Accountants13 Mar 2022 14:12
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The Big Four face a fraught exit from Russia
Deloitte, EY, KPMG and PwC say they will cut ties but with 15,000 staff there the firms are deeply enmeshed
None of the accounting firms have left Russia yet, with Deloitte saying the process could take a few weeks while EY reckons it could be 12 months before it departs © FT montage/Bloomberg
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Michael O’Dwyer in London MARCH 12 2022
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Western companies have cut ties en masse with Russia since Vladimir Putin sent his troops into Ukraine. But even as banks such as Goldman Sachs and energy companies like BP said they were exiting the market, they gave precious little clarity on what that means in practice.
The Big Four accountants joined the corporate exodus but are still grappling with the practicalities, according to multiple people who spoke to the FT. “It’s all rabbit in the headlights stuff,” said one.
Deloitte, EY, KPMG and PwC employ about 15,000 people in offices across Russia and are deeply enmeshed in the country’s economy. Its biggest companies are clients, including those owned by the state: KPMG worked for Gazprombank and Lukoil while EY audits Rosneft, VTB Bank and Evraz. PwC signed the accounts of Sberbank and PhosAgro and even worked for Russia’s central bank. Deloitte audits Polyus, Russia’s largest gold producer.
That all makes pulling out a torturous process. Here is a detailed look at where things stand.
Have the Big Four actually left Russia?
No. Deloitte said its “transition will take a few weeks”. PwC is aiming to exit “as soon as possible, which should not be more than six months”. KPMG has said nothing about when it will exit.
EY’s global leaders told thousands of partners on a call on Tuesday that its exit would take eight to 12 months, insiders told the Financial Times.
EY’s departure could be reversed if the situation in Russia changed, they were told. The message from the firm’s leaders “felt like hope that it could blow over”, one of the people said. However, a person close to EY said the remark about a reversal was unscripted and that it would be a mischaracterisation to suggest the firm was dragging its feet over leaving Russia.
The problem is that the Big Four are networks of separately ow
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