Monday, July 7, 2014

Has Beans

I have never been a fan of the "big" accounting firms, even as their numbers have been whittled down from eight (when I was a youth) to the current four. My dealings with them over the years in Hong Kong have shown them to be not particularly good at their jobs, despite their fees being a multiple of those of smaller, more competent outfits. I came within a whisker of reporting one of the "Big 4" to the HKICPA for incompetence, bordering on negligence, a couple of years back, and the others are barely any better. So it is with a large dollop of schadenfreude that I see the local custodians of this particular licence to print money shoot themselves in their privileged feet.

The incomprehensible decision of the local branches of the four largest international accounting firms to get involved in politics by placing an ad in some of the Chinese papers (opposing Occupy Central) has backfired, in a number of ways, all of them predictable.

Firstly, they did not even get approval for their action from their head offices. Do they not realise that the global brand names of the firms, the intellectual property and the goodwill, do not belong to a few Hong Kong bean counters? As professionals (or even as amateurs), they should have a clear understanding of what is theirs and what is not; is there anything more basic than this?  But apparently they did not understand this .... unless they were operating on the principle that it is easier to ask for forgiveness than for permission, in which case the placing of the ad moves from negligence to either recklessness or something even more culpable.

The international head offices of the four firms were swift to disown the actions of their renegade Hong Kong associates, saying that the first they had heard of the ads was through the press. If this had been done by, say, the local head of Coca Cola, one could imagine a quick recall to Atlanta for severance talks. Indeed, at least one of the firms has already called one of its senior local partners to London for 'talks'.

Next, their staff quickly rejected any suggestion that the ad represented their views by taking out an ad of their own, disowning, as the head offices had done, the local partners' views. The partners' views are therefore exposed as merely those of an elite within an elite, hiding behind a brand name they do not even own. Stupid or what? And all they have achieved, apart from a bit of PRC arse-licking, is to show their firms up as being divided, like the rest of Hong Kong, between the have-a-lots and the don't-have-so-muches, and to polarise Hong Kong just that little bit more. All so very predictable to anyone who thought it through, at least anyone without a silver spoon up their jacksie.

And international comment (at least two articles in the FT, a feature on the Australian Channel news programme, condemnation by Chris Patten and by Anson Chan) has focussed on the inadvisability of the ad rather than any underlying issues. Again, all the ads have achieved is to make the local partners look silly, and to damage the respective accounting brands.

But perhaps the intention was just to kowtow to China for short-term personal advantage, and hang everyone else, in which case being slated by Patten and Chan would be a plus. Except that it is well-known that China is busy grooming its own competitors to the Big 4. And the cold wind of competition is already having its effect on their super-profits in Hong Kong: the local partners of at least one of the Big 4 recently took 20% salary cuts.

The writing's on the wall, boys: maybe you yourselves should stop "occupying Central" and start trimming your sails.


  1. Criticised by Anson Chan, eh? What was that line of Denis Healey's about being savaged by a dead sheep? Anyway, the Occupy Central movement is riven by so much infighting that the delays in getting the thing off the ground (or onto it) make the MTRC's time-keeping look like a precision Rolex in comparison.

  2. Are you suggesting that the Dame is only good for a gum job, Ulie?

  3. Possibly, fumie, but like most Hong Kongers she'd swallow almost anything.