PricewaterhouseCoopers (PwC)

• Date founded: 1998
• Industry: tax; consulting
• Corporate headquarters: London, United Kingdom
• Type: Private

Overview

PricewaterhouseCoopers (PwC) is an international firm that offers services in the fields of assurance, tax, human resources, transactions, performance improvement, and crisis management. While legally known as PricewaterhouseCoopers, it shortened its brand name in 2010 to simply PwC. It is a network of firms operating under the coordinating entity PricewaterhouseCoopers International Limited (PwCIL). All firms are locally owned because of legal requirements. Additionally, all firms are separate legal enterprises. The network includes approximately 800 offices in about 160 countries. PwCIL has a Network Leadership Team and Board, which develops and sets in place policies toward common goals.

PwC is one of the accounting industry's Big 4—the four largest accounting and auditing firms, including Deloitte Touche Tohmatsu, Ernst & Young, and KPMG. These certified public accounting firms conduct most of the audits required of firms with publicly traded stock. For much of the twentieth century, this industry was dominated by as many as eight firms. However, the number of major accounting firms ultimately halved due to mergers and closings.

PwC offers a wide range of services. These include advisory, audit and assurance, entrepreneurial and private business, family business services, legal, people and organization, sustainability and climate change, and tax assistance.

Advisory consulting includes addressing challenges and future opportunities. This may encompass consultancy and deal evaluation. PwC also offers forensics accounting to uncover risks or concerns.

Audit and assurance services require an in-depth understanding of often-complicated regulatory information. PwC offers advice on accounting, corporate reporting, producing financial statements, planning for regulation, and raising capital, among other topics.

PwC offers assistance for entrepreneurial and private businesses to help them grow. This includes finding capital to sustain growth and expansion, developing digital operations, and identifying and addressing concerns unique to entrepreneurial and private businesses.

Family business services include evaluating the strengths and weaknesses of family-owned businesses. These include long-term planning and generational transitions.

PwC’s legal offerings include creating a team of consultants, financial advisers, and lawyers to address problems and anticipate problems.

People and organization issues can involve talent acquisition and retention, training, human resources, technology challenges, and more. PwC offers help in addressing such matters as the physical and philosophical landscape of business shifts.

PwC offers assistance and advice to organizations that seek sustainability. This includes evaluating the impact of products and services and addressing topics such as sourcing.

Specialized tax knowledge is one service PwC offers in the tax arena. The company helps clients navigate increasingly complicated tax codes, reduce tax risks, comply with requirements, plan future tax strategies, manage accounting, and address disputes.

History

PricewaterhouseCoopers formed in 1998 when Price Waterhouse merged with Coopers & Lybrand. The accounting firms both dated to the mid-nineteenth century and were formed in London.

Samuel Lowell Price established his business in London in 1849. He entered a partnership in 1865, and the company became Price, Holyland and Waterhouse. The partners again changed the name—to Price, Waterhouse & Co.—in 1874. In 1982, the company became Price Waterhouse World Firm.

William Cooper founded his practice in 1854 in London. Seven years later, he changed its name to Cooper Brothers, and eventually to Cooper Brothers & Co. Robert H. Montgomery, William M. Lybrand, Adam A. Ross Jr., and T. Edward Ross formed Lybrand, Ross Brothers and Montgomery in 1898. Coopers & Lybrand merged with Deloitte Haskins & Sells in many countries in 1990.

In 1998, Price Waterhouse and Coopers & Lybrand merged, forming PricewaterhouseCoopers. The merger was lauded for the strengths in the highly profitable field of consultancy each company had. Coopers was regarded for its strength in personnel-issue consultancy, while Price Waterhouse’s strength was in information-technology consulting. Four years later, the partners sold the consulting division to International Business Machines Corporation (IBM).

Impact

PwC counts among its clients some of the largest companies in the world. In 2019, these included Bank of America, American International Group, Chase, Goldman Sachs, Prudential Financial, and IBM. Others in the top twenty include Ford Motor Co., Merck, Johnson & Johnson, Exxon, Chevron, and American Express.

