PwC uses drone to audit company
PwC has used a drone as part of an audit for the first time in the United Kingdom. The drone was used to remotely measure and capture more than 300 images of coal reserves at a power plant in Aberthaw, South Wales, which belongs to RWE, a German energy company. The exercise, which took just half an hour, would have taken more than four hours if done via traditional methods. The firm is exploring other opportunities to deploy drones during audits following this success. Elaine Whyte, U.K. Drones Leader at PwC said: “Sectors with large assets in hard to reach areas are the most obvious starting points for expanding this kind of work further – from mining to agriculture and forestry.” Rival firm EY has also revealed its plans to expand the use of drones in audit.
RSM expands China presence
RSM has acquired Beijing-based firm Huapu Tianjian Certified Public Accountants LLP, expanding its reach in China. The move will bring 10 new offices country-wide and 1,800 professionals and partners into the RSM network. It is part of the firm’s strategic growth plans, and its first step towards building a top 10 local provider. Huapu Tianjian will serve RSM’s existing base of international corporate and middle market clients across the shipping, real estate, food and beverage, and professional services sectors. “China is an important region for internationally ambitious middle market businesses that RSM serves,” said RSM International’s Chief Executive Officer Jean Stephens. “Today is just the beginning of an exciting new chapter for RSM in China.”
KPMG launches new law firm in Hong Kong
KPMG launched an affiliate law firm in Hong Kong this month, in a bid to meet increasing demand from clients for legal services. The new firm, SF Lawyers, will be led by accountant and lawyer Shirley Fu, who will lead a team of 20 lawyers. The firm also plans to launch in Shanghai later this year, where it will have a team of 22. Stuart Fuller, Head of KPMG Law said: “We want to expand our legal operations to meet the increasing client demand for legal services. We are not intending to be in direct competition with other law firms.” EY has also expanded their legal services in Hong Kong in recent years, while Deloitte plans to launch its legal firm this year.
Airbnb heads for IPO
Accommodation rental business Airbnb announced its second straight year of profitability on an adjusted basis as it prepares for an initial public offering (IPO). The company exceeded US$1 billion in quarterly revenue in the third quarter of 2018, and is currently valued at US$31 billion. Chief Executive Officer Brian Chesky has pledged to hold the IPO before 2020, once employee equity grants expire. The company, which launched as a start-up in 2008, expects to hit 500 million guest arrivals by the end of this year’s first quarter. It is one the many private tech companies expected to go public this year, alongside ride-hailing apps Uber and Lyft and co-working start-up WeWork.
IRS employees to work amid government shutdown
The United States Treasury Department is forcing more than 50,000 Internal Revenue Service (IRS) employees to work without pay, following the release of a revised shutdown contingency plan. The new plan, released on 15 January, comes less than two weeks before the IRS will start to process paper and electronic returns and issue refunds to taxpayers. National President of the National Treasury Employees Union Tony Reardon said: “There is no doubt the IRS needs to get ready for the 2019 filing season that starts 28 January, and IRS employees want to work, but the hard, cold reality is that they’ve already missed a pay cheque and soon they’ll be asked to work for free for as long as the shutdown lasts.” The U.S. government has been partially shut down since 22 December 2018.
21
The number of years an average family would need to not spend a single dollar in order to afford a home in Hong Kong, according to the Demographia International Housing Affordability Survey. The city was ranked the least affordable housing market in the world for the ninth year in a row, beating its own previous record of 19.4 years, set in 2017. It would take 12.6 years for homeowners to buy a house in Vancouver, which came in second place, and 11.7 years in Sydney, which came in third.
800,000
The number of federal employees granted temporary leave or working without pay in light of the United States government shutdown. It is the longest shutdown in American history, having surpassed the 21-day shutdown of 1995-1996.
453
The cases of fraud individually worth more than £100,000 that made it to court in the United Kingdom in 2018. Cases involved the evasion of duty, VAT fraud, investment fraud, loans and mortgages, counterfeit goods, pensions and social benefits, totaling £1.2 billion, according to research by KPMG Forensic in its latest Fraud Barometer.
KPMG called in to help troubled cafe
British cafe chain Patisserie Valerie has brought in KPMG to “review all options” after accounting irregularities of up to £20 million were uncovered last October. The discrepancies, which were revealed by PwC, included thousands of false entries in the ledger of its parent company Patisserie Holdings. The parent company later admitted in a statement that the cash flow and profitability of the business had been overstated. Luke Johnson, the chain’s leading shareholder is negotiating with HSBC and Barclays to extend £9.7 million of overdraft debt which was due on 18 January. The company’s finance director, Chris Marsh has resigned, and been arrested by police.
EY elects new global CEO
EY has elected Global Managing Partner Carmine Di Sibio to be the firm’s next global Chairman and Chief Executive Officer. He will succeed Mark Weinberger and begin his new role on 1 July. Di Sibio, who has been with the firm since 1985, has held a number of senior roles and has been an advisory and assurance partner for many of EY’s biggest financial services accounts. He is Chair of the firm’s Global Financial Services Markets Executive and also Regional Managing Partner for the Americas financial services organization. He also co-chairs EY’s Global Diversity and Inclusiveness Steering Committee. In a statement, Di Sibio said: “I am honoured to be chosen to lead this great organization, which I have been a part of for over 33 years.”
China National Tobacco plans IPO
China Tobacco International has filed for a Hong Kong initial public offering. The listing will raise US$100 million for the unit, accounting for a small stake of the overall business. The unit resells tobacco leaf products from Brazil and the United States to Chinese manufacturers. The subsidiary of China National Tobacco plans to use the proceeds from the IPO to purchase cigarette brands or tobacco product brands, and also plans to expand its reach into Southeast Asian markets. The listing comes at a time of increasing pressure within the nation to stop smoking, where 300 million people are smokers. Its parent company is the world’s largest tobacco producer by volume.
Eight charged with hacking into SEC
United States authorities have charged eight individuals for hacking into the Securities and Exchange Commission (SEC) database. The group, which includes three Ukrainians and a Russian, tapped into the SEC’s system from May to October 2016, accessing thousands of confidential documents related to corporations’ financial conditions. The data was sold to other traders, before it was made public. The SEC believes at least 157 earning releases were traded ahead of time, netting the group US$ 4.1 million. In a statement, SEC Chairman Jay Clayton said: “These threats to our marketplace are significant and ongoing and often involve threats from actors outside our borders. No system can be entirely safe from a cyber intrusion.”
