You know, for a little while it looked like those hippies’ dreams of one global village had come true. Some of us grew up in the ‘we are the world’ era and really believed Lucky Dube when he said ‘we gotta stand together as one.’
It was a pipe dream. Families can’t even stand together as one, what more nations, let alone the whole world.
We are now staring a possible World War 3 in the face and the cold wars of this millennium are heating up. That’s more like the family drama we are used to.
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Here in Zimbabwe, we are feeling the effects of the Russia-Ukraine conflict. That’s what interdependence brings to the table, shocks in one part of the world causing tsunamis elsewhere. Let’s hope the US doesn’t sneeze too hard too because that would just send everything to the dogs.
The US and China have their own ‘will-they-won’t-they’ thing going on. It’s been years of this passive-aggressive behaviour and tensions are rising with every trade tariff raised.
What China has learnt from all this is that they just have to be independent and self-sufficient.
China had bought into the ‘global village’ dream as well and discovered in the end that there are some world prefects that exert too much influence on global village proceedings. Cross those prefects and you suffer the consequences (the demonisation of Huawei being a good example.)
The latest on China’s part concerns freeing themselves from the shackles of the global financial system. How is China trying to do this?
The big four
China is telling its companies to stop using the Big 4 accounting/auditing firms – PwC, KPMG, Deloitte and EY. All four are Western companies, three of them headquartered in London and KPMG in Amsterdam.
Here I have to tell you that as a kid someone told me that KPMG was a Zimbabwean company, founded by Kuredza, Panganai, Mashakada and Guveya. I believed that for years. Life before mobile internet was accessible was tough, so don’t judge me. Anyways…
China has grand ambitions to be the world superpower. However, they realise it will be hard to achieve that when Western companies still exert great influence on their economy. So, to limit Western influence on their economy, China is moving away from the big four.
The government is citing data security concerns and so the Ministry of Finance has been advising state-owned enterprises to let contracts with the big four expire. This is rich coming from China but warranted.
But why China, why were you using these private auditing firms to audit your state-owned enterprises’ accounts? Not even your little brother Zimbabwe does that.
The big four have their tentacles in every economy on the planet. Almost every big company in almost every country gets their books looked at by one of the big four. Even here in Zimbabwe, just go through the accounts of whatever stock exchange-listed company you want and you will find that their auditors are numbered among the four.
China is playing this game right. They also understand that it’s not enough to rid yourself of foreign influence, you also have to influence others. This is where the likes of Zimbabwe come in.
My beloved Zimbabwe
Where China is moving away from Western influence on their financial systems, here in Zimbabwe we will be sticking with the West on this one. Look East policy be damned. To be fair to us though, we were not stupid enough to let the likes of KPMG audit our state firms. But maybe we should have.
Anyway, the West retains its influence on our systems but the East found a way in as well. China has been on a bender, funding infrastructure project after government building across Africa and Asia.
In Zimbabwe, the Chinese have constructed so much stuff and been given access to that sensitive infrastructure, they could just crush us without breaking a sweat.
That means we have both the West and the East pulling strings on this mineral-rich little country of ours. At the moment the Chinese look to be leading in the influence charts but either way, we are a pawn on this chessboard.
Should we ask Kuredza, Panganai, Mashakada and Guveya to found an auditing firm like China is doing? Should we be chasing China away like the West is doing? I don’t know.
All I know is that there were allegations that China was bugging the buildings they were donating to governments, including bugging the Africa Union headquarters they so graciously built. Now, we have the Chinese with unfettered access to our new parliament building. I just don’t see how it’s not bugged.
Before you say Zimbabwe is not that important for them to bother, ask yourself why they even bothered building the damn thing in the first place. When I think about the lithium resources we are sitting on, I don’t see how China would not want to know what our politicians say in the privacy of their offices.
Can anything be done about this?
It’s best not to ponder on these things, I think. It is what it is and let’s accept our pawn status and live our lives as best we can.
What do you think about all this? Is this separatist thinking good for the global village? Could a kingless global village ever exist? Should Zimbabwe be this vulnerable to foreign influence? Of course not.
Can we do anything about it though? Should we sweep the new parliament building after the Chinese are done constructing it? Does it even matter if they hear the nonsense that spews out of the mouths of most of our politicians? I don’t know.
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24 thoughts on “China dropping big four accounting firms, should Zimbabwe do the same?”
I wish there was a like button on your blogs. Some of them are just sooooo good
Thank you. I hope we continue delivering.
Is it not for transparency in international trade that the big four are engaged all over the world? Companies feel safer when dealing with international companies who use accounting systems and standards that are known worldwide. By doing away with the four, they know they will create economic pawns, just as is happening with populations. With no common identity, no conscience and nothing binding them, they have managed to have pawns all over. They have even managed to capture leaders of nations whose populations are powerlessly against the relationships, and they are thriving by dividing the leaders and the led. Those being led prefer their leaders having friends who can rebuke or correct them while the leaders prefer those who look aside when they short change those they are leading. That scenario would be difficult if not impossible if there was a common belief between the two interacting nations, such common belief as that based on a common religion, or the Bible, and, common accounting systems and standards of the big four audit firms.
