pwc

PwC (officially PricewaterhouseCoopers) is a global professional services firm

headquartered in London, United Kingdom.[2] It is the world's second-largest professional
services firm (after Deloitte) and one of the "Big Four" accountancy firms.[5]

It has offices in 757 cities across 154 countries and employs over 161,000 people.[4][6] It
had total revenues of $26.6 billion in 2010, of which $13 billion was generated by its
Assurance practice, $7 billion by its Tax practice and $6 billion by its Advisory practice.[4]

The firm was formed in 1998 by a merger between Price Waterhouse and Coopers &
Lybrand.[1] The trading name was shortened to PwC in September 2010 as part of a
major rebranding exercise.[7]

As of 2010 it was the seventh largest privately-owned organisation in the United States.
[8]

Contents
[hide]

• 1 History
o 1.1 Price Waterhouse
o 1.2 Coopers & Lybrand
o 1.3 Merger
o 1.4 Recent history

• 2 Global structure
• 3 Services
o 3.1 Global
o 3.2 Consulting activities

• 4 Major clients
• 5 Name and branding
o 5.1 Logos

• 6 Staff
• 7 Criticisms
o 7.1 Willie Nelson
o 7.2 ChuoAoyama Suspension
o 7.3 Tyco settlement
 o 7.4 Satyam case
o 7.5 Apparent involvement in controversial court proceedings in Russia
o 7.6 Other punishments and criticisms
o 7.7 Transneft Russia case

• 8 Notable current and former employees

o 8.1 Business
o 8.2 Politics and public service
o 8.3 Other

• 9 Offices
• 10 References
• 11 Further reading

• 12 External links

[edit]History

The firm was created by the merger of two large firms, Price Waterhouse and Coopers &
Lybrand in 1998.[1] These two firms each have histories dating back to the nineteenth
century.

[edit]Price Waterhouse
Samuel Lowell Price, an accountant, started his practice in London in 1849.[9] 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.[9] (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 and is the new site for the Shard London Bridge) in London.

By the late nineteenth century, Price Waterhouse had gained significant recognition as
an accounting firm. As a result of trade between the United Kingdom and the United
States of America, Price Waterhouse opened an office in New York in 1890,[9] and the
American firm itself soon expanded rapidly. The original British firm opened an office
in Liverpool in 1904[9] and then elsewhere in the United Kingdom and countries abroad,
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.[9]
In a further effort to take advantage of economies of scale, PW and Arthur Andersen had
discussed a merger in 1989[10] 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.

In March 2002, Arthur Anderson,LLP affiliates in Hong Kong and China completed talks
to join PriceWaterhouseCoopers, China.[11]

[edit]Coopers & Lybrand

In 1854 William Cooper established his own practice in London, which became Cooper
Brothers seven years later when his three brothers joined.[1]

In the USA in 1898, Robert H. Montgomery, William M. Lybrand, Adam A. Ross Jr. and
his brother T. Edward Ross formed Lybrand, Ross Brothers and Montgomery.[1] Coopers
& Lybrand is the result of a merger in 1957 between Cooper Brothers & Co; Lybrand,
Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co.[1] In 1990 in
certain countries including the UK Coopers & Lybrand merged with Deloitte Haskins &
Sells to become Coopers & Lybrand Deloitte,[1] in 1992 renamed Coopers & Lybrand.[12]

[edit]Merger

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.[13]

[edit]Recent history
By the late 1980s the firm had created 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.[14]

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.[15]
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".[16] 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."[17] 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.[18]

[edit]Global structure
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[19]-based company which provides
co-ordination. Dennis Nally, the former Chairman of the US firm, became Chairman of
PwC International on July 1, 2009.[3]

[edit]Services

[edit]Global

PricewaterhouseCoopers has three main service lines:[20]

 Assurance Services,
 Tax Advisory, (international tax planning and compliance with local tax laws,
human resource consulting, and transfer pricing)
 Advisory - mainly consulting activities which covers Strategy, Performance
Improvement, Transactions Services, Business Recovery Services, Corporate
Finance, Business Valuation, and Crisis Management in a range of specialist areas
such as accountancy andactuarial advisory.

