Auditing firms play greater role in GCC countries amid economic reforms
Business Published on: 21 May, 2018 @ 2:28 AM
Since the global financial crisis of 2008, auditing firms in the Middle East, particularly in the Gulf Cooperation Council (GCC) member countries, have moved from revenue-generating economy to productive one, thus playing a greater role.
Their activities expanded from reviewing the financial accounts of companies to assessing the risks and providing consultancy regarding acquisitions and mergers.
They also provide economic, professional and technical consultancy to government bodies thanks to their long experience.
For example, Ernst and Young (EY), a multinational professional service provider headquartered in London, offered essential studies to the Kuwaiti Ministry of Finance on subsidized staples and the privatization of the flag carrier Kuwait Airways Corporation.
EY, one of the world's 'Big Four' accounting firms, provides financial audit, tax, consulting and advisory services to companies, including the public shareholding and private-owned ones.
It offers assurance services, taxation, management consulting, advisory, actuarial, corporate finance and legal services, and provides training for a large number of auditors around the globe.
Deloitte, another member of the Big Four, is considered the largest professional services network in the world by revenue and number of professionals.
Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 263,900 professionals in 150 countries.
Founded by William Welch Deloitte in London in 1845, Deloitte has the largest number of clients amongst FTSE 250 companies in the UK and has the highest market share in auditing among the top 500 companies in India. Price Waterhouse Coopers (PwC), also a 'Big Four' auditor, is the world's second largest professional services firm.
With more than 236,000 staffers, PwC is a network of firms with 743 locations in 158 countries. Nearly 22 percent of its workforce are located in Asia, 26 percent in North America and Caribbean and 32 percent in Western Europe.
Founded in 1998 in London, PwC is considered the most prestigious accounting firm in the world for seven consecutive years and the top firm to work for in North America for three consecutive years.
EY, the third largest auditor, was formed in 1989 in England by a merger of Ernst and Whinney Co., and Arthur Young and Co. The acronym EY was used informally for the firm prior to its official adoption. It has nearly 190,000 workforce in 150 countries.
The fourth big auditor, KPMG, was founded in Amstelveen, the Netherlands, in 1987; it employs 189,000 people in 155 countries.
It has three lines of services - financial audit, tax, and advisory. Its tax and advisory services are further divided into various service groups.
The trading name, KPMG, is the acronym of "Klynveld Peat Marwick Goerdeler; it refers to the merger of KMG (Klynveld Main Goerdeler) with Peat Marwick in 1987.
The Big Four were previously called the 'Big Eight' before shrinking to five and then four through a series of mergers since 2002.
On the advisory role of these companies, Chairman of Kuwait Accountants and Auditors Association (KAAA) Saqer Al-Hees said those firms provide professional and technical consultancy in various fields besides their basic auditing activity.
Since the financial crisis of 2007-2008, the auditing role of these firms has been growing particularly in the field of assessing the financial risks and testing the internal control systems of corporations, he told KUNA.
"It has become clearer that for businesses to continue growing in a sustained way they need to adapt to changes constantly. Hence, the consultancy and auditing services become a crucial consideration," Al-Hees explained.
The auditing firms offer essential economic studies for private and government-owned corporations in the various stages of formation, operation, restructuring, rehabilitation and liquidation.
They set forth strategies and viable plans to ensure effective performance, minimizing costs and maximizing profits as well as good governance, he added.Like