Price Waterhouse Coopers

???? 12/9/2009 Intermediate Accounting

Price Waterhouse Coopers (PwC) is an accounting firm, the 5th largest privately held business in the US ("Pricewaterhousecoopers us audit," 2009) and one of the worlds largest professional service firms. ("Pricewaterhousecoopers: company profile," 2009). It is one of the four dominate global accounting firms which also includes: Deloitte Touche Tohmatsu, Ernst and Young International, and KPMG International. Its other major competitors are BDO International B.V., The Boston Consulting Group, Grant Thornton International, Deloitte Consulting and The Management Network Group, Inc. ("Pricewaterhousecoopers: company
profile," 2009).

Price Waterhouse Coopers has a long history. It can trace its origin back to two firms. Both firms began in London during the mid-nineteenth century. Price Waterhouse was founded in 1850 by Samuel Lowell Price, who wanted to take advantage of Englands recent parliamentary laws requiring the examination of a companys financial records.
("Pricewaterhousecoopers - company"). In 1865, Edwin Waterehouse became Prices partner. A

number of years later William Cooper started his own firm. Both firms went through several mergers and transitions and became two of the big six accounting firms. They ultimately merged together in 1998 and formed Price Waterhouse Coopers. ("Pricewaterhousecoopers us
audit," 2009).

Its three main divisions are assurance, advisory, and tax services. In 2008, its assurance division provided half of its revenues followed by the tax and advisory divisions respectively, the tax division earned slightly more than the advisory division. ("Pricewaterhousecoopers:
company profile," 2009).

PWCs audit and assurance division provide services such as valuations, IFRS conversions, pensions and share plans, listings, corporate treasury, and company secretarial

functions. It includes both financial and regulatory reporting. ("Pricewaterhousecoopers:

company profile," 2009). According to PWCs Online Campus Magazine its assurance teams ask

questions, test assumptions, and provide assurance that companies are reporting information that investors and others can rely on. ("Who we are," 2009). The advisory department helps clients anticipate create and manage change. This includes unplanned change. For example when new laws and regulations are passed or unanticipated market events happen. Planned change represents managements decisions around growth, expansion, cost reduction, and strategic transformation. ("Who we are," 2009). PWCs advisory department handles both types of change. PWCs tax division assists both individuals and corporate clients with tax planning and compliance with tax policies. It provides services in 140 countries and has 23,000 employees that specialize in the tax field. According to the Datamonitor, PwCs tax department develops comprehensive integrated solutions by combing industry insight with the technical skills of financial and tax specialists, economists, lawyers and other in-house experts.
("Pricewaterhousecoopers: company profile," 2009).

In the United States, Price Waterhouse Coopers has over 300,000 employees. Its workforce is made up of 27% minorities and 48% women. It was ranked 58th on Fortune Magazines 100 Best companies to work for in 2009. However, it also had a negative 2% growth in the last year. ("100 best companies," 2009). PwC appears to be proactive in influencing policy setting, industry guidelines and in developing academic standard in the accounting field compared to other companies. One way

PwC is proactive is its emphasis on international Financial Reporting Standards (IFRS). PwC awarded one million dollars to the IFRS ready grant program. The goal was to encourage college professors to incorporating the standards into it existing curriculum. It also enabled
students to access material directly from the PwC website. PwC also requires sophomores

interviewing for internships to have a general awareness of IFRS and to be able to identify it. Also, to understand why it might have an impact on their future careers. Juniors and above should be able to display an understanding of the international standards and explain which global agency determines IFRS. They should be able to give an example of how US GAAP and IFRS differ and in what countries the international standards are used. ("Pricewaterhousecoopers us audit," 2009). Another why that it has shown ingenuity is by creating the xTreme Games for college student. These games do not consist of book exercises or number crunching. Its a two week competition that enables undergraduates at schools across the country to experience and solve real world business challenges. ("Xtreme games pwc's," 2009). Teams are comprised of five members, two sophomores, one junior, and two other undergraduates of any level (one of the two does not have to be an accounting major). The xTreme Games consist of two different sections xTreme accounting and xTreme taxation. Both challenge undergraduates to study cases designed to expose them to real tax and accounting scenarios and to come up with solutions, including policy and planning issues. They are then given twelve minutes to present their solution to a panel of PwC partners. Since its inception in 2002, it has grown to include 85 schools, 2,500 teams, 13,000 participants and 1.5 million dollars in prize money. ("Xtreme games pwc's," 2009).

To accounting firms, lawsuits and sanctions from government agencies and disgruntled investors are to be expected, and PwC has had its fair share. The PwC employee that worked on the Tyco account was barred for life from public accounting by the SEC. (Gross, 2007). Then in July 2007, it agreed to pay $250 million to settle a securities and accounting fraud class-action lawsuit brought by Tyco shareholders. ("Pricewaterhousecoopers: company profile,"
2009).