PwC's service lines face the market in each country by broad industry specialisations
such as:

 Consumer and Industrial Products and Service (CIPS),[21]

 Financial Services (FS),[22]
  Technology, Information, Communications and Entertainment (TICE),[23]
 Infrastructure, Government and Utilities (IG&U)[24]

These sub-divisions may vary slightly in some territories.

[edit]Consulting activities
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.[25]

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.[26]

PwC serves the U.S. Federal Government through their Public Sector practice. PwC has
over 2000 professionals based in the Washington Metro Corridor.[27]

[edit]Major clients
Europe and North America account for about 81% of PwC's annual revenue,[28] with
Europe alone accounting for 45%.[28] The firm's dominant practice, auditing, accounts for
over 50% of PwC's revenue.[20]

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.[29]

PwC audits 40 per cent of companies in the FTSE 100 Index[30] and 45 per cent of
the Fortune 1000 energy companies.[31]

[edit]Name and branding

The firm's name arose from the merger of Price Waterhouse and Coopers & Lybrand in
1998.

On 20 September 2010, PricewaterhouseCoopers became officially known as PwC, with

the announcement of a brand repositioning, including a new logo.[7] The new logo was
designed with the assistance of Wolff Olins.[32]
“PwC” refers to PricewaterhouseCoopers LLP which is a member firm of
PricewaterhouseCoopers International Limited, each member firm of which is a separate
legal entity.

[edit]Logos

Current and past logos of PwC and merged companies.

Current PwC Logo

Logo of PwC before its 2010 rebranding.

The PW logo before the 1998 merger

The C&L logo before the merger

[edit]Staff
Because PricewaterhouseCoopers' only product is the output of its employees, the firm
has a competitive recruiting program. PricewaterhouseCoopers was recently included
in Fortune's "100 Best Companies to Work For" list, coming in at number 58 in 2009.
[33]
In the UK the company has been voted number one in the Times Top 100 Graduate
Employers for 7 consecutive years.[34]PricewaterhouseCoopers is one of the top 10
companies for working mothers.[35] Training is also a top priority, and in 2010 PwC
captured top honors on Training Magazine's "Top 125" list for the third consecutive year,
becoming the first company ever to achieve a "three-peat."[36] In October 2008,
PricewaterhouseCoopers was named one of "Canada's Top 100 Employers" by
Mediacorp Canada Inc., and was featured in Maclean's newsmagazine. Later that
month, PricewaterhouseCoopers was also named one of Greater Toronto's Top
Employers, which was announced by the Toronto Star newspaper.
[37]
PricewaterhouseCoopers in Ireland was named as the winner of the Best Company to
Work for in Ireland 2008 by the Great Place to Work Institute in their annual list of
Ireland's top employers.[38]

[edit]Criticisms

[edit]Willie Nelson
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.[39] The lawsuit was settled for an undisclosed amount.[40]

[edit]ChuoAoyama Suspension
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 suspended ChuoAoyama following a suspicious audit of
cosmetics company Kanebo in which three of the firm's partners allegedly assisted with
accounting fraud and boosted earnings for the company by about $1.9 billion over the
course of five years. The accountants involved were reprimanded by the Tokyo District
Court but escaped prison time after a judge deemed them to have played a "passive
role" in the crime.[41]

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.[42] Misuzu was
dissolved in July, 2007.[43]

[edit]Tyco settlement
In July 2007, PwC agreed to pay $229 million to settle a class-action lawsuit brought by
shareholders of Tyco International Ltd. over a multibillion-dollar accounting fraud.[44]

