Big Four Asia Analysis (September 2008)

CENTER FOR
BUSINESS KNOWLEDGE
Big Four Asia analysis:

China/HK, India, Japan, Philippines,
Singapore
September 2008
t
Executive summary and overviews
Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

September Page t
Executive summary
China/HK: market leader is PwC:
PwC has the strongest overall Ch1 presence.
EY and PwC have a strong Ch1 presence in banking and capital markets (BCM).
Japan: market leader is KPMG for revenues, but Deloitte for resources.
EY audits the most BCM firms in Japan (per 2008 Forbes 2000).
Deloitte audits the second most BCM firms in Japan (2008 Forbes 2000)
PwC experienced a near demise in 2006 and its new Aarata firm is rebuilding.
India: market leader appears to be EY for revenues, but Deloitte for resources.
Deloittes revenue figure appears to be low in relation to its resources, suggesting the
firms resources are used for more outsourced work.
Philippines: market leader in terms of resources appears to be EY.

EY has a dominant lead in terms of offices and resources.
Singapore: market leader is unclear as there is not enough data available

EY is the Ch1 leader, but KPMG appears to have a large body of resources.

September Page t
SWOT analysis
Strength Weakness Opportunities Threats
Deloitte Japan: Market leader Philippines: Does not Japan: Acquired approx. 400 China:
for resources. appear to have invested employees from PwC. Increasing
as heavily as other firms. investment by
Japan: Strong roots India: Has a much larger body
US$150 million
with Tomatsu Lack of area integration of resources for inbound and
over the next
background. compared to EY and PwC. outbound work.
four years.
EY China and Japan: Ranked #3 overall in Japan: Acquired approx. 1,000 China: The
Ch.1 BCM. regions such as China and employees from PwC. (The firms goal is to
Japan for revenues and Most of the Big Four). have 10,000
India, Philippines,
resources. employees in the
Singapore: Appears Area integration: Creation of
country by 2010.
to be the market Far East Asia region (15
leader. countries) gives EY a much
larger integrated practice for its
go-to-market initiatives.
KPMG Japan: First to Lack of area integration Japan: Acquired approx. 280 China: Strategy
establish a practice in compared to EY and PwC. employees from PwC. to increase
Japan. headcount to
20,000 by 2017.
Japan: Market leader
for revenues.
PwC China: Market leader Japan: Collapse of PwC Area integration: Effective 1 China: Claims to
in terms of revenues Misuzu in 2006. July 2008, PwC Singapore, have invested
and resources. China, Hong Kong and Macau US$200m over
operate as a combined entity, the past 12
China: Ch1 overall
claiming to have 460 partners years.
and BCM.
and 11,000+ staff.

September Page t
Competitor revenue matrix FY07
China/HK India Japan Philippines Singapore
(US$m) (US$m) (m)
Deloitte $670 $88 90,902 n/a n/a
EY $420.6 $172 80,803 n/a n/a
KPMG $458.2 N/A 98,422 n/a n/a
PwC $1,205 $113 22,717 n/a n/a
*Based on IAB 2008 survey and competitor annual reports. Shaded cells indicate market leaders

September Page t
China overview FY07*
Revenue Ch1 rank Offices Partners Professional Total staff
(US$m) (Forbes) staff
PwC $1,205 1 22 367 8,274 10,556
Deloitte $670 4 14 302 5,352 6,700
EY $420.6 2 12 313 6,577 8,000
KPMG $358.2 2 11 352 5,490 7,039
*Based on IAB 2008 survey, annual reports and 2008 Forbes Global 2000

September Page t
India overview FY07*
(US$m) (Forbes) staff
EY $172 3 n/a n/a n/a N/A
PwC $113 4 11 n/a n/a 4,500
KPMG n/a 2 n/a n/a n/a n/a
Deloitte $88 1 22 n/a n/a 8,000
*Based on annual reports, Forbes 2008 Global 2000 and Financial Express press releases.

