40 Tuesday April 5 2022 | the times
Business
Britain’s seventh-biggest accountancy
firm has benefited from the push by
politicians and regulators to reduce the
stranglehold of the so-called Big Four.
Mazars reported record annual reve-
nues last year as it continued to take
audit work from its bigger rivals, Deloit-
te, EY, KPMG and PwC.
The firm started checking Goldman
Sachs’ European accounts last year,
having taken over from PwC. It also
began signing off on the UK books of
AIG, the American insurance giant and
another ex-PwC client.
It has been previously reported that
Mazars is paid about £4 million a year
for the Goldman work, and about
£1 million a year in fees from AIG.
Behind the story
I
t could be a vast
equity sale, a
$70 billion takeover
plan, or even a club
crawl through Berlin:
Elon Musk is rarely
hesitant to share what’s
on his mind. Frequently,
however, the billionaire’s
tweets have failed to
paint the full picture
(Callum Jones writes).
His 2018 post about
taking Tesla private, for
which he claimed funding
had been secured, led to
charges of securities
fraud, which he settledwith US regulators. He
polled users on whether
he should sell down his
stake last November, only
for filings to reveal he
had already formalised a
plan to do so weeks
beforehand. Whether he
refused to enter a
German nightclub this
weekend, or was in fact
refused entry, remains
the subject of debate.
Musk’s focus on Twitter
recently turned to the
platform itself. A “de
facto bias” was distorting
discourse on it, heargued, threatening to
establish a rival platform.
As with previous
interventions, all was not
what it seemed.
As he started raising
concerns about Twitter
on March 24, he omitted
to mention a pertinent
detail: namely, the stake
he had started to build in
the company. The stock
market filing that
revealed it on Monday
was dated March 14.
He is friends with Jack
Dorsey, the Twitter co-
founder, who departed aschief executive last year,
and in December he
posted a meme that
superimposed the face of
Parag Agrawal, Dorsey’s
successor, on to an image
of Joseph Stalin.
He has called into
question the platform’s
moderation policies and
raised the prospect of
opening up the algorithm
it uses to curate content
for users’ feeds.
Time will tell whether
his involvement brings
innovative solutions, or is
just a vexing distraction.Musk move fires speculation
Continued from page 37
at Wedbush Securities, said: “Given
Musk’s longstanding critical view of
Twitter and social media platforms, it
was viewed that Musk could look to
build a new social media platform to
compete with Twitter and others.
“Instead it looks like Elon has his eyes
laser set on Twitter and we would ex-
pect this passive stake [to be] just the
start of broader conversations with the
Twitter board/management that could
ultimately lead to an active stake and a
potential more aggressive ownership
role of Twitter.”
His investment was disclosed by a
form which often signals that the party
is a passive investor, rather than an
active shareholder seeking to exert
control. It remains unclear whether he
plans to buy more shares in Twitter, or
hopes to join its board. Dorsey, a friend,
is due to vacate his seat next month.
“It does send a message to Twitter,”
Thomas Hayes, managing member at
Great Hill Capital, a hedge fund, told
Reuters. “Having a meaningful stake in
the company will keep them on their
toes, because that passive stake could
very quickly become an active stake.”
The unexpected investment will
broaden Musk’s corporate empire,
which already spans space, cars, tun-
nels and brain chips.
While the lion’s share of his fortune is
tied up in Tesla shares and stock op-
tions, the billionaire also owns a stake
in SpaceX worth about $40 billion.Mazars lifts sales as it challenges rivals
Revenues in Mazars’ UK business
rose 14 per cent to £234 million in 2021,
the twelfth year in a row that it has
grown its top line. Pre-tax profits leapt
47 per cent to £44.3 million.
With the extra fees from Goldman
and AIG, Mazars’ assurance and audit
division was the stand-out performer,
with revenues in that arm climbing
25 per cent to £98.4 million in 2021.
That was despite being told by the
industry regulator, the Financial
Reporting Council, that its audit work
was not up to scratch.
As part of its audit quality inspec-
tions last summer, the FRC ran the rule
over seven of Mazars’ audits. Only four
of them were considered to be up to
standard, which the watchdog called
“unacceptable”.In January the group was fined
£250,000 by the FRC, which found that
Mazars’ audit of an unnamed local
authority in 2019 “fell far short of the
applicable standards and regulations”.
In response to the fine, the firm
accepted that the “quality of [its] work
did not meet the standards expected”.
In its results, Mazars said that “audit
quality is our primary focus”. Phil Veri-
ty, the chief executive, added: “Despite
multiple lockdowns, remote workingand any number of personal and caring
challenges, our teams have provided
outstanding positive support for our
clients in these challenging times.”
