Monday, April 29, 2024

PwC set to become smallest big four firm

 PwC set to become smallest big four firm

PwC is likely to be the smallest of the big four accounting partnerships at the end of the financial year, after more than 200 partners left the once-ascendant firm following its tax leaks scandal.
PwC chief executive Kevin Burrowes expects the partnership to settle at about 650 partners following a promotion round in July, compared to 882 at the same point last year. That would position it below KPMG, the smallest of the big four, which had 713 partners at the end of the last financial year.
PwC’s chief executive Kevin Burrowes expects the partnership to have about 650 members in July, down more than 200 from a year prior.  Alex Ellinghausen
Australia’s highest earning firm in 2023, PwC’s revenue could dip below that of KPMG, with the firm hit by the firesale of its government consulting business and a depressed consulting market.
Despite the anticipated fall in revenue, the success of a $100m cost-cutting exercise – which carved more than 30 partners and 300 staff from the organisation – is expected to deliver better than expected profit distributions to the remaining partners.
“There have been economic headwinds for the whole profession … so it was appropriate for us to make sure the firm was properly managed. That’s a core part of our strategy,” Mr Burrowes said.
Unfortunately, we had to let some people go. That’s always very, very difficult, but it’s the right thing to do to make sure we can invest in the future, invest in promoting our partners and invest in new capabilities that we need in order to have a well run business,” he said.
About 100 partners left PwC to join public sector consulting spinoff Scyne, while up to 37 were pushed into early retirement in the latest round of cuts. Firms as varied as DXC Technology, law firm Ashurst and commercial real estate agency Cushman & Wakefield have picked up PwC partners since the beginning of this year.
Big four rivals have largely stayed away, but KPMG swooped on senior tax partner Josh Cardwell last month.

Audit, tax focus

As part of a new three-year strategy released on Friday, the firm will refocus on its core tax and audit capabilities, which have held up in the face of severe disruption to its consulting arm.
After losing a string of audit clients at the height of the scandal, new clients have begun to return to PwC, with services contractor Downer EDI signing on earlier this month after a dispute with KPMG.
But fears remain within the firm that lucrative clients such as Macquarie Bank, which is currently reviewing its audit arrangements, could follow Westpac in moving on from PwC.
Mr Burrowes declined to comment about specific clients, but said he was “very happy” with the performance of the audit division, which, he said, was attracting new business.
“We’ve got a high-quality audit practice, and we’ll keep on serving our clients where those clients wish to carry on,” he said.

Consulting uncertain

The status of the consulting arm is more uncertain under the new plan. Hollowed out by the loss of 100 partners to Scyne and numerous cuts to remaining staff, PwC is targeting technological transformation and artificial intelligence as new markets for its advisory division.
“There’s a huge amount of reinvention work companies will have to do, and our cloud and digital consulting skills will be right at the core of that,” Mr Burrowes said.
But Mr Burrowes conceded PwC faced challenges in rebooting its consulting business: “Clearly, if the economic position changes a bit that may help. It’s a tough market for everybody at the moment, but I’m very positive about the outlook for advisory”.
The new strategic plan was accompanied by the election of six new members to its governance board. The partners – Emma Hardy, Ewan Barron, Ian Hockings, Marcus Laithwaite, Michael Fung and Rosalie Wilkie – will join the board in July.
PwC committed to appointing independent directors to its governance board following the Switkowski review into the firm’s governance and culture, and said the recruitment process was “well underway” ahead of a July deadline.
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Maxim Shanahan is a professional services reporter at the Australian Financial Review. Email Maxim at max.shanahan@nine.com.au

Chinese spies popping up all over Europe: AI Can Tell Your Political Affiliation Just by Looking at Your Face

Suddenly, Chinese spies seem to be popping up all over Europe




 Warsaw: One of the men, a young Briton known for his hawkish views on China, worked as an aide to a prominent member of the British Parliament. Another, a German citizen of Chinese descent, was an assistant to a member of the European Parliament representing Germany’s far-right.

While from different countries and seemingly divergent backgrounds and outlooks, both men became ensnared last week in accusations of espionage on behalf of China – and a widening pushback in Europe against malign Chinese influence in politics and commerce.
In all, six people in three separate cases were charged in Europe with spying for China: two in Britain and four in Germany. Warsaw: One of the men, a young Briton known for his hawkish views on China, worked as an aide to a prominent member of the British Parliament. Another, a German citizen of Chinese descent, was an assistant to a member of the European Parliament representing Germany’s far-right. While from different countries and seemingly divergent backgrounds and outlooks, both men became ensnared last week in accusations of espionage on behalf of China – and a widening pushback in Europe against malign Chinese influence in politics and commerce. In all, six people in three separate cases were charged in Europe with spying for China: two in Britain and four in Germany.


