The “Big Four” accountants in Britain: When bean counting pays off

Posted: December 18, 2013 in economy
Tags: , ,

LAST December, the outlook seemed grim for the “Big Four” accountancy firms in Britain. Three out of the four, Ernst & Young, PwC and KPMG, announced they had cut pay for their British equity partners. KPMG was particularly badly hit—announcing job cuts at all pay levels. Neither had Deloitte, the fourth, completely escaped the slowdown in the audit and advisory business. The previous year it was forced to cut partner pay as well.  

But this year, business appears to have bounced back slightly. The four behemoths—which offer services to companies ranging from auditing to consultancy—increased their combined British revenues by 4.2% to just under £9 billion ($14 billion). Profits are also healthy. The job cuts and efficiency savings KPMG announced last year seem appear to have worked particularly well: profits in Britain rose 27% even though revenues only inched up by less than 1%.It seems that much of the slowdown in their British businesses was linked to Europe’s wider economic difficulties. A significant chunk of the four firms’ British audit and advisory fees came from FTSE100 and FTSE250 companies, most of which are multinationals with exposure to European markets. In 2011 all but one company in the FTSE100 was audited by one of the big four firms, as well as 239 out of those in the FTSE250, according to Hemscott, a research outfit.Accountants do best …

via Economic Crisis http://www.economist.com/blogs/schumpeter/2013/12/big-four-accountants-britain?fsrc=rss

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