BDO Stoy Hayward managing partner Jeremy Newman has warned mid-tier firms that unless they start investing in their business, the gap between the giant firms and themselves will continue to widen.

This year’s Accountancy Age Top 50 survey shows that the average percentage growth of the Big Four is 15%, compared with the 13% combined average of the Top 50.

More strikingly, the Big Four have outstripped their nearest rivals, BDO Stoy Hayward, Grant Thornton, PKF, Baker Tilly and Smith & Williamson. On an average percentage basis these mid-tier firms grew by only 11.28%.

A similar picture emerges when looking at the percentage growth of combined revenues. The combined Big Four revenues grew by 14.4% to £6.3bn, while the combined revenues of the group of mid-tier firms only grew by 12.8% to £1.1bn.

‘Firms outside the Big Four have lost market share because relatively few of them have made the investment necessary to grow market share. We have invested, but many others have not,’ Newman said.

An Ernst & Young spokesman, however, said fears of the growing gap between the Big Four and the rest were overplayed, as the Big Four numbers still reflected the one-off benefits of IFRS and Sarbanes-Oxley.

‘Our figures still reflect the impact of IFRS and Sarbox work. When our results come out later this year those one-offs won’t be present and the gap is unlikely to be as wide as it appears now,’ the spokesman said.