Chinese sailors perform signals to mark the PLA Navy’s 75th anniversary in Qingdao, China, last week. One of the people charges allegedly passed on sensitive information about German marine propulsion systems – useful for a navy.
Chinese sailors perform signals to mark the PLA Navy’s 75th anniversary in Qingdao, China, last week. One of the people charges allegedly passed on sensitive information about German marine propulsion systems – useful for a navy.CREDIT: GETTY
On Friday, as the two Britons made an initial court appearance in London, US Secretary of State Antony Blinken met in Beijing with Chinese President Xi Jinping in the latest effort by the two rivals to keep communications open even as disputes escalate over trade, national security and geopolitical frictions.
The espionage cases in Britain and Germany, the first of their kind in two countries that once cultivated warm relations with Beijing, served as eye-catching exclamation points in Europe’s long, often anguished break-up with China.
Shortly after British and German officials announced the charges, Dutch and Polish authorities raided the offices of a Chinese security equipment supplier as part of a crackdown by the European Union on what it sees as unfair trading practices.
The Chinese flag flies in front of the Chinese embassy in Ber;in on Monday. The Chinese flag flies in front of the Chinese embassy in Ber;in on Monday.CREDIT: DPA/AP
It was the first time that the bloc’s executive arm, the European Commission, had used a new anti-foreign subsidy law to order a raid on a Chinese company. In early April, Sweden expelled a Chinese journalist who had been a resident of the country for two decades, saying the reporter posed a threat to national security.
After years of regular tiffs over trade followed by reconciliation, Europe “has lost patience with China,” said Ivana Karaskova, a Czech researcher at the Association for International Affairs, an independent research group in Prague, who until last month served as an adviser to the European Commission on China. China still has steadfast friends in the EU, notably Hungary, she added, in “the multidimensional chess game” between the world’s two largest economies after the US. But Europe, Karaskova said, has moved from a position of “total denial” in some quarters over the danger posed by Chinese espionage and influence operations to “take a less naive view, and wants to defend European interests vis-à-vis China”. US Secretary of State Antony Blinken meets with Chinese President Xi Jinping at the Great Hall of the People in Beijing on Friday.
US Secretary of State Antony Blinken meets with Chinese President Xi Jinping at the Great Hall of the People in Beijing on Friday.CREDIT: AP
Accusations last week that China was using spies to burrow into and influence the democratic process in Germany and Britain caused particular alarm, as they suggested a push to expand beyond already well-known, business-related subterfuge into covert political meddling, something previously seen as a largely Russian specialty.
But, according to China experts, those accusations and the flurry of charges indicated not so much that Beijing was ramping up espionage but that European countries had stepped up their response. “Countries have been forced to get real,” said Martin Thorley, a British China expert and the author of All That Glistens, a forthcoming book detailing how what London trumpeted a decade ago as a “golden era” of Sino-British friendship during the prime ministership of David Cameron made it easy for China to suborn politicians and businesspeople. The “golden era” has been widely mocked as a “golden error”. Cameron, who is now Britain’s foreign secretary, has in recent months become an outspoken critic of China. “A lot of the facts changed,” he said during a visit to Washington in December, declaring that China had become “an epoch-defining challenge”.
Australia, US and Japan deepen defence ties to deter China Play video
1:32 Australia, US and Japan deepen defence ties to deter China
New air defence strategy agreed by Australia, Japan and US to counter Chinese threats in Pacific.
His change of heart mirrors a wider shift across much of Europe in attitudes to a rising superpower that long counted on European countries, particularly Germany, to push back against what it denounces as “anti-China hype” emanating from Washington.
Germany’s security service has been warning publicly about the risk of trusting China since 2022, when, shortly after Russia started its full-scale invasion of Ukraine, the head of its domestic intelligence agency, Thomas Haldenwang, told parliament, “Russia is the storm, China is climate change”.
