Ernst & Young’s new chairman pinned his colours to a global mast this
week, saying that the firm’s seven area structure will help it withstand the
challenges of globalisation.
In his first major interview, Otty hinted that the structure, which has been
in place for some time but taken on added significance under his leadership,
would protect firms against capital market and ownership movements.
Explicitly rejecting the model followed by KPMG, whose UK and German firms
are to merge, Otty said: ‘The view we are taking is that there is so much going
on in emerging markets that you can’t afford to take a two-step approach.
Otty has personally pushed the moves, heading up the northern Europe, Middle
East, India and Africa practice.
‘We haven’t created one profit pool and I don’t believe we would be able to
in the current regulatory climate,’ he said, but indicated that revenue
generating partners were being measured on global revenues rather than on UK
revenues to determine their share of UK profits.
Closer to home, Otty said the firm will maintain its double-digit growth this
year, but added: ‘It’s not going to be as high as last year.’
He said that he had been surprised by the continuing strength of deal
activity in his time in the job.
When asked about the Ferox case, Otty implied that the action brought by the
hedge fund over E&Y allegedly filing its accounts too early, implied a
Without commenting on specifics, he said: ‘In most markets, litigation is an
issue. We need to make sure, in terms of economic competitiveness, that it
doesn’t become a problem.’
Otty declined to comment on recent criticisms of the firm from Cairn finance
director Jann Brown over lack of support on IFRS, saying only: ‘The Big Four
learned a lot through IFRS implementation and invested an enormous amount.’
He said he wanted the firm to win more government work in particular. ‘That’s
probably the only area I would identify as one to improve,’ he said, adding
that, ‘relative to size we are strong.’
And in what appeared to indicate that Otty was not especially concerned with
institute politics, he said he had an affiliated membership of a UK institute,
but added: ‘I can’t remember which one.’
E&Y to take strong stance on business ethics
The new chairman of Ernst & Young, Mark Otty, intends to bring a new
ethical emphasis to the firm, he hinted this week, adding that he wanted to
defend business where it deserved defending and criticise it where necessary,
writes Alex Hawkes.
‘In the marketplace today there are questions about the integrity of big
business, which bothers me a great deal. Graduates are asking what sort of
organisation they are becoming part of,’ Otty said.
His comments are some of the strongest remarks on ethics to come out of the
profession in recent years. The Big Four have kept a low profile on the issue,
facing criticism over their activities on tax avoidance in particular. E&Y
has already taken a lead this year in seeking to defend and explain private
‘What I worry about is – we are operating in a situation where credibility of
business is low and as a consequence the best people emerging choose not to get
into formal employment. If we are going to be successful, we need responsible
business that’s not operating separately from the community.’
Revenue and profitability growth in on the rise for CPA firms, found a survey from the American Institute of CPA’s and its subsidiary CPA.com
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton