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Editor's letter: Another year, another dollar

Old habits die hard, and, as we release the World Survey at the start of 2018, it seems PwC is still struggling with simple maths.

According to its 2017 global transparency report, PwC reported $ 16,800m in the Americas region.

PwC USA’s transparency report for the same year states revenues of $ 15,995.8m in the USA; similarly PwC Canada’s 2017 transparency report states revenues of C$ 1,428m in Canada. Using a historical average exchange rate for the year of 0.7534, this is $1,075.8m.

So PwC’s combined Canadian and USA revenues are $17,071.7m – in other words, $271.7m more than that reported for the whole of the Americas region. Aren’t Canada and the USA in the Americas, then?

We asked on 12 January: no answer. Followed up on 15 January: no answer. Followed up again on 23 January, at which point we were forwarded to another PR. Followed up on 25 January, no answer. Followed on 31 January, at which point PwC send us their full submission for the World Survey with a lot of disrepencies with their transparency report.

We followed  once more and at the time of writing – you guessed it – no answer.

If this sounds familiar, something similar happened last year, when PwC reported three different fee incomes in the USA in three different transparency reports for the same year end.

For more on this, read the Editor’s letter And the Oscar goes to... of 6 March 2017. We are still awaiting for answers on those questions.

This is not a great advert for a network that says its purpose is “to build trust in society and solve important problems”. I hear the Oscars are coming up, which should be entertaining.

Growing gap
In other news coming out of the World Survey, the gap between bigger and smaller global networks and associations continues to widen.

In the financial year 2016, $ 527m separated PKF International, ranked 15th, and UHY International, ranked 16th. In FY17, there is a gap of $ 758.9m between them. In FY16, Morison KSi ranked 9th, ahead of IAPA, ranked 10th, by $ 121.2m; in FY17, MSI Global Alliance overtook IAPA to be 10th largest association but the gap between it and Morison KSi is $ 421.4m.

This suggests we should see more firms move, with bigger firms that belong to smaller groups looking to join larger ones. This also raises questions over the sustainability of smaller groups, and whether the market will evolve towards a few truly global networks and associations, with others focusing on regions.

Merry go round in the ranking
Ranking wise, a few changes are worth noting, in particular Nexia International overtaking Baker Tilly international in the 9th spot, and HLB International climbing to number 12 above Kreston International. Pan China International and MGI Worldwide swapped places, with the Chinese-based network climbing to 18th and MGI Worldwide dropping to 20th.

In the associations ranking, Allinial Global’s 42% growth is worth looking at. At number 5, it has caught up with PrimeGlobal, which holds the 4th place by only $ 1.2m, while GGI in 3rd position is only $ 157.1m above Allinial Global promising an interesting battle between those three associations.

Allinial Global’s success came partly at the expenses of IAPA, which lost 17 member firms to Allinial Global after their failed merger. As a result, IAPA dropped out of the top 10.

Bundle of appointments
Last year saw eight leadership changes. We caught up with six of them to gauge their views on the industry and where they want to take their organisations.

Other than that, it’s another year and another dollar. Our rankings might not be perfect, but they are as accurate as participants allow them to be. So here it is – the February issue devoted to the International Accounting Bulletin World Survey.

Hope you enjoy the read and we look forward to your feedback.

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