Ernst & Young (E&Y) has
combined its Far East and Oceania-based firms to create a single
integrated Asia-Pacific operation with combined annual revenue of
more than $2bn.
The E&Y Asia-Pacific operation
will integrate more than 26,000 staff and 1,200 partners across 20
countries into a single organisational area structure. The
Asia-Pacific practice does not include the network’s large Japanese
firm, which alone pulls in annual revenue of $1.2bn (see pie
If Japan were to be included, Ernst
& Young would be the third-largest accounting network behind
PricewaterhouseCoopers and Deloitte, according to exclusive
research that will be published in International Accounting
Bulletin’s sister publication, Accountancy Asia
(see table, below).
E&Y’s Asia-Pacific integration
is the latest step in the network’s plans to regionalise its firms.
The idea is to manage E&Y’s operations through a centralised
regional leadership model in order to provide a more consistent and
seamless service to clients.
The integration does not go as far
as profit sharing or combining firms into a single legal
As many of the firm’s most
important clients are multinational, this regional approach has
many commercial benefits, although it is not universally popular
among all Asian firms.
Last year, 14 partners walked away
from E&Y’s Philippines firm SyCip Gorres Velayo & Company
amid allegations that E&Y’s Far East management was interfering
in the running the Filipino firm (see Mazars admits Philippines
correspondent). In the Philippines, it is against the law
for non-Filipinos to influence the management and operations of a
local accounting practice.
Fears of regional control also
scuppered recent merger talks between E&Y’s Korean firm Han
Young and KPMG Samjong.
Former E&Y Canada chairman Lou
Pagnutti has been appointed leader of the Asia-Pacific practice and
E&Y Singapore executive chairman Ong Yew Huat is the region’s
chief operating officer.
E&Y Singapore managing partner
Steven Phan said a regional practice mirrors the structure of many
E&Y global chairman and chief
executive Jim Turley added: “This, together with the integration of
our Americas practices in 2006 and that of Europe, the Middle East,
India and Africa in 2008, differentiates us in the marketplace as
the most globally integrated professional services firm.”
Other Big Four firms operate
regional structures to varying degrees of control, while the
mid-tier firm Mazars is a globally integrated partnership with