The agency, known by its German acronym, BfV, said in an unusual public warning last year, “In recent years, China’s state and party leadership has significantly stepped up its efforts to obtain high-quality political information and to influence decision-making processes abroad”.
Germany’s political leadership, however, has until this week been far more equivocal. Chancellor Olaf Scholz recently made a state visit to China, Germany’s biggest trading partner, to discuss trade and market access.
But its interior minister, Nancy Faeser, has now given a blunt assessment of China’s activities. “​​We are aware of the considerable danger posed by Chinese espionage to business, industry and science,” she said. “We are looking very closely at these risks and threats and have issued clear warnings and raised awareness so that protective measures are increased everywhere.”
China’s Foreign Ministry responded by dismissing the accusations as a groundless “slander and smear against China,” demanding that Germany “stop malicious hype” and “halt anti-China political dramas”.
Mareike Ohlberg, a China expert and a senior fellow at the German Marshall Fund in Berlin, said that “for a long time China was spared big public warnings”. Now, she said, German authorities are “more willing to call things out, or no longer have the patience not to call things out.” Three of the four people arrested in Germany, a husband and wife and one other man, appear to have been involved in economic espionage using a company called Innovative Dragon to pass on sensitive information about German marine propulsion systems – of great value to a superpower interested in building up its navy.
They also used the company to buy a high-powered, dual-use laser, which they exported to China without permission. The fourth person, in what prosecutors called “an especially severe case”, was Jian Guo, a Chinese-German man who has been accused of working for China’s Ministry of State Security. His regular job was as an assistant to Maximilian Krah, a member of the European Parliament for the far-right party Alternative for Germany – a rising political force friendly to China and Russia – and its top candidate for elections in June.
Since then, the public prosecutor in Dresden has begun a “pre-investigation” into how much Krah knew of his employee’s ties to China. On Wednesday, his party decided to keep supporting Krah’s bid for reelection to the European Parliament but disinvited him from campaign stops. Thorley said the spying cases had sounded the alarm over Chinese activities but were only a small part of efforts by China to gain influence and information. More important than traditional espionage, he said, is China’s use of a “latent network” of people who do not work directly for the Ministry of State Security but who, for commercial and other reasons, are vulnerable to pressure from the Chinese Communist Party and its myriad offshoots. “This has been bad for a while and has been left far too long,” he said.
The two men accused of espionage in London – Christopher Cash, 29, and Christopher Berry, 32 — were arrested in March 2023 but released on bail and were not named publicly until they were charged.
Cash was a parliamentary researcher with links to the governing Conservative Party and a former director of the China Research Group, a body that often takes a hardline view on China and hosts podcasts with critics of Chinese interference. His former colleagues include Alicia Kearns, a member of the governing Conservative Party who heads parliament’s influential Foreign Affairs Committee, and her predecessor in that role, Tom Tugendhat, who is now the security minister.
In a statement this week, London’s Metropolitan Police said Cash and Berry were charged with violating the Official Secrets Act and had provided information “intended to be, directly or indirectly, useful to an enemy.” It added: “The foreign state to which the above charges relate is China.”
“It took a hell of a long time to wake up, but we finally see some movement,” said Peter Humphrey, a British citizen whom China accused of illegally obtaining personal information while doing due-diligence work for pharmaceuticals company GlaxoSmithKline, and who spent two years in a Shanghai jail with his wife.
He was in jail suffering from cancer when Cameron visited the city in 2013 with a delegation of British businesspeople. “It was sickening,” recalled Humphrey, an external research fellow at Harvard University’s Fairbank Centre for Chinese Studies. “Nobody in the higher levels of the British government,” he said, “wanted to hear a bad word about China because of business interests.”
When Xi travels to Europe next month, he will skip Germany and Britain and instead visit Hungary and Serbia, China’s last two staunch allies on the Continent, and France
This article originally appeared in The New

