Ernst & Young to add China staff and office

By George Chen

SHANGHAI (Reuters) - Global accounting firm Ernst & Young ERNY.UL said on Tuesday it plans a nearly four-fold jump in its China staff in the next decade, to about 30,000 from 8,000 now, as it courts Chinese clients eager to expand outside the world's fastest growing major economy.

The firm, one of the world's "Big Four" auditing firms, also plans to open two to three new branches annually over the next few years, focusing expansion in western China to support Beijing's "Go West" economic policy, its visiting chief executive, James Turley, said in Shanghai, China's financial hub.

"This is all people business and the biggest risk for us is if we don't get the right kind of people for our company," he said during the Reuters China Century Summit.

"We need to have a firm in China in the next foreseeable future, you know, 10-plus years, and we are not talking about 8,000 or 9,000, we are talking about 25,000, 28,000 or even 30,000 staff in China," he said.

Turley said the firm wants to hire people from universities and industry, adding that many Ernst & Young staff around the world are very interested in learning Chinese and want to work in China.

Meanwhile, China lacks professional accountants even as Beijing is encouraging Chinese companies to go public and improve their corporate governance, Turley said.

As a result, competition for accounting talent among the "Big Four" firms in China has becomes very fierce and many CEOs of foreign companies have complained it is difficult to find enough qualified financial experts when they expand their business in China.

Early this year, about 10 former China-based partners at PricewaterhouseCoopers PWC.UL (PwC) decided to join its rival, Ernst & Young, industry sources told Reuters.

For instance, Albert Ng, a former partner in charge of China business at PwC, has become Ernst & Young's managing partner for China operations.

BEYOND CHINA

London-based Ernst & Young last year became the official auditor for the listing of Industrial and Commercial Bank of China (601398.SS: Quote, Profile, Research, Stock Buzz)(1398.HK: Quote, Profile, Research, Stock Buzz) (ICBC), which marked the world's biggest initial public offering of shares in 2006.

Besides ICBC, China's top bank by assets, many Chinese clients of Ernst & Young are big state-owned enterprises such as China Mobile, the country's biggest mobile operator, which bought control of Paktel Ltd., Pakistan's oldest cellphone carrier early this year.

"China is always the destination for foreign investments, and now we are seeing much more interest in Chinese firms looking abroad," said Turley, who joined the company in 1977 after graduating from university.

"Now, the Chinese companies know they can compete in the global stage," he said, adding that such moves will create many business opportunities for Ernst & Young in the near future.

David Sun, Ernst & Young's chairman for the Fast East, said Chinese mineral companies are expected to have a lot more overseas acquisitions in the next few years.  Continued...