PwC set for record revenues as global chief rejects plans for split
The global head of PwC has said the accounting firm is set to post record revenues of around $50bn this year, after speaking out against plans to follow in the footsteps of EY by separating out PwC’s audit and advisory businesses.
In an interview with the Financial Times, PwC global chairman Bob Moritz said the firm is unlikely to follow in the footsteps of EY by splitting up its audit and advice businesses, as he argued PwC’s current model is crucial to attracting staff.
Moritz said the firm feels “comfortable” managing any risks around conflicts-of-interest that may arise from keeping the two sides of the business together, as he argued the model gives PwC a competitive advantage, despite rules restricting sales of advice to audit clients.
The global chairman said PwC should not pursue a split, as it is not seeking to raise capital and there would no first mover advantage either, after Big Four accounting firm EY began pursuing plans to separate its audit and advisory operations earlier this year.
The PwC chief instead said struggles in hiring the right people are currently the main block to the accounting firm’s expansion, as he said the firm’s revenues are set have increased by about 10 per cent to record highs of $50bn for the 12 months up to 30 June.
The comments come after PwC’s headcount increased by 32,000 to heights of 327,000 this year, despite the loss of around 10,000 staff due to the $2.2bn sale of PwC’s global mobility business and the firm’s exit from Russia in response to the war in Ukraine.
Moritz said PwC’s combined model could help the firm keep hold of consultants during recessions by transferring them to its audit division, which generally has more resistant revenues during economic downturns.
However, the PwC chairman failed to entirely rule out a split within his tenure, as he said the firm will be forced to “re-evaluate” any decisions it makes in light of market movements, push from customers, and the impacts any decision would have on PwC’s ability to recruit and retain talent.