Top 60 UK Accountants Break the £11 Billion Earnings Barrier in 2012, According to Latest Industry Survey
Fee income and staff numbers grow in the sector in spite of a troubled year for accountancy firms’ clients
The findings are revealed in the latest annual top 60 survey by Accountancy magazine, published by CCH, part of global information provider Wolters Kluwer.
An increase in the fee income of the largest accountancy firms over the last two years followed the dark days of 2010 when their combined annual income fell for the first time since the recession of the 1990s.
“Revenue growth, rising profitability and the prospect of increased competition figure large in the headlines, along with accountancy mergers, collapses and redundancies,” says Accountancy’s editor Sara White. “But while there is a constant fear of job losses in the sector, the top 60 firms have grown their number of staff as well as their fees: they employ 38,000 people and over 3,800 partners among them.”
The number of trainees is also up. Now more than 13,000 individuals are being trained by the firms.
The four largest firms – PwC, Deloitte, KPMG and Ernst & Young – have the lion’s share of fee income. Between them they earned £8.35 billion during 2012, an increase of 9.6% on the previous year and accounting for 76% of annual earnings across the top 60 firms. By contrast, the largest mid-tier firms – such as Grand Thornton, BDO and Baker Tilley – barely saw increases.
Steve Varley, UK managing partner at Ernst & Young, who is quoted in theAccountancy, has seen the firm’s fee income grow more than 11% over the past year. “This is the highest rate for six years,” he says.
Ranked number four in the Accountancy survey of income, Varley sees one area of growth coming from the need for E&Y’s clients to do business with emerging markets: “In the UK we are making sure that our clients don’t view us as a domestic firm.”
Accountancy editor, Sara White, says: “The elephant in the room that has cast a shadow over the sector during 2012, especially at the top end, has been the Competition Commission’s review of the audit market., together with the legislative battle taking place in Brussels. This issue is set to rumble on in 2013 and the firms, outwardly at least, are starting to sound positive about the outcome of the debate.”