On Monday I asked of the Big 4 accountants:
Which firm has the most offices in any one country?
And which country is it?
There were lots of suggestions. and none were right.
The actual answers are PWC, in Sweden, where it has 94 offices. And yes, I know that list looks to have 95 offices on it, but two look to be in one place and the only way to be consistent in this research is to count multiple offices in one location as being one effective office, or Deloitte would (for example) have two offices in London that are, in fact, absolutely adjacent to each other, which would render all the data absurd.
This is the data for the top two countries:
Does anyone have any clue why the Big 4 are so over-represented in Scandinavia, by the way? Deloitte even have eleven offices in Iceland.
Which then brings me to your next starter for ten. Note that column at the right hand end: population per office? Would anyone like to guess where that figure is lowest? Or to put it another way, where is the place in the world where the Big 4 seem most over-represented based on the number of people in the local population?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Luxemburg
The SME market in Sweden is is much larger in proportion to most other developed Western economies. There is therefore a view that audit firms need to be physically closer to their clients than in other countries.PwC says that 98% of its Swedish clients are companies with fewer than 50 employees.
The Scandinavian countries seem to be suffering a resurgence of rightwing fascism. Could this be a cause or an effect?
Neither, I am sure
I can see no link at all
Answering to the new question: BVI? Population of just under 30,000 with each of the big 4 having an office there gives a score of below 7,500.
Good try
Not right though
Is it perhaps that the Scandinavian firms still like to have a large number of small offices in small towns? At 3,000 staff, that’s an average of about 32 per office, which is a pretty small office for an accountancy firm.
Picking a name completely at random from PwC’s list of offices, the first town I looked at was Harnosand, which Wikipedia tells me is a town of about 18,000 people half-way up the east coast. The office’s web-page starts off by offering book-keeping services.
Basically, they seem to be operating in the small business sector. You’d expect a large number of small offices, and this is exactly what we find.
I agree – but why are they so strong in this market in Scandinavia and not elsewhere?
The Big 4 are generally made up of individual national partnerships. Different countries have different cultures – it may simply be that the Scandinavian partnerships choose to maintain a strong SME business even though other PwC partnerships have focused on larger clients and reduced their SME portfolio.
The Cayman Islands?
No!
Probably some tax haven with nice weather, but which is otherwise God’s waiting room!
Well you’re right that it could be considered a tax haven….
If you include places which you might call a state within a state, there’s always the City of London.
That would win in that case
Is it because in Sweden the accountancy standards are higher and therefore this is more work to do? The Big 4 have to do it properly – more regulation. Less likely to have Enron type debacles?
And that also there are more separate firms – less corporations?
And I’d like to think so. But I’m preparing for my hopes to be dashed.
Maybe it is because the Big 4 are doing lots of lobbying for deregulation over there. Another country that they can trash perhaps?
I believe that it may well be that these states are actually more entrepreneurial than average
Which shatters a myth
Now that is interesting.
Isle of Man?
No, although a good guess
Up until 2010, Sweden require all limited companies to be audited. They still have the 3rd lowest thresholds in the EU (behind Malta and Finland):
Net turnover: €300,000
Net Assets: €150,000
Number of employees: 3
‘PwC chief executive Mikael Eriksson explained. “PwC has 140 offices in Sweden and that is an expression of how important smaller clients are. Out of 50,000 clients in Sweden, 49,000 are smaller clients with 50 employees and under.”’
It looks like several local firms merged with them in the run up to the 2010 thresholds introduction, which might explain the difference between the 140 offices mentioned above and your 94 locations. I assume the population of Sweden is widely dispersed so as to make it necessary to require so many offices.
Thanks
Most of the Swedish offices are “one man and their dog” operations doing book keeping for small businesses. The geography of Sweden also doesn’t help! I visited one of these offices personally and can vouch for this, there was no dog however
OK, but why?
Why not? It’s perfectly good work, why shouldn’t PwC do it?
I’m saying it is odd
Most would agree
There’s not much margin in it
Isn’t there?
That’s my client base you’re talking about there. We do quite nicely out of it, so why shouldn’t PwC?
And so did I once upon a time
But I wasn’t bearing a big central overhead
True, but then that’s pretty much a fixed cost. Adding a small office catering to SMEs doesn’t increase it, so all that margin is gravy.
The UK Big 4 are trying to expand into SMEs, for instance. I can’t see them trying that if there’s no margin in it.
I doubt it’s fixed
I think that’s the point. There is no big central overhead, these offices are one man and their dog so the margin works in that market with that set up if you are looking for some mysterious reason for this number of offices there is none I can assure you
Out of interest, touching on the Scandinavians, although possibly you have already seen it:
Not sure about the number of offices resulting from the merger; and doubt this (Deloitte North West Europe) can be a “firm” per se as a separate entity from those trading as Deloitte (audit, consulting, advisory, legal, etc.) on each country
sharing anyway:
http://www2.deloitte.com/ch/en/pages/press-releases/articles/deloitte-creates-north-west-europe-firm.html
Interesting…
There’s a punting saying that small can also be beautiful.
Liechtenstein is both, and has a few Big4 offices.
Small
Bu not small enough
I’ll gamble on Gibraltar.
Sorry
I reckon no one is going to get this one
How about …
Bonaire
Population c. 18,000
3 offices (Deloitte, KPMG, PWC)
So a score of about 6,000
You’ve been researching
And you’re right
What do I win? 🙂
Satisfaction
A mention tomorrow morning….
St maarten. (St Martin)
That’s an interesting guess
I’ll throw in the Marshall Islands
Another good try
My guess would be Gibraltar, unless there’s an office in San Marino.
After that, it’s silly answers like Tristan da Cunha and the Falkland Islands. Or one of the archipelago states and dependencies of Micronesia – the ones without a business registry for shell companies – where there are likely to be multiple office locations served by a single peripatetic auditor.
Answer soon….