KPMG fails to snatch second place from Deloitte
IFRS and Sarbox fall-off put the breaks on Big Four firm's runaway growth rate
KPMG earnt £1.45bn in 2006, it said today, a 14% growth rate that poured cold
water on suggestions that it was set to overtake Deloitte as the second-largest
UK firm.
The firm also revealed its audit function grew by only 2% as the fall-off in
Sarbox and IFRS compliance appeared to bite.
The figures widened the gap between Deloitte and KPMG to just under £100m,
from £70m last year. Deloitte recorded a similar growth rate but on a higher
base.
The largest fees came from non-audit work, at £776m, were £398m. Non-audit
fees for audit clients was £280m.
Senior partner John Griffith-Jones described the growth as one of ‘slightly
less dramatic pace than in 2005’ in his report.
‘The growth is due to the buyouancy of the London market,’ said
Griffith-Jones. ‘It’s a wonderful place for a financial house to do business in
at the moment. The underlying story in audit is that we have a small amount of
market share. And there’s lots of extra cost associated with keeping up with
regulatory regimes. But some of that is winding down, so that line of revenue is
lower.’
Partners in KPMG UK and KPMG Germany have also voted in favour of the
prpposed merger, the firm said.
Referring to the debate on audit choice, Griffith-Jones said the firm would
like to see the emergence of at least one firm of comparable size. ‘But some of
the radical proposals that have been put forward to promote competition are wide
of the mark,’ he said