PwC had 28 percent of the Global Fortune 500 companies as audit clients in 2018. It had 56 percent as non-audit clients. PwC served 429 of the Global Fortune 500 companies as well as more than one hundred thousand entrepreneurial and private companies. PwC had 26 percent of the Fortune 500 companies as audit clients, and 58 percent as non-audit clients. It also had 31 percent of the FT Global 500 companies as audit clients and 58 percent as non-audit clients.

One of the most visible and prestigious clients is the Academy Awards, the organization that bestows annual awards on professionals in the film industry. For more than eighty years, PwC has been counting the ballots for the awards presentation. The company first landed the responsibility during the 1930s, when actress Bette Davis was expected to be nominated for an Academy Award for her role in the 1934 film Of Human Bondage. Davis was a Warner Brothers Studios actor, but had been loaned to RKO for the role. Rumors in Hollywood indicated Warner Brothers was trying to prevent Davis from being nominated for best actress. When Davis was not nominated, many suspected the Academy had blocked her. Employees of the organization counted the ballots, so the public and others in Hollywood wondered if the tally was correct. The following year, Price Waterhouse was hired to count the votes.

In 2017, PwC was involved in a scandal when the Academy Awards envelopes were mixed up. The wrong film was announced as best picture, though the error was corrected during the broadcast. PwC issued apologies. Despite the resulting outcry, PwC was not replaced and instituted a number of new safeguards to prevent future errors.

In 2020, PwC added a new service, one that would have been foreseeable even several years earlier. This was an assessment tool to determine COVID-19 regulations' impact on businesses. This offering measured the effects of the new slate of governmental regulations enacted to curtail the pandemic. The service was also designed to build resiliency and to conceptualize responses ahead of new crises. In 2023, PwC launched a new service that also addressed a new type of environment that before was left uncontemplated. This was a service to help organizations anticipate and pre-plan for the effects of climate change.

PwC experienced controversy in Australia in 2023 when a partner leaked confidential government tax plans to clients, including major corporations like Google. This breach led to internal investigations and public scrutiny over the firm's ethical standards. The following year, Chinese authorities imposed a six-month suspension and fined PwC $62 million over its audits of China Evergrande Group, whose collapse in late 2021 contributed to China's property crisis. This was the largest fine ever imposed on a Big Four accounting firm in China. It forced the company to decrease pay for its partners, and several corporate clients left the firm.

Bibliography

"About Us." PwC, www.pwc.com/gx/en/about.html. Accessed 20 Jan. 2025.

“Coopers, Price Waterhouse Plan to Merge.” Los Angeles Times, 19 Sept. 1997, www.latimes.com/archives/la-xpm-1997-sep-19-fi-33845-story.html. Accessed 20 Jan. 2025.

"Global Annual Review 2023." PwC, www.pwc.com/gx/en/global-annual-review/2023/pwc-global-annual-review-2023.pdf Accessed 20 Jan. 2025.

“Global Annual Review 2024.” PwC, www.pwc.com/gx/en/about/global-annual-review.html. Accessed 20 Jan. 2025.

“History and Milestones: PwC.” PwC, www.pwc.com/us/en/about-us/pwc-corporate-history.html. Accessed 20 Jan. 2025.

“How We Are Structured.” PwC, www.pwc.com/gx/en/about/corporate-governance/network-structure.html. Accessed 20 Jan. 2025.

“PwC Clients 2024.” Big 4 Accounting Firms, big4accountingfirms.com/pwc-audit-clients-list. Accessed 20 Jan. 2025.

“PwC Develops Tools to Assess Covid-19 Impact on Businesses.” PwC, 2020, www.pwc.com/gx/en/about/assets/pwc-develops-tools-to-assess-covid-19-impact-on-business.pdf. Accessed 20 Jan. 2025.

“Services.” PwC, www.pwc.com/gx/en/services.html. Accessed 20 Jan. 2025.

Waxman, Olivia B. “The Academy Awards Scandal That First Got PwC Its Job Counting Oscars Votes.” Time, 2 Mar. 2018, time.com/5182902/pwc-academy-awards-oscars-snub. Accessed 20 Jan. 2025.