@Risk

While concerns about global economic uncertainty continue to be top of mind for business leaders, other significant issues –such as fraud and ethics, mergers and acquisitions, large programs, new product introductions and business continuity –are emerging to further complicate business strategies and performance.

In fact, according to the new 2012 PwC State of the Internal Audit Profession study, businesses are asking internal audit to play an increased role in helping companies navigate the rapidly changing risk landscape. To illustrate my point, here are a few key findings from the report: (more…)

The results are clear: Private companies in the US are focused on growth.

PwC’s latest Private Company Trendsetter Barometer found that more than three-fourths (78 percent) of the 250 CEOs polled expect positive growth over the next 12 months. About four out of ten (43 percent) anticipate single-digit growth, and more than one-third (35 percent) are projecting double-digit growth.

Overall, these results indicate the rate of expected growth for Trendsetter companies has risen 18 percent.

Hiring projections for the next 12 months are on the upswing, too.

More than half (54 percent) of the CEOs responding said they intend to add to their workforce over the next  year –that’s up from 48 percent the prior quarter. Just 3 percent believe they’ll reduce headcount, with an overall 2.0 percent increase projected for private companies’ composite workforce.

PwC looked specifically at export revenue and found that internationally active Trendsetter companies forecast a 9.6 percent revenue growth rate over the next year. (more…)

Pursuing deals in growth markets can be tremendously beneficial.  But, doing business in growth markets is inherently more risky, too.

What can your company do to take advantage of the benefits (low cost manufacturing, access to natural resources, market access for basic global products, buyers with access to core operations, etc.), while mitigating potential pitfalls?

For starters, you may want to read PwC’s new study, Getting on the Right Side of the Delta: A Deal-maker’s Guide to Growth Economies. After analyzing 200 deals (both publicly announced and private ones for which PwC was an advisor) and interviewing 20 leading dealmakers around the world, PwC found that:

• The majority of deal risks typically relate to one or more of three key elements: the asset itself, the seller, or the government.
• The most common barrier to deal completion is an inability to get comfortable with valuations. 40 percent of failed deals in PwC’s data set fell victim to valuation concerns.
• The most common problems that emerge after a deal closes concern partnering, causing 30 percent of problems post-deal.  Beyond partnering, the same issues that prevent deals from closing also frequently emerge post-deal (direct government interference, problems with financial information and non-compliant business practices).

Fortunately, PwC’s report also includes five key recommendations for dealmakers when pursuing deals in growth markets. PwC advises dealmakers to: (more…)

The global automotive industry is poised for continued growth in 2012, provided the European Union gets a handle on the debt crisis there.

In an announcement last week, PwC’s automotive analyst group, Autofacts, said that it expects 2012 global light vehicle assembly will exceed 79 million units, an increase of 6.8 percent from 2011’s total.

According to Autofacts, there are many factors contributing to the positive outlook. For instance:

• Local demand in the BRIC marketplace is on the rise. Monetary tightening and other policy shifts in Brazil, India and China caused slower growth in 2011. But, as PwC points out, inflationary fears in these markets are subsiding –prompting correspondingly looser monetary policy –and these markets could be poised for substantial growth once again. Russia is positioned for another year of strong local demand. Autofacts forecasts BRIC growth is likely to reach double digits (12 percent) in 2012 following only five percent growth in 2011. (more…)

New research from PwC reveals some disturbing details which suggest that most companies aren’t necessarily providing investors with a complete view of the strategic opportunities and threats to the business.

Even though there’s considerable uncertainty in global markets these days, PwC’s new study showed that less than half (45 percent) of the 350 largest listed UK companies clearly explain the potential impact of the risks they have identified or how they intend to buffer their effects.

What’s more:

• Only 16 percent of the FTSE 350 clearly based their reporting on their strategy throughout their accounts,
• Just 35 percent clearly align their key performance indicators with strategic priorities and
• Two-thirds are failing to clearly define their business models in their annual reports.

Although these statistics may seem concerning, the study also uncovered a bright side: In many ways, reporting has improved from last year. For instance, back then, a mere 18 percent of the companies studied were clear about the impact of their risks.

In other positive developments: (more…)