September Page t
Japan overview FY07*
(m) (Forbes) staff
KPMG $98,422 2 39 556 4,445 5,578
Deloitte $90,902 3 39 610 4,736 5,915
EY $80,803 1 35 685 3,914 5,676
PwC $22,717 4 4 56 1,419 1,614
*Based on 2008 IAB survey, annual reports, and 2008 Forbes Global 2000

September Page t
Philippines overview FY07*
(Forbes) staff
EY n/a 1 9 78** n/a 1,800
KPMG n/a 1 5 22 n/a 500
PwC n/a n/a 2 29** n/a n/a
Deloitte n/a n/a 2 11 n/a 300
*Based on regional competitors websites

**Includes Partners and Principals (website lists names but does not distinguish the levels clearly).

September Page t
Singapore overview FY07*
(Forbes) staff
EY n/a 1 1 n/a n/a n/a
KPMG n/a 2 1 n/a n/a 2,000
Deloitte n/a 3 2 40 n/a 1,000
PwC n/a 4 1 28 n/a n/a
*Based on regional competitors websites

September Page t
Competitor profiles

September Page t
Deloitte
Description and key facts
China/HK Key audit clients: Bank of Communications, Cheung Kong Holdings, Sun Hung Kai Properties, China Railway Group
Limited, China Resources Enterprise Ltd., SAIC Motor Corp Ltd, Sino Land Co Ltd, China Overseas Land & Investment
Ltd., China International Marine Containers Group Co Ltd, Yanzhou Coal Mining Company Ltd.
First office was established in 1917 in Shanghai.
Has offices in 10 cities: Beijing, Dalian, Guangzhou, Hong Kong, Macau, Nanjin, Shanghai, Shenzhen, Suzhou and Tianjin.
Hong Kong is one of three Centers of Excellence for Asia/Pacific and its largest Chinese office.
Announced plans to invest $150 million in China through FY10.
India Key audit clients: Reliance Industries Limited, Tata Steel Ltd., Tata Consultancy Services Ltd., Tata Motors Limited, ITC
Ltd., Mahindra & Mahindra LTD.
Has 22 offices in Ahmedabad (1), Bangalore (1), Baroda (2), Chennai (1), Coimbatore (1), Goa (1), Jamshedpur (1),
Kochi(1), Kolkata(1), Mumbai (7), New Delhi (4) and Pune (1).
Japan Key audit clients: Bank of Yokohama, Mitsui & Co., Mitsubishi, Denso Corp. Ltd., Resona Holdings, Japan Tobacco,
Kansai Electric Power, Itochu Corp, Bridgestone Corp, Central Japan Railway.
Founded in 1968 under the leadership of Nobuzu Tohmatsu. Merged with Deloitte in 1990 to form Deloitte Touch
Tohmatsu.
Operates in 37 locations in Japan.
Philippines Established in 1997 by Dr. Conchita L. Manabat as Manabat Delgado Amper & Co.
In June 1999, it was officially appointed as a member firm of Deloitte.
The firm maintains a head office in Makati City and a branch in Cebu City.
Singapore Has two offices in Singapore.

Deloittes history in the country dates back to 1967.
Singapore is part of Deloittes South East Asia practice, which includes Guam, Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam, with more than 170 Partners and 3,900 professionals located in 20 offices.

