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Every one's a winner! By Nigel Harris

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29th Jul 2007
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Driving into Gatwick airport the other day I couldn’t help seeing the huge “KPMG Auditor of the Year” banners across the road. “Says who?”, I wondered, “have they won some sort of award?” Or does it mean that they audit the year itself? Maybe they check that we’re not short changed and that the year does indeed have 365 days of 24 hours each. But if so, to whom do they report? Who are the management and stakeholders of “the year”? The mind boggles.

Eager to find out more I went to KPMG’s website and discovered that in 2005, 2006 and 2007 KMPG were voted the UK’s top Big Four audit firm in the “Real FD/CBI Excellence Awards survey” (never heard of it? Me neither). On a more objective note though, statistically the firm does audit more listed companies than any other firm according to Hemscott’s quarterly auditor rankings, although that does seem to me to be an indicator of quantity rather than quality. Does this really entitle them to advertise that they are “Auditor of the Year”, without qualification or explanation? It made me I wonder what the other big firms’ websites had to say about themselves, and I was somewhat astounded at the results.

Ernst and Young claim that their “share of the UK’s audit and assurance marketplace grew faster and further than most other comparable firms in 2004/05. A record-breaking 26.5 % increase in net revenue. This is consistent with our presence globally where our revenue reached £11.13 billion, making us one of the largest and most successful assurance businesses in the world. “ However, they then rather confusingly show a world map under the banner “Competitive strength from one of the world’s largest/fastest growing assurance businesses” which is decorated with big labels proclaiming EY as “No 1” in the UK as well as the USA, Chile, France, Italy, Russia, India, Malaysia and Singapore (and No 2 in Australia and China). No. 1 what is not expanded on!

Meanwhile, PWC claim that “as the leading audit and assurance firm, PwC helps improve corporate reporting and provides assurance that systems are operating effectively, within a well-controlled environment. We audit almost half the FTSE100 and literally thousands of other organizations…We are leaders in the development of non-financial reporting.”

So there you have it, in fact three of the Big Four are all Number One, which just leaves Deloitte trailing in second place out of four, which I suppose isn’t a bad result. Their 2006 annual report admits that “in audit our market share in the FTSE100 and FTSE250 continues to grow, and at 23% is now second largest in the UK.” I’m surprised their PR people couldn’t find something in which their audit department is ranked number one, but at least in these days of extreme political correctness no-one comes last!

In case you were wondering, naturally Grant Thornton boasts “the highest number of listed audit clients outside of the Big 4, leadership of the AIM audit market and the highest recognition among audit committee chairs outside the Big 4 according to the Oxera Report.”

* * *
Web links:

  • KPMG
  • Ernst & Young
  • PWC
  • Deloitte
  • Grant Thornton
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    Replies (2)

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    Dennis Howlett
    By dahowlett
    29th Jul 2007 23:48

    PR
    Nigel - you're clearly immune from the Mendelsonesque PR tactics applied by the Big 3/4. That KPMG pic is on Liverpool Street Station as well - I have a pic of it on my site.

    Pity they don't put as much energy into sorting out their antiquated audit techniques that seem to give rise to the most fundamental of errors that any Year 1 student should easily find.

    Thanks (0)
    avatar
    By carnmores
    03rd Aug 2007 16:46

    is there a difference between
    meddlesome and mandelsome

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