The firm has seen a 15% increase in fees from non-audit clients, a figure that would rise to 25% if the firm's corporate restructuring business is excluded.

Chairman Nick Land attributed this to companies seeking outside help to comply with governance and regulatory measures, including international financial reporting standards and Sarbanes-Oxley.

'Perceptions of audit independence have significantly reduced the non-audit services that companies buy from their audit firm,' he said. 'This shift means that 53% of our fees now come from other firms? audit clients.'

E&Y's overall revenues were up 2% to £828m in the year to 30 June 2004 and the firm has become more profitable, reporting an average profit per partner increase of 6% to £506,000, despite the costs of moving the firm's London business to new offices near Tower Bridge.

Land said that growth had sharpened in the last quarter of the financial year and had continued strongly in the two quarters since. 'We have definitely seen a relatively stronger pick up in the last six months right across the whole of the business,? he said. He added that the firm's recent performance would have meant a revenue rise in the 12 months to September of around 5.5%.

With growth of 16% to £371m, strong demand in the firm?s business assurance division contributed to the ?creditable results?. The firm?s tax business shrunk by 6% to £270m.

This week the firm, which has now filed its expert evidence relating to the ongoing Equitable dispute with the High Court, reported worldwide growth of 3% to US$14.5bn (£7.8bn), though currency fluctuations generated a $1.4bn or 11% rise.

Earlier this year Deloitte reported UK revenues of £1,246m for the 12 months to May 2004, up 4.9% on 2003. In January KPMG reported a slight decline in UK revenues for 2003 to £1,008m. In its last annual report, for the year to June 2003, PricewaterhouseCoopers reported a 7% fall in turnover to £1.5bn.