September Page t
EY
Descriptions and key facts
China/HK Key audit clients: Industrial & Commercial Bank (aka ICBC), CNOOC Limited, Ping An Insurance (Group) of
China Ltd., Baoshan Iron & Steel, Shanghai Pudong Development Bank, Industrial Bank, Air China Limited.
Operates in nine cities (Hong Kong, Beijing, Chengdu, Dalian, Guangzhou, Macau, Shanghai, Shenzhen and
Wuhan offices).
Internal goal (corroborated by information found on website) to have 11,000 employees in China by 2010.
May 2006 EY China came into conflict with the Chinese government and the Peoples Bank of China over a
report on debt default among Chinas Big Four banks. This has created bad press for EY China.
India Key audit clients: Bharti Airtel Ltd, Axis Bank Ltd., Suzlon Energy Limited.
Japan Key audit clients: Mizuho Financial Group, Canon, Nissan Motors, Tokyo Electric Power, Nomura Holdings
Inc., JFE Holdings Inc., Toshiba (Japan), Marubeni Corp, Fujitsu Ltd., Mitsubishi Estate Company.
EY Shin Nihon was established in April 2000.
Headquartered in Tokyo, with 37 offices throughout the country.
Philippines SyCip Gorres Velayo & Co. (SGV & Co.) is the Philippines largest professional services firm, with nine offices
in Bacolod, Baguio, Cagayan de Oro, Cavite, Cebu, Davao, General Santos, Lapu-Lapu and Makati.
Singapore Singapore is one of 15 countries in EYs Far East Asia (FEA) region, effective 1 July 2008.
The FEA region consists of more than 20,000 people.

September Page t
KPMG
China/HK Key Audit Clients: China Petroleum & Chemical Corp. (aka. Sinopec), China Mobil Communications Corp.,
China Construction Bank, China Telecommunications aka China Telecom Corp Ltd, China Shenhua Energy
Co Ltd, China Merchants Bank, China Citic Bank, Angang New Steel Co. Ltd, Henderson Land Development,
MTR Corp. Ltd.
Established in 1945 in Hong Kong and in 1985 in China.
Has 11 offices in China in Beijing, Sheyyang, Qingdao, Shanghai, Chengdu, Hangzhou, Fuzhou, Guangzhou,
Shenzhen, Hong Kong and Macau.
New strategic plan for increasing headcount in China and Hong Kong to 10,000 by 2010.
India Key Audit Clients: ICICI Bank Ltd, Reliance Communications Ltd., Infosys Technologies Lt, Wipro, Ltd.,
Reliance Capital Limited.
KPMG was established in India in September 1993.
The firm has seven offices located in Mumbai, Pune, Delhi, Kolkata, Chennai, Bangalore and Hyderabad.
Japan Key Audit Clients: Nippon Telegraph & Telephone, Sumitomo Mitsui Financial Group Inc., Honda Motor,
Matsushita Electric Industrial, Nippon Steel Corp, East Japan Railway, Sumitomo, Seven & I Holdings Co. Ltd.,
Takeda Pharmaceutical Co., Mitsubishi Electric.
Founded in 1949.
KPMG AZSA was formed after the merger with Asahi & Company in January 2004.
Operates through 46 offices currently.
Philippines KPMG Manabat Sanagustin & Co. has grown from a workforce of fewer than 50 employees in 1996 to more
than 500 Partners currently.
Has five offices.
Singapore KPMG's history in Singapore dates back to 1941. Today, the firm has close to 2,000 professionals in one
office.