I don’t totally agree on this one. We have International Accounting and Auditing Standards and International Financial Reporting Standards. There is little wiggle room on how to account for stuff. If A Zim-based company and one in Khazakstan are accounting for property using IAS 16 you can be sure the two figures you see on both sets of accounts are comparable.
The auditors are only there to check whether the accounts follow Standard guidelines and that the controls in place allow for the captured data to be accurate. So, the auditors can be anyone really.
Of course, the problem is that if you don’t know Ahmed, Akbad and Samir auditors, you cannot trust that they checked properly. That’s the part I agree with. However, we have seen so many accounting scandals where the big 4 were the auditors, so there is no guarantee either way.
That said, I don’t think we should be in reverence of the big 4.
To be honest I think the west doesn’t like want China is doing in Africa whether it’s good or bad and the west knows they are slowly losing the war of influence and international trade…the only war they can win is the propaganda war demonizing other nations with misinformation coz they know the majority of the world will just swallow their BS.
So true. China has gained so much power and influence, the West is actively trying to destroy them. Of course this doesn’t mean China is any better than the West for us. So, the West tries to point out the exploitation of Africa by China right now. As if they are not trying to do the same themselves.
The world needs to be aware of economic war between China and the us which is happening right now.The united states is aware that China is surpassing them in so many aspects and has started to trade with many countries using their own currency. The Chinese are opening up their stock markets , bond markets and capital markets to the world and the Yuan is gradually gaining the same status as the us dollar and there is no reason why they can be seen to keep relying on their competitors for such an important services as accounting.
It really is baffling that the Chinese have had Western auditors poring over their state firms’ accounts this long. You don’t have to like China to see that it’s a necessary move this.
The world is going to have parallel systems from now on I think. It won’t be the US-backed system only with China now this powerful.
(🤨 double checks tab carefully this time) Ahem… While China pulls away from Western firms (across industries including finance) they are still sending out their elite youth to study in ivy league institutions and their equivalents all over the western world so that they eventually take up senior roles in those very firms. Just an observation, make of it what you will.
Or you could look at it like the West has some influence on impressionable Chinese youths. Some of them take Western ideals back to China. Having tasted a freer capitalist world, some will be jaded.
I guess in the end it’s both.
We need a ‘100% local’ mentality. All contracts must go to black people only
I don’t know about that. I personally don’t care if someone is black, just let them be competent.
EY is headquartered in the US not Europe,and these firms do also do work for state entities i.e forensic audits internal control reviews,IT systems audits and installation the list is endless
*do work for Zim state entities
Thanks for the detail about the big 4 doing forensic audits for state entities. So, we are in the same position that China is trying to flee.
But EY is headquartered in London, https://www.ey.com/en_gl/locations. Also check Wikipedia.
EY is headquartered in the US not Europe,and these firms also do work for Zim state entities i.e forensic audits internal control reviews,IT systems audits and installation the list is endless
You are quite right, we need our government to do the same, to reduce the influence of these westeners on our economy. For as long as they are equiped with information of our economy, it will be easy for them to derail our economy with their with weaponised sanctions.
Exactly. It’s actually crazy that we’ve allowed them this kind of access for this long.
eh this a wundaful eh ?
Not a big 4 fan huh?
The problem when comparing with china is we only pick what we want, and leave the rest,why don’t you start, by enlightening us that corruption is not tolerated and sometimes you can be sentenced to death for it and its development is not centralised like here, in Africa its all over china. Public officials know if you steal a dime jail is waiting for you so in the end the can do without the big four because they are disciplined enough, just think of the looting if we self audit, where have you seen the audit report of just one of our parastatals
You’re right there. That’s the risk we run. Corruption is tolerated in this country and if there’s no third party looking at our books, we just cannot trust that we are getting an accurate picture of what’s on the ground. However, even now with the big 4 doing forensic audits of these state firms as someone pointed out, it’s still happening. So, if we’re still gonna get corruption, we might as well get it without the West knowing what we are up to.
China is making proper plays and the west knows it is in decline. The big four are a cartel and move like one. I remember watching this KPMG exec eating worms on SA news after the Steinhoff scandal. Pure gangsters these guys. They rubber stamp corruption of the highest order. Robbing hardworking people in the process. China is now looking at the bigger picture and realizing where true power in the west lies. Politics is just a smokescreen for capital, even soft capital which the big four has hoarded in the name of efficiency. Something needed to change. Next should be those consulting firms McKinsey and Co.
Big 4 firms presnce in Zimbabwe is being under rated. Even if they leave, and even if sanctions are lifted, NO western firm, which by the way hve the best investment terms and effects on economy over the Chinese, will engage a business based on results audited by local firms, these firms lack depth and Zimbabwe is corrupt by nature. China is developed, and perfectly capable to function without depending on the west. Zimbabwe depends on everyone, the west, south, north etc. i would think twice before turning a blind eye to the big 4 firms in Zimbabwe.