A sub-topper in the accounting world was the first to come up with it: Grant Thornton, also active in the Netherlands, decided to withdraw from Russia last Thursday. The reason: “The invasion of Ukraine,” which has “shocked” Grant Thornton.
The four largest accountancy firms – the ‘big four‘, which control the lion’s share of all multinationals – followed suit. Sunday came both KPMG if PwC out with a statement. Both announced their retirement from their Russian branches. They are also leaving Belarus. Monday morning followed EY with the same decision, closed Monday afternoon Deloitte join the queue.
In concrete terms, this means that the offices are separating the Russian branch from their worldwide ‘country network’, as they call it. The Russian departments, which employ thousands of people per company, can decide to continue independently. Then they just have to choose a new name.
The world’s largest consultancy firms are also taking action: Accenture announced last week to stop immediately in Russia (and in the press release casually thanked the 2,300 Russian workers who had become unemployed for their “dedication”), McKinsey and Boston Consulting Group are no longer taking on new Russian orders. Their offices will remain open.
These business service providers are joining the wave of Western companies – their customers – who announced last week that they were cutting ties with Russia. Oil giants BP and Shell were the first, followed by well-known names in many other sectors: Apple, Heineken, IKEA, Disney, Volkswagen.
Also read this story: Putin’s war is a moral test for Western companies
Russian subsidiary
The break with the Russian department poses practical difficulties for the accountancy firms. And specifically for the control of multinationals with subsidiaries in Russia. Normally, the accountant who signs the annual accounts involves colleagues in other countries to audit foreign subsidiaries. But of course that is no longer possible without Russian colleagues. It is still unclear how the offices will resolve this.
Another painful issue on the table for accounting firms is whether they are cutting ties with Russian clients. And if so: with which one? This is where their strategy differs so far.
KPMG goes the furthest: the office says goodbye to all Russian customers, a spokesperson for the Dutch department said. EY said in its statement that it would cut ties with “all Russian government clients, state-owned enterprises and sanctioned entities or individuals worldwide.” PwC does not say anything about breaking customer relationships in its statement, a spokesperson only wants to say that PwC is complying with the sanctions. Deloitte has also not (yet) said anything about whether or not to say goodbye to Russian customers.