September Page t
PwC
China/HK Key audit clients: Bank of China, Hutchison-Whampoa Ltd., China Life Insurance Co Ltd, Bank of
Communications, BOC Hong Kong Holdings Ltd., China Netcom Corp Ltd (aka China Netcom Group Corp),
Jardine Matheson, Aluminum Corporation of China Limited, China Unicom Ltd., China Communications
Construction Co. Ltd. (CCCC).
PwC Zhong Tian claims to have a history dating back to the early 20th century.
Largest Big Four firm, with 12 offices in Beijing, Chongqing, Dalian, Guangzhou, Qingdao, Shanghai, Shenzhen,
Suzhou, Tianjin, Xian, Hong Kong and Macao.
PwC plans to invest $50100 million in China by 2011.
India Key audit clients: Reliance Power Limited, Satyam Computer Services Ltd.
Has 11 offices in Kolkata (3), Bangalore (1), Bhubaneswar (1), Chennai (1), Hyderabad (1), Pune (1), Mumbai (1),
New Delhi (2).
According to a 27 October 2007 Financial Express article, the Indian market grew 36% from the previous year.
Japan Key audit clients: Toyota Motor Corp, Millea Holdings, Sony (Japan), Toyota Tsusho, Toyota Industries Corp., Aisin
Seiki Co., Ltd., Asahi Kasei Corp., Showa Shell Sekiyu, Nipponkoa Insurance Co., Ltd, Toyota Boshoku Corp.
In May 2006, Japanese financial regulators suspend PwCs auditing services for its biggest clients for two months.
PwC Aarata was established on 1 June 2006, after the dissolution of PwC Misuzu.
It is estimated that PwC lost more than 2,000 of its employees with the meltdown of PwC Misuzu.
Philippines IslaLipana & Co. has two offices in Cebu City and Manila.
Is associated with the accountancy practice set up by Charles White and Percival Page in the Philippines in 1927.
The practice becomes a correspondent of Price Waterhouse in 1958 and joined the PwC Network in 1973.
Singapore Has one office in Singapore.

Effective 1 July 2008, PwC Singapore, China, Hong Kong and Macau operate on a combined basis, claiming to
have 460 partners and more than 11,000 staff.

September Page t
Economic overviews: 20042008

September Page t
China five-year economic overview
Detailed macroeconomic indicators
2004 2005 2006 2007 2008

GDP (US$b) 1,931.6 2,236.1 2,658.2 3,280.6 4,260.2
Real GDP growth (%) 10.1 10.4 11.6 11.9 9.9
Real consumer spending growth (%) 7.0 8.0 7.6 7.2 7.5
Annual average wages (USS)* 2,345 2,689 3,075 3,536 (E) 4,031 (E)
Real wage growth (%) 14.1 14.6 14.4 15.3 (E) 14.1 (E)
Change in consumer price index (%) 3.9 1.8 1.5 4.8 6.5
* Wages have been calculated using the exchange rate as on 24 September 2008
Note: Estimates for real wage growth and annual average wages are based on their correlation with real GDP growth.
Source: Global Insight; ILO labor statistics

September Page t
India five-year economic overview
2004 2005 2006 2007 2008

GDP (US$b) 695.0 811.9 915.0 1,139.9 1,300.6
Real GDP growth (%) 8.3 9.2 9.7 9.0 7.5
Annual average wages (USS)* 452 323 N/A N/A N/A
Real wage growth (%) 60.5 -28.7 N/A N/A N/A
* Wage level data for 200608 was not available on the ILO website or through any other sources.
Note: Estimates for real wage growth and annual average wages were not created because the existing data has anomalies, which will not enable
consistent or useful projections.

September Page t
Japan five-year economic overview
2004 2005 2006 2007 2008

GDP (US$b) 4,609.3 4,557.8 4,375.0 4,374.6 4,845.9
Real GDP growth (%) 2.7 1.9 2.4 2.0 0.9
Real wage growth (%) -1.1 -0.3 2.6 1.45 (E) 1.0 (E)
Change in consumer price index (%) 0.0 -0.6 0.3 0.1 1.3

September Page t
Philippines five-year economic overview
2004 2005 2006 2007 2008

GDP (US$b) 86.9 98.7 117.6 144.1 163.5
Real GDP growth (%) 6.4 4.9 5.4 7.3 4.4
Real consumer spending growth (%) 5.9 4.8 5.5 5.8 3.4 (E)
Source: Global Insight; Key indicators for Asia and the Pacific 2008; ILO labor statistics

September Page t
Singapore five-year economic overview
2004 2005 2006 2007 2008
GDP (US$b) 109.2 119.8 136.6 161.4 187.7
Real GDP growth (%) 9.0 7.3 8.2 7.7 4.5
Real consumer spending growth (%) 5.2 3.9 3.3 4.6 3.6 (E)
Source: Global Insight; Key indicators for Asia and the Pacific 2008; ILO labor statistics