The most recent PWC sandal involves how it audited Indias computer services firm Satyam and the arrest of two partners/accounts from the Indian office. The two were charged with a number of crimes including cheating, dishonesty, using forged papers, and fabrication of accounts and account information. (Timmons, 2009). However, from the information presented in the media this maybe a case of what public and government perception thinks that accountants should be able to do and what they are actually able to do. Also, this case is dealing with a foreign government who may have ulterior motives such as trying to cover-up its own corruption. According to reports Satyam went out of its way to deceive not only the public but PWC. It did this by forging bank balances, deposit receipts, bank letterhead, and invoices. The law in India does not state that banks have to provided direct access to account balances to auditors. (Timmons, 2009). In a petition for bail for the partners, PWC said that the government had no material or iota of evidence to even remotely suggest that the partners had any knowledge that Satyam documents were falsified. (Timmons, 2009). However, of particular interest to me are the lawsuits and issues concerning PwCs own Inhouse accounting and the lawsuits filed against it by its own employees. In August of 2006, it was reported that the IRS was auditing PwC and reviewing transactions because of billions of

dollars earned by the partners when they sold a number of side businesses. (Gross, 2007). In September 2007, the company agreed to pay $3.2 million to settle allegations that the company made improper payments on government technology contracts.
("Pricewaterhousecoopers: company profile," 2009). In the next month, a class action lawsuit was

filed against PwC for denial of benefits and overtime pay pertaining to its unlicensed associates.
("Pricewaterhousecoopers: company profile," 2009). The reason, I find this lawsuit especially

troubling is because, like other accounting firms PwC, requires its employees to work long hours particularly during its busy season (usually January 1st May 31st) . Of course, PwC does not come out and say this. When talking about work hours on its website, PwC phases it in this very diplomatic and savvy way. There are no standard hours. Work isnt the same day to day. Hours beyond client service are also part of PwC life. Schedules are unpredictable and can change frequently. Deadlines and client demands can drive long hours at certain points. Longer hours, which is part of our business, will vary by person based on client assignment throughout the year. ("Us careers campus," 2009).

In the general workforce employees who are not in management positions are not salaried and are therefore entitled to overtime pay. Unpaid overtime could have substantial monetary impact on PwC employees or prospective employees. While, you could talked about many subjects dealing with PwC, the last topic I would like to address would be the pros and cons of working for PwC. The Cons of working for PwC would be the long hours, hectic travel schedule in certain departments, and the possibility of litigation against you or the company that many put your job and retirement in jeopardy.

However, the possibility of litigation is probably true for any large public accounting firm. Other concerns would be the negative two percent growth and the non-payment of overtime pay mentioned earlier in this paper. Also, worth noting is the PwC attrition rate and the companys difficulty in retaining its employees. Between the years of 2007 and 2008, the other four major accounting had an employee growth rate of 8%, while PwC only grew 6%. In 2008 PwC hired around 40,000 people but its total employees only rose 8,993. ("Pricewaterhousecoopers:
company profile," 2009).

The pros of working for PwC would be the large amount of fringe benefits, its competitive wage, and commitment to diversity and women in the work place. PwC benefits include what you would normally expect a large amount of paid days off for holidays, vacation days, and sick days, plus health care benefits. In addition, it has an adoption assistance program, a new moms lactation program, six week paid parental-leave-of-absence program, paid adoption leave, emergency backup care reimbursement program, emergency backup childcare centers, international sos program (to pay for medical care outside the U.S.), professional development and affiliations, and a five-year service recognition program. ("Us careers campus," 2009). PwCs average yearly pay for its most common job a non-salaried executive assistant was $59,557. The average pay for another common position, a salaried manager was $95,082. ("100 best companies," 2009). PwC was recognized by Diversity Inc., publisher of the annual Diversity Inc Top 50 Companies for Diversity as the Top Company for Working Families. ("No. 5 pricewaterhousecoopers," 2009).

Works Cited
Pricewaterhousecoopers us audit and assurance, tax and advisory services with an industry focus. (2009). Retrieved November 20, 2009 from http://www.pwc.com/us/en/index.jhtml ("Pricewaterhousecoopers us audit," 2009) Who we are and what we do. (2009). PWC's Campus Magazin. Retrieved November 20, 2009 from http://.pwc.com/en_US/us/careers/pwctv/assets/feed-your-future-fall-09.pdf ("Who we are," 2009) Us careers campus candidates the benefits pwc. (2009). Retrieved November 23, 2009 from http://www.pwc.com/us/en/careers/campus-candidates/benefits-of-pwc.jhtml ("Us careers campus," 2009) Xtreme games pwc's tax and accounting competition. (2009). Retrieved from http://www.pwc.com/us/en/careers/xtreme/index.jhtml ("Xtreme games pwc's," 2009) Pricewaterhousecoopers: company profile. (2009). Datamonitor Report, Retrieved November 19, 2009 from http://navigatorclarion.passhe.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=dmhco& AN=3D2C9E2A-FDA7-4C39-A28A-C39B46DA69C1&site=ehost-live&scope=site ("Pricewaterhousecoopers: company profile," 2009) Timmons, H. (2009, May 28). 2 auditors held in india fault system. The New York Times, Retrieved from http://www.nytimes.com/2009/05/29/business/global/29prison.html (Timmons, 2009) 100 best companies to work for. (2009). Retrieved December 1, 2009 from http://money.cnn.com/magazines/fortune/bestcompanies/2009/index.html ("100 best companies," 2009) Gross, D. (2007, February 22). And the Oscar for creative accounting goes too.... Slate, Retrieved from http://www.slate.com/id/2160074/ (Gross, 2007) Pricewaterhousecoopers - company history. (n.d.). Retrieved from http://www.fundinguniverse.com/company-histories/PricewaterhouseCoopers-CompanyHistory.html ("Pricewaterhousecoopers - company," )

No. 5 pricewaterhousecoopers. (2009, March 13). Retrieved from http://diversityinc.com/content/1757/article/5509/ ("No. 5 pricewaterhousecoopers," 2009)