[edit]Satyam case
In January 2009 PwC was criticised,[45][46][47][48][49][50] along with the promoters of Satyam,
an Indian IT firm listed on the NASDAQ, in a $1.5 billion fraud.[51] 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.[52] PwC's U.S. arm
"was the reviewer for the U.S. filings for Satyam."[53] Consequently, lawsuits have been
filed in the U.S. with PwC as a defendant.[54] Two partners of PricewaterhouseCoopers,
Srinivas Talluri and Subramani Gopalakrishnan, have been charged by India’s Central
Bureau of Investigation in connection with theSatyam 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.[55]

[edit]Apparent involvement in controversial court proceedings

in Russia
In November 2010 The New York Times reported that PwC had been assisting the
Russian Government with prosecutions in relation to alledged 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."[56]

A cable from the U.S. embassy in Moscow stated that the trial was politically motivated
and that a deposition in a U.S. 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."[57]Russian authorities were investigating PwC for
tax evasion, but suspended the investigation once the audits were withdrawn.[58]

[edit]Other punishments and criticisms

India's accounting standards agency ICAI is investigating partners of PwC
for professional negligence[46] 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.[59][60][61] PwC
was also associated with the accounting scandal at DSQ Software[62] in India. In July
2006, PwC’s Japanese affiliate Chuo Aoyama was handed a two-month ban.
[46]
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."[63] 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.[64]
Satyam scandal
From Wikipedia, the free encyclopedia

The Satyam Computer Services scandal was publicly announced on 7 January 2009,
when Chairman Ramalinga Raju confessed that Satyam's accounts had been falsified.

Contents
[hide]

• 1 Details
• 2 Aftermath
• 3 New CEO and special advisors
• 4 Acquisition by Mahindra Group
• 5 Restatement of Results
• 6 See also
• 7 References

• 8 External links

[edit]Details

On 7 January 2009, company Chairman Ramalinga Raju resigned after notifying board
members and the Securities and Exchange Board of India (SEBI) that Satyam's
accounts had been falsified [1][2][3].

Raju confessed that Satyam's balance sheet of 30 September 2008 contained:

 inflated figures for cash and bank balances of 5,040 crore (US$1.09 billion) as
against 5,361 crore (US$1.16 billion) reflected in the books.
 an accrued interest of 376 crore (US$81.59 million) which was non-existent.
 an understated liability of 1,230 crore (US$266.91 million) on account of funds
was arranged by himself.
 an overstated debtors' position of 490 crore (US$106.33 million) (as against
2,651 crore (US$575.27 million) in the books).

Raju claimed in the same letter that neither he nor the managing director had benefited
financially from the inflated revenues. He claimed that none of the board members had
any knowledge of the situation in which the company was placed.[4][5]
He stated that:

What started as a marginal gap between actual operating profit and the one reflected in the books
of accounts continued to grow over the years. It has attained unmanageable proportions as the
size of company operations grew significantly (annualized revenue run rate of
11,276 crore (US$2.45 billion) in the September quarter of 2008 and official reserves of
8,392 crore (US$1.82 billion)). As the promoters held a small percentage of equity, the concern
was that poor performance would result in a takeover, thereby exposing the gap. The aborted
Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. It was like
riding a tiger, not knowing how to get off without being eaten.

[edit]Aftermath

Raju had appointed a task force to address the Maytas situation in the last few days
before revealing the news of the accounting fraud. After the scandal broke, the then-
board members elected Ram Mynampati to be Satyam's interim CEO. Mynampati's
statement on Satyam's website said:

"We are obviously shocked by the contents of the letter. The senior leaders of Satyam
stand united in their commitment to customers, associates, suppliers and all
shareholders. We have gathered together at Hyderabad to strategize the way forward in
light of this startling revelation."

