International Trade in Services.pdf - DSpace at Khazar University

Accounting Services 267
Links to large accounting firms play a prominent role in trade
Accounting firms frequently use a combination of affiliations and alliances to leverage
the specialized expertise of accounting professionals to serve the international
needs of clients. A typical organizational structure consists of an alliance in which
each firm is treated as a member of the umbrella organization, while operating as a
separate and independent legal entity. In an international context, this model makes
it possible for each individual partner firm to benefit from transfers of knowledge
and professional standards within the alliance, while complying with the legal and
regulatory requirements of the country in which the firm is located.
Four large accounting alliances dominate the global market and influence the
structure of service provision in many developing countries. The global accounting
leaders derive approximately 65 percent of their income from work outside
their home countries and are present in 140 to 150 different markets (table 8.2).
The big four firms have 550,000 employees among them and combined revenues
of about US$90 billion.
These four international accounting giants retain a partnership model that
relies on local members and their professionals to understand the language, rules,
and operating procedures of the respective market (box 8.2). 2 For example, several
Moroccan firms have affiliated themselves with the big four. In exchange for
royalties of about 10 percent of output, they can use the global firm’s name and
take advantage of its training, knowledge transfers, software applications, and
timely staff support (World Bank 2007). Similarly, in Tunisia, the big four have
been instrumental in raising accounting standards and training local accountants
(World Bank 2008).
Offshoring offers export opportunities for developing countries
Offshore outsourcing, that is, the outsourcing of services abroad, is often included
in the global strategic plans of companies. Accounting services, along with many
other business services, are now facing worldwide competition through new
Table 8.2. The Big Four Global Accounting Firms, 2007
International Revenues
Big four Headquarters Employees presence (US$, billions)
Deloitte Touche Tohmatsu United States 150,000 150 countries 23.1
Ernst & Young International United States 130,000 140 countries 21.1
KPMG International Netherlands 123,000 148 countries 19.8
PricewaterhouseCoopers United States 146,000 150 countries 25.2
Source: Company Web sites.