September Page t
September 2008
Warning
The information contained in this report is dated material.
Major events may have occurred since original publication that might alter the accuracy of the report.
For further information, please contact the following Knowledge Services team member: Shannon Szeto at +1 416 943 2266, EY/Comm 1677938.
This report was requested by: Simone Schaa

For new requests, contact the Center for Business Knowledge click Ask the CBK, or call:
US: 800 EYHELP3, option 4; Canada: 877EYBUSRE (+1 877 392 8773). For requests outside of North America, contact your local CBK.
Includes copyrighted material.

Any use of this material, including reproduction or distribution, must comply with applicable copyright law, as well as Ernst & Youngs contractual
obligations. Reproduction or reuse in excess of fair use may result in liability for copyright infringement. Please refer to Ernst & Young Client
Confidentiality, Client Privacy and Knowledge-Sharing Policy (SCORE #CA7506) for additional guidance.
Not intended for distribution to the external client.

This report is not intended for distribution outside of Ernst & Young.
Confidential for internal use only

2008 Ernst & Young LLP.
All rights reserved.
Please see the Notes pages for sources (View, Notes page).

September Page t

Big Four Asia Analysis (September 2008)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Big Four Asia Analysis (September 2008)

Uploaded by

Copyright:

Available Formats

CENTER FOR

Big Four Asia analysis:

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Philippines: market leader in terms of resources appears to be EY.

Singapore: market leader is unclear as there is not enough data available

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

EY $420.6 $172 80,803 n/a n/a

KPMG $458.2 N/A 98,422 n/a n/a

PwC $1,205 $113 22,717 n/a n/a

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

PwC $1,205 1 22 367 8,274 10,556

Deloitte $670 4 14 302 5,352 6,700

EY $420.6 2 12 313 6,577 8,000

KPMG $358.2 2 11 352 5,490 7,039

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

EY $172 3 n/a n/a n/a N/A

PwC $113 4 11 n/a n/a 4,500

KPMG n/a 2 n/a n/a n/a n/a

Deloitte $88 1 22 n/a n/a 8,000

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

KPMG $98,422 2 39 556 4,445 5,578

Deloitte $90,902 3 39 610 4,736 5,915

EY $80,803 1 35 685 3,914 5,676

PwC $22,717 4 4 56 1,419 1,614

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

EY n/a 1 9 78** n/a 1,800

KPMG n/a 1 5 22 n/a 500

PwC n/a n/a 2 29** n/a n/a

Deloitte n/a n/a 2 11 n/a 300

*Based on regional competitors websites

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

EY n/a 1 1 n/a n/a n/a

KPMG n/a 2 1 n/a n/a 2,000

Deloitte n/a 3 2 40 n/a 1,000

PwC n/a 4 1 28 n/a n/a

*Based on regional competitors websites

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Singapore Has two offices in Singapore.

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Singapore Has one office in Singapore.

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

2004 2005 2006 2007 2008

Real GDP growth (%) 10.1 10.4 11.6 11.9 9.9

Source: Global Insight; ILO labor statistics

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

2004 2005 2006 2007 2008

Real GDP growth (%) 8.3 9.2 9.7 9.0 7.5

Annual average wages (USS)* 452 323 N/A N/A N/A

Real wage growth (%) 60.5 -28.7 N/A N/A N/A

Source: Global Insight; ILO labor statistics

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Detailed macroeconomic indicators

2004 2005 2006 2007 2008

Real GDP growth (%) 2.7 1.9 2.4 2.0 0.9

Source: Global Insight; ILO labor statistics

Big Four Asia analysis: China/HK, India, Japan, Philippines, Singapore

Detailed macroeconomic indicators

2004 2005 2006 2007 2008

Real GDP growth (%) 6.4 4.9 5.4 7.3 4.4