Taking Booz on board

Not so long ago, the world's main accounting firms were known as the Big Five. They lost a member in 2002, when Arthur Andersen imploded following the revelation of massive accounting fraud at Enron.

The rest is history. In 2002, the US Sarbanes-Oxley Act banned accounting firms from doing consulting work for audit clients. PwC (PricewaterhouseCoopers) and others saw the writing on the wall and sold their consulting arms.

But today, the Big Four are once again heavily involved in consulting. While subject to the same independence rules required by Sarbanes-Oxley, the accounting firms are more or less compelled to be in the business for competitive reasons - any firm that stays out risks being overtaken by rivals in revenues and resources.

PwC never really got out of consulting. It sold its main consulting business to IBM in 2002 but kept certain services, such as the ability to advise clients on regulations. It has also been rebuilding its broader consulting franchise, and, on April 3, that initiative took a big step forward when PwC officially completed its acquisition of Booz & Co, one of the world's biggest corporate advisory firms with revenues of US$1 billion in its last fiscal year.

The Booz acquisition gives PwC a lot more depth in its strategic consulting arm - which advises big companies on business and financing strategies. It basically doubled PwC's strategic consulting operations in Asia.

The idea is that the strengths of PwC and Booz complement each other. Booz is good at big-picture strategy, while PwC is good at nuts-and-bolts implementation, such as helping firms build the technology systems - for example, mobile payment systems - that support a business strategy.

The acquisition also capitalises on greater demand for brand management and business development at a time when mainland firms are splurging on overseas acquisitions.