Monday, June 30, 2014
The Chinese government and its allies in Hong Kong’s business elite seem to be in full panic mode over the Occupy Central movement (which, let us recall, has not yet occupied so much as a garden shed). First came the PRC government’s stern warning earlier this month in the form of a White Paper reminding Hong Kong who was boss. Presumably emboldened by this, the accountants decided that their input would be valued by the public. Yes, the accountants: the Big 4 in Hong Kong (Ernst & Young, KPMG, Deloitte, and PricewaterhouseCoopers) published a joint statement last Friday in three Chinese-language newspapers [Chinese | English (scroll down)] announcing their opposition to the Occupy Central movement.
Overall, I don’t have much to add to Paul Gillis’s blog post:
The arrogance of the firms is stunning. Did they really think their voice would alter the debate? Do they really think people respect their opinions that much? Did they not see that all they were doing is setting themselves up for ridicule while diminishing their brand worldwide?
Paul also adds some thoughts about whether, if they did this at the behest of certain big clients, they have therefore compromised their independence under IAS (International Accounting Standards).
I wonder a bit if the statement was drafted by someone with PRC connections. To be fair, it doesn’t read exactly like PRC Chinese; there are many places where it uses words and expressions not common in PRC officialese. (For example, it says 各式各样 instead of the more common 各种各样, and 进行著 instead of 进行着.) But in the signature line it names Deloitte Hong Kong as德勤.關黃陳方會計師事務所 instead of using Deloitte Hong Kong’s official name, 德勤.關黃陳方會計師行. For those who don’t read Chinese, it used the common mainland term for “accounting firm” (kuaijishi shiwusuo) instead of a different term that Deloitte Hong Kong actually uses (kuaijishi hang). If you check out this page, you can see that Deloitte uses “kuaijishi hang” for its Hong Kong entity and “kuaijishi shiwusuo” for its mainland PRC entity. (Thanks to sharp-eyed commenter “percysmith” on Paul Gillis’s blog, who spotted the misnaming.)
Not surprisingly, “[w]hen the Financial Times approached the big four’s global headquarters for comment, it emerged that they had only learned of the advertisement through press reports.” The various local entities sporting the names of the Big 4 are typically not properly characterized as “branches”; they are more like franchises that bear a common name and may have some level of cooperation, but they don’t have common ownership. The Big 4 in Hong Kong could have issued this statement without the knowledge or approval of any other Big 4 offices anywhere in the world.