On 10 January 2009, the Company Law Board decided to bar the current board of
Satyam from functioning and appoint 10 nominal directors. "The current board has failed
to do what they are supposed to do. The credibility of the IT industry should not be
allowed to suffer." said Corporate Affairs Minister Prem Chand Gupta. Chartered
accountants regulator ICAI issued show-cause notice to Satyam's
auditor PricewaterhouseCoopers (PwC) on the accounts fudging. "We have asked PwC
to reply within 21 days," ICAI President Ved Jain said.

On the same day, the Crime Investigation Department (CID) team picked up Vadlamani
Srinivas, Satyam's then-CFO, for questioning. He was arrested later and kept in judicial
custody[6].

On 11 January 2009, the government nominated noted banker Deepak Parekh,

former NASSCOM chief Kiran Karnik and former SEBI member C Achuthan to Satyam's
board.

Analysts in India have termed the Satyam scandal India's own Enron scandal.[7]. Some
social commentators see it more as a part of a broader problem relating to India's caste-
based, family-owned corporate environment (http://kafila.org/2009/02/13/the-caste-of-a-
scam-a-thousand-satyams-in-the-making/).

Immediately following the news, Merrill Lynch now a part of Bank of America and State
Farm Insurance terminated its engagement with the company. Also, Credit
Suisse suspended its coverage of Satyam.[citation needed]. It was also reported that Satyam's
auditing firm PricewaterhouseCoopers will be scrutinized for complicity in this scandal.
SEBI, the stock market regulator, also said that, if found guilty, its license to work in India
may be revoked.[8][9][10][11][12] Satyam was the 2008 winner of the coveted Golden Peacock
Award for Corporate Governance under Risk Management and Compliance Issues,
[13]
which was stripped from them in the aftermath of the scandal.[14] The New York Stock
Exchange has halted trading in Satyam stock as of 7 January 2009.[15] India's National
Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-
share index on 12 January.[16] The founder of Satyam was arrested two days after he
admitted to falsifying the firm's accounts. Ramalinga Raju is charged with several
offences, including criminal conspiracy, breach of trust, and forgery.

Satyam's shares fell to 11.50 rupees on 10 January 2009, their lowest level since March
1998, compared to a high of 544 rupees in 2008[17]. In New York Stock
Exchange Satyam shares peaked in 2008 at US$ 29.10; by March 2009 they were
trading around US $1.80.

The Indian Government has stated that it may provide temporary direct or indirect
liquidity support to the company. However, whether employment will continue at pre-
crisis levels, particularly for new recruits, is questionable [18].

On 14 January 2009, Price Waterhouse, the Indian division of PricewaterhouseCoopers,

announced that its reliance on potentially false information provided by the management
of Satyam may have rendered its audit reports "inaccurate and unreliable"[19].

On 22 January 2009, CID told in court that the actual number of employees is only
40,000 and not 53,000 as reported earlier and that Mr. Raju had been allegedly
withdrawing INR 20 crore rupees every month for paying these 13,000 non-existent
employees [20].

[edit]New CEO and special advisors

On 5 February 2009, the six-member board appointed by the Government
of India named A. S. Murthy as the new CEO of the firm with immediate effect. Murthy,
an electrical engineer, has been with Satyam since January 1994 and was heading the
Global Delivery Section before being appointed as CEO of the company. The two-day-
long board meeting also appointed Homi Khusrokhan (formerly with Tata Chemicals)
and Partho Datta, a Chartered Accountant as special advisors [21][22].

[edit]Acquisition by Mahindra Group

On 13th April 2009, via a formal public auction process, a 46% stake in Satyam was
purchased by Mahindra & Mahindra owned company Tech Mahindra, as part of its
diversification strategy. Effective July 2009, Satyam rebranded its services under the
new Mahindra management as "Mahindra Satyam" with a new corporate website
www.MahindraSatyam.com.

C.P Gurnani is the current CEO.

[edit]Restatement of Results
As a result of the scandal, under the directions of the new Mahindra management team,
Satyam Computer Services restated its financial results for the period 2002 to 2008.
These restated r