After its bumper year in 2021, audit is
now Mazars’ biggest service line in the
UK, overtaking the advisory and
consulting division.
Revenues in that part of the group
rose 8 per cent last year to £87.5 million
amid the resurgence in the mergers
and acquisitions market. Mazars’ tax
arm saw revenues rise 8 per cent to
£48.1 million in 2021.
Mazars, whose headquarters are in
Paris, was founded in 1945 near Rouen
in Normandy by Robert Mazars.
In the UK it employs more than
2,500 people, including 130 partners,
having added more than 1,000 in 2021.The wider group operates in 90 coun-
tries and last year turned over €2.1 bil-
lion — 12.3 per cent more than it man-
aged in 2020.
Mazars said that it had been able to
achieve record revenue while at the
same time “significantly reducing its
environmental impact” with its staff
travelling less, printing out fewer
documents and using less energy in
its offices.
The company has “fully embraced a
hybrid working model” and its workers
are allowed to work from wherever
they think they are most effective.
“The last year has demonstrated
what is possible and, moving towards
hybrid working practices, the firm will
not be returning to the status quo,”
Mazars said.Tom Howard
£234m
Revenue in Mazars’ UK business in
2021, up by 14 per cent
Source: MazarsS
tarbucks will pause
billions of dollars
worth of stock
buybacks, the longtime
former chief executive
Howard Schultz said
yesterday after he
returned this week to
head the global coffeechain for the third time.
Effective immediately,
the suspension will allow
Starbucks to invest more
in employees and stores,
Schultz said in a letter to
workers, customers and
shareholders at a time
when the company facesgrowing unionisation of
its US workforce.
The shares fell by as
much as 5 per cent in
New York but later pared
some of the losses to
close down $3.40, or
3.7 per cent, at $88.09 in
New York last night.Buybacks on
back burner
at Starbucks
EY, the Big Four accountancy firm, has
revealed plans to double the size of its
UK consulting team by 2026 in an
attempt to keep up with the growing
number of clients seeking advice as
they exit the pandemic.
The group has 5,100 consultants on
its books but it wants to take that above
10,000 within four years. It expects that
more than half of the new roles, which
will range from school leavers to part-
ners, will be based outside of London, in
cities including Manchester, Glasgow,
Edinburgh and Birmingham.
Bosses have set aside another
£75 million to fund the expansion drive.
That is on top of the £95 million already
invested in the consulting business
since the pandemic began.
EY traces its roots to a partnership
founded in England in the 19th century.
It now employs 17,500 people in 22 offi-
ces in Britain, who provide consulting,
audit, tax and advisory services. It car-
ries out audits for nearly a quarter of
London’s FTSE 100 but has a presence
in more than 150 countries. Last year
EY’s net fee income rose 7 per cent to
£2.75 billion, from £2.57 billion in 2020.
Its consultants, along with those
from its rivals, have been in high de-
mand in the past couple of years as busi-
nesses have grappled to keep pace with
a rapidly changing world.
“If you’ve got change, then usually
you’ve got people looking for support to
help them through that period. It
makes for good conditions for profes-
sional services [firms],” Hywel Ball,
managing partner of EY UK & Ireland,
said at the end of last year.
The pandemic has up-ended busi-EY aims to double team
of consultants by 2026
ness models and forced management
teams to embed new technologies and
ways of working into their organisa-
tions. At the same time, some are still
trying to work out the lay of the land
after Brexit, while navigating environ-
mental, societal and governance stan-
dards has also grown in importance.
The war in Ukraine is the latest chal-
lenge that businesses face.
In February EY announced that it
was investing £100 million to launch EY
Carbon, its new net-zero consultancy
business that will help clients to draw
up and hit their sustainability targets.
EY and its rivals have been battlingone another to attract and retain work-
ers and Benoit Laclau, managing part-
ner for consulting at EY UK, acknowl-
edged that there was “real competition
in the labour market for top talent”.
There has been salary inflation at
most of the big firms but Laclau said
that EY would be “promoting [its] flexi-
ble and hybrid working” policies to help
to convince those 5,000 new workers
that it wants to hire for the consulting
division.
The company is still experimenting
with its post-pandemic approach to
hybrid working. At the moment, it is
letting staff choose, based on what is
best for them and the business, whether
they work from home, the office or
clients’ sites.Tom HowardBenoit Laclau says
there is “real
competition for
top talent”CHRIS WONG/S3STUDIO/GETTY IMAGES