York
Times.




Gizmodo AI Can Tell Your Political Affiliation Just by Looking at Your Face: “A study recently published in the peer-reviewed American Psychologist journal claims that a combination of facial recognition and artificial intelligence technology can accurately assess a person’s political orientation by simply looking at that person’s blank, expressionless face. The study was authored by researchers at the Graduate School of Business at Stanford University. Researchers write that, prior to the experiment, they had 591 participants answer a political questionnaire that provided insights into their political beliefs. 

Those same participants were then scanned by researchers’ AI algorithm, which attempted to assess where they fell on the political spectrum. The algorithm could generally tell what a person’s political orientation was with a high degree of accuracy, even when that person’s identity was “decorrelated with age, gender, and ethnicity,” researchers write. 

The “algorithm’s predictive accuracy was even higher” when it had access to “participants’ age, gender, and ethnicity,” researchers write. The levels of accuracy were broken down in different situations and expressed in formulas, but the researchers summarized it as being “on par with how well job interviews predict job success, or alcohol drives aggressiveness.”


‘Like a film in my mind’: hyperphantasia and the quest to understand vivid imaginations Guardian 


Scientists push new paradigm of animal consciousness, saying even insects may be sentientNBC. So the Jains are right….


The universe may be dominated by particles that break causality and move faster than light, new paper suggests Live Science


Startling Discovery: Cancer Can Arise Without Genetic Mutations SciTech Daily 


Guardian comedian - the 10 funniest things I have ever seen (on the internet)

  The 10 funniest things I have ever seen (on the internet)

Anirban Dasgupta at Melbourne comedy festival




THE 3,000TH DANCE WITH BEARS John Helmer.  “Fascinating memoir.”



Homebuyers find a quieter Côte d’Azur in its hill towns



Homebuyers find a quieter Côte d’Azur in its hill towns

Properties in charming medieval locations away from the crowds lure buyers with discounted prices too

Tourrettes-sur-Loup is perched on a hill between Vence and Grasse, one of the area’s more industrial towns, famous for its perfume industry. 

Below a mix of medieval and Romanesque buildings arranged along cobbled streets, its southern side drops away in a steep cliff providing striking views. 

“The town has lots of charm and is ideally located close to [Nice] airport and the surrounding areas we enjoy like Cannes, Villefranche-sur-Mer and Èze,” says John. 


“We aren’t beach people so we actually prefer the mountainous location in the hills surrounded by the olive and fruit trees.” 

Besides being cheaper than the area’s leading coastal towns, inland villages and their surrounds provide a quieter environment with less traffic, especially in the peak summer months, and opportunities to acquire larger homes with land, while retaining some of the advantages of the Côte d’Azur location, such as lucrative rental opportunities in the summer months.




The problem with the coast, apart from the price, is that most of the houses are overlooked and you don’t generally get any land [with them]. So, if you have children, they don’t have much of a garden unless you’re paying tens of millions of euros,” says Christian Levett, a retired commodities trader, who has owned a home in Mougins since 2006.         

Levett, who lives in Florence and got to know Mougins while working in Monaco, is a patron of the town’s thriving cultural scene. In June, he will open its newest museum, the Female Artists of the Mougins Museum (FAMM), showing exclusively work he owns by women. It replaces the Mougins Museum of Classical Art, which also included items from his extensive collection of Greek, Roman and Egyptian antiquities, and closed in August 2023. Since 2010, Levett has also owned local restaurant L’Amandier de Mougins, where the Salon Picasso commemorates the Spanish artist who spent the final years of his life in Notre-Dame-de-Vie, his villa outside the town. 


We aren’t beach people so we actually prefer the mountainous location in the hills surrounded by the olive and fruit trees



If Spencer buys the house in Mougins, he will spend roughly €200,000 refurbishing it, then live there between October and March, taking advantage of the six-month temporary long stay visa available to those from the UK, renting it out in the summer months to holidaymakers or those attending conferences in Cannes. He estimates it will rent for €40,000 per month in the peak months of June to September, and €20,000 in May and October.



In recent months, the range of mortgages available to both French and non-French buyers has grown, increasing the options for those considering a purchase.

“Last year, as interest rates increased, French banks withdrew many products for foreign borrowers and it became very difficult to find a mortgage,” says Fiona Watts of International Private Finance, which helps European homebuyers with finance for purchases on the Côte d’Azur. 

“But since January, the range has increased significantly.” The ECB kept interest rates stable at its last meeting on April 11. But market watchers anticipate cuts later in the year, and falling mortgage rates as a result.



We think that conditions for those seeking finance this year will continue to improve,” says Liam Wilkinson, who runs Fortier Finance, a Nice-based financial adviser that specialises in providing finance for homes in the south of France and the Alps, for non-French clients. 

Those considering a purchase must therefore balance the chance to borrow at lower rates later in the year with the risk that lower mortgage rates increase demand from buyers and current discounts disappear.   

“We did talk about waiting, and yes, we may have lost out a little when it comes to mortgage rates, but current rates are not high when you look historically, and I don’t think they will ever go back below 3 per cent,” says John. 

“We felt like there were good deals to be had on local properties right now, which might disappear.” Spencer is biding his time, however, waiting for interest rates — and with them mortgage rates — to fall. 

His mortgage adviser has drawn up an attestation de financement, a formal statement issued by financial advisers to support a home purchase, which Spencer has given to the vendor of the Mougins home. 

But he has not yet made a formal offer.   “I know I’m in a precarious position but even if mortgage rates fall, I think there will be a lag before that feeds through to greater demand,” he says. “My optimum time for a purchase is the next three to six months.”