FirstFT: PwC plans to cut its US consulting work

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PwC is planning to cut back on its consulting work to the tune of several million dollars and implement changes to pay for its US leadership.

The plan would target miscellaneous consulting work, which would be phased out by 2025, and would not touch the firm’s tax work. PwC was set to announce the details in May, but it was embroiled in a scandal in Australia in which partners were revealed to have misused confidential information about the government’s tax plans, according to people familiar with the situation.

In addition to cutting consulting, PwC aims to implement pay clawback provisions for its seven-strong US leadership team, which will be activated in the event of ethics scandals or other firm-wide failures.

The accounting firm’s US leaders are keen to avoid criticism from clients and to improve its reputation, particularly among younger potential recruits.

PwC’s move comes shortly after one of its Big Four rivals, EY, failed to spin off the consulting arm of its business. Before going ahead with its plan to curtail consulting, PwC had suggested large accounting firms act together via an industry group called the Center for Audit Quality, but it did not get cross-industry backing for its ideas.

The move will put pressure on other large accounting firms to implement changes. “We have really good competitors but what they do is up to them,” said Tim Ryan, senior partner of PwC US.

Read the full story on PwC’s plan to cut down its consulting business here.

Here’s what else I’m keeping tabs on today:

• Biden’s itinerary: The US president is holding a meeting with his Vietnamese counterpart, Vo Van Thuong, in a bid to strengthen relations between the two. He will then travel to Alaska where he will mark the 22nd anniversary of 9/11.

• Results: Oracle and Vistry Group report.

Five more top stories

1. Google is preparing to take on the US government in a landmark antitrust case over contracts that the justice department alleges illegally shut out competitors. Legal observers say the outcome will be an important test of the ambitious strategy of US regulators and help determine the Biden administration’s efforts to rein in Big Tech.

2. Interview: Janet Yellen touted the US plan to increase funding for the World Bank that was agreed at the G20 summit at the weekend. The US Treasury secretary also defended the group’s joint statement, particularly accusations that it had weakened its position on Ukraine, telling the FT the statement was “substantively very strong”.

3. Venezuelan bonds have rallied as investors bet on a diplomatic breakthrough with the US. News of talks between the two countries have pushed bonds to trade at 10 to 11 cents on the dollar, up from 8 to 9 cents a few weeks ago, as investors bet on warming relations that could lead to a softening of US sanctions.

4. Nato is preparing its biggest live joint command exercise since the cold war next year, assembling more than 40,000 troops to practise how the alliance would attempt to repel Russian aggression against one of its members. The Steadfast Defender exercise will start in the spring as part of Nato’s rapid push to transform from crisis response to a war-fighting alliance.

5. Spanish football chief Luis Rubiales has resigned from his post days after prosecutors filed a criminal complaint against him for kissing Spanish player Jenni Hermoso during World Cup celebrations. Rubiales’s actions have stirred anger about the treatment of women in sport and the prevalence of machismo in Spanish society.

The Big Read

Singapore’s open, trade-reliant economy has proved resilient to external shocks such as rising global protectionism and supply chain fragmentation. But as the city-state wrestles with rising inequality — linked to unrestrained capital inflows from the US, Europe and especially China — some are questioning whether its economic model so reliant on foreign capital is benefiting citizens as it once did.

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Map of the day

A powerful earthquake struck Morocco on Friday night, killing more than 2,000 people and injuring another 2,000, according to reports on Sunday. The quake is the strongest to hit north Africa in 120 years. Rescuers are combing through the rubble as the window to reach survivors starts to close.

Take a break from the news

There are few better places to get a sense of Switzerland than in Zürich’s street markets. From Bürkliplatz to Kanzlei, FT Globetrotter takes us to markets filled with stories about the country, its people and its economy.

Additional contributions from Grace Ramos and Benjamin Wilhelm