importantly Anglo Irish Bank which cost the Irish Taxpayer about €29 Billion +/- a Million, KPMG deserve a mention in this context since they audited Irish Nationwide Building Society which was in cohoots with Anglo in a variety of accounting gymnastics which cost taxpayers another €5 Billion.
Over the next few weeks I intend to give a bit of background on each of these LLPs, Limited Liability Partnerships. (In a later piece I will explain the significance of this recent corporate setup of LLP)
Apart from all the usual means of research available these days I have delved deeply into these 4 publications.
1)”Bean Counters”(2018) and “The Great Tax Robbery”(2014) both by Richard Brooks.
2) “The Big Four” (2018) by Ian D. How and Stuart Kells.
3) “Moneyland”(2018) by Oliver Bullough.
I have added some peripheral reading below which will help to put in context the negative impact of much of what the Big Four do, eg. Helping those who have most to pay least tax which often results in Governments struggling to provide basic public services, of course those who have most have little interest in or need of public services.
An example of the obscene level of their fees. PwC doing liquidation work on Carillion (whose internal auditors were Deloitte and their external auditors KPMG) were charging Hourly Rates of £1,156 & £1,060 for Partner & Director-level specialists, Senior manager specialists £816. You can see how they easily cranked up £20.4 Million in the first 8 weeks, 57,500 hours at an average of £356 per Hour. (Construction News, 16.08.2018)
“Treasure Islands” (2012) by Nicholas Shaxson… “Spirit Level” (2009), “The Inner Level”(2018) by Richard G Wilkinson, Kate Pickett… “Capital” (2014) Heavy going, by Thomas Picketty… “The Divide” (2018) Jasón Hickel… “Profit Pathology” (2016) Michael Parenti. And finally these 2 perennials that no one should reach maturity without reading. “The Ragged Trousered Philantrophists” (1914/1918) Robert Tressell… “The Jungle”(1904) Upton Sinclair.
The following picture will give you an idea “in numbers” of the worldwide size and possible influence of the Big Four all of whom make the majority of their income from “management services”, eg. Deal Advice, Risk Consultancy, Tax Advice & Mgt Consulting while the minority of their fees come from regular Auditing, in KPMG’s case less than 30%.
The figures below are as accurate as reasonably possible taking into account that the cut off dates vary and the time and effort to get greater accuracy would not contribute to the general picture which the figures portray. I have added figures for the 5th and 6th LLP accounting firms to underline how totally dominant the Big Four are in this area.