Top six UK accounting firms met virtually in a meeting organised by the ICAEW to discuss the potential hit their reputations would take if they utilise government assistance
In a virtual meeting on April 3, the Big Four, alongside competitors BDO and Grant Thornton, met to discuss the reputational risks and appropriateness of accepting coronavirus-driven government assistance, according to reports.
The meeting was organised by the ICAEW and attended by a lawyer appointed by the membership body, according to the Financial Times.
Leadership from the accountancy firms debated whether to utilise the Coronavirus Job Retention Scheme, while two of the Big Four firms confirmed having applied for the Covid Corporate Financing Facility, according to two FT sources.
This meeting happened just days before Grant Thornton reported its audit profits had fallen by 90 percent, from £13.5m to £1m. In March, the firm had also asked 4,500 employees to reduce their hours or pursue a sabbatical on a volunteer basis to mitigate the financial effects of coronavirus, per the Financial Times.
“We can confirm that we have not furloughed any of our people,” Grant Thornton’s spokesperson said via email, adding that they will continue to monitor the situation.
A spokesperson for BDO said that the firm’s management of the situation would be two-fold, managing both the wellbeing of staff and the company, noting the situation as “complex.”
“Any decisions, including for example a reduction to partner draw, will be made based on business performance,” the spokesperson said via email. “However, we came into this crisis in good shape with a strong balance sheet so we will take the time to assess the situation.”
EY has issued an emailed statement, saying that they are “carefully managing the needs of our business” alongside the safety and wellbeing of staff, clients and community.
Additionally, a PwC spokesperson said the company has no plans to furlough staff, citing chairman Kevin Ellis’ statement to staff from last week: “I want to reassure you that we will use the power of our partnership to do all we can to protect your jobs and salary security, which means asking the partners to accept the financial impact of this.”
PwC has already taken measures to cut the profits of 900 partners by up to 20 percent, starting in April, and has frozen bonuses, pay rises and promotions for the time being.
Deloitte and KPMG did not respond to requests for comment, while the ICAEW said they will not comment on private conversations.
