- Two scandals this year have slowed PwC’s business in the Asia-Pacific region.
- The company’s business license in China was suspended for six months due to its involvement in a fraud case.
- Despite these regional challenges, PwC achieved record revenues and hired 10,000 new employees.
PwC lost business in the Asia-Pacific region following scandals in Australia and China this year.
On Monday, the Big Four consulting firm reported a 12.7% decline in net profit in the region for the financial year ending in June. PwC said sales were down due to weak demand, particularly in China.
In September, it was revealed that the company was involved in concealing fraud at the now-bankrupt Chinese real estate developer Evergrande.
The Chinese government fined PwC $62 million and revoked its license to operate in the country for six months. Eleven employees were fired or resigned, and the state-owned company subsequently removed PwC from its supervisory board.
Mohamed Khande, PwC’s global chairman, said Evergrande’s audit results were “in stark contrast” to the high-quality work PwC produces and were not representative of the firm’s philosophy.
A senior partner in the firm’s tax department was found to have passed on confidential information from his government work to colleagues to help win new business with multinational technology companies such as Uber and Google. The Australian Financial Review reported that this is the second regional scandal. First reported.
PwC sold its Australian government consulting business following the revelations.
Overall revenue in Asia Pacific, the company’s smallest region, fell 5.6% in local currency terms. PwC highlighted that its business in India was strong and revenue increased.
Despite the regional impact on the business, PwC recorded overall growth of 3.7%, achieving a record total revenue of $55.4 billion.
Like other large consulting firms, PwC has been hit by a decline in demand for consulting services, and its growth rate has slowed. Sales in fiscal 2023 increased by 9.9%.
The pandemic-era surge in advisory services has slowed demand for professional services and left firms overstaffed for their operational levels. While EY and Deloitte have cut headcounts over the past year, PwC will add 10,000 employees in 2024, bringing its global workforce to 370,000.
Mohamed Khande, Global Chairman of PwC, said: “Despite the backdrop of economic headwinds, we continue to grow revenues across all business lines, deepen our strategic alliances and continue to grow and expand our AI capabilities. “We have invested $1.5 billion,” he said.