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9am Lowdown: Scandals fail to dent Big Four

24th Dec 2014
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Despite a year of turmoil for the Big Four accountancy firms, all four have reported increased revenues for 2014. Here's our Christmas Eve 9am Lowdown.

Scandals fail to dent Big Four

Large accountancy firms continued to expand this year despite accusations of collusion in tax avoidance and reporting mishaps.

According to the FT in 2014 they encroached on the territory of consultants, law firms and banks.

Professional services companies took centre stage in two of this year’s biggest stories: corporate tax scrutiny and the Tesco accounting scandal.

However none of this has hurt their ability to make money.

KPMG’s UK practice increased revenues by 5% to £1.91bn - the same rate of growth of PwC. EY experienced the fastest growth with its UK arm boosting revenues 8.6% per cent to £1.87bn in the same period. Deloitte experienced its slowest growth in four years, with UK revenue increasing 1.4% to £2.55bn.

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Economic recovery slower than thought

The UK economy has grown slower in the past year than previously thought.

According to figures seen by the Wall Street Journal the economy has grown less since the recession struck in 2008 than previously thought.

The ONS data shows the economy expanded 0.7% in the third quarter compared with the second., but growth in the first half of 2014 was nudged down, dragging the year-over-year growth rate lower to 2.6% from 3% previously.

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If you're interested in doing some Christmas reading, check out Wolters Kluwer's audit and accounting set 2014-15.

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Small firms urged to make severe weather plan

Around 60% of small firms do not have plans in place for extreme weather.

Despite this two thirds have been affected by snow, drought or floods in the last three years.

The Federation of Small Businesses, which commissioned some new research, said firms need to get better prepared.

According to the BBC the survey also found 29% of small firms did not have insurance for loss of income or damage caused by flooding.

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Scottish police auditor failed to keep good accounts

Caroline Gardner, the Auditor General for Scotland, has slammed the quality of record keeping at the Scottish Police Authority (SPA) in a special report sent to the Scottish Parliament.

Gardener criticised the unqualified 2013/14 accounts and drew attention to the “poor quality” of several aspects of the SPA's accounting records, access to information and explanations.

According to the Herald Scotland the SPA was set up to oversee the governance and budgeting of Police Scotland when the country's eight regional police forces were merged into one in 2013 to save £1.1bn by 2026.

Replies (3)

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By redboam
24th Dec 2014 14:03

PWC

The investigations into the Tesco scandal are likely to impact on PWC. Not only were they the auditors who we are led to believe were until recently comprehensively misled by the company's financial officers but one of Tesco's non-executive directors; Mark Armour and the chairman of the company's own audit committee; Ken Hanna were themselves both ex PWC. Frankly speaking the whole affair stinks.

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By abaco
29th Dec 2014 13:43

PWC

This is reminiscent of the banks, whereby annual fees in the tens of millions were being paid to the auditors who were also acting as advisors, while the accounts were signed of year after years as "true and fair" when the both profits and balance sheet values were predicated on the equivalent of trading smoke among themselves.

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By moneymanager
29th Dec 2014 08:09

Frankly speaking the whole affair stinks

It isn't the first time and won't be the last that directors and their auditing/consulting firm collude or are at least too `cozy '.  On the admittedly limited knowledge Have it appears to affect all operational areas, how about lifting the stone on the cesspit otherwise known as insolvency.  Having read various reports including the ICAEW `whitewash' and the official communications by the subsequent insolvency practitioner of Fairpack  I would say that the pre and post collapse conduct of many concerned could form the the script of a pantomime or perhaps a farce.

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