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Because audit has no growth. It’s low single digits YOY.
Hey, we try hard
But why would McKinsey want to give up relatively high margin client work (consulting) for low margin client work (audit)? The compliance issues alone would likely make it a deal breaker
Oh. I’m sure they’d also admit publicly lol
Yeah, would make more sense for Mck to buy an implementation business, which they are (small acquisitions and head hunting implementation leaders)
McKinsey would be less profitable moving into a business with far lower margin and that will likely see reduced market strength in the next decade.
They’re far more strategic tax advisory work helping clients reduce their tax rate and avoid and mitigate other taxes.
Not to mention the acquisition of worse (on average) talent
As someone old enough to remember Enron, please don’t mention the firm and “creative accounting solutions” again :)
Enron somehow managed to be the takeaway on that slide but Valeant and Mallinckrodt are there too along with Purdue for other reasons.
Likely the difference between Anderson and Deloitte from that era was better attorneys and more favorable SOW.
People forget about MCI Worldcom and Tyco but Galleon is what to really worry about in that model.
None of it is worth the headache, channel 1 conflict alone would divest enough biz to make it a loss.
^this - it’s such a PITA to have deal with C1A clients
Clients that PwC / we audit