PracticeConsultingConflict of interest fears revived as new figures reveal PwC’s non-audit earnings from audit clients

Conflict of interest fears revived as new figures reveal PwC's non-audit earnings from audit clients

PricewaterhouseCoopers is earning twice as much doing consultancy and other work for its audit clients than for actully carrying out audits on them, the highest proportion of any Big Five firm.

A survey of FTSE 350 companies has revived the conflict of interest debate among the Big Five.

Firms have come under pressure in recent months to separate their audit and consultancy arms amid fears that fees earned from non-audit work could undermine their objectivity in acting as auditor to the same company.

The survey, thought to be the first of its kind, examined the published accounts of the leading companies and compared non-audit to audit costs.

The scale of non-audit fees from audit clients prompted David Haigh, chief executive of Brand Finance, which carried out the survey, to claim there was ‘an inherent risk’ of conflict of interest and to call for a review of guidelines. The survey showed PwC enjoyed £224.4m in non-audit income from clients that paid £122.5m in audit fees.

Deloitee & Touche made £23.7m from audit clients whose audit fees totaled £16.9m while the figures from KPMG were £123.1m and £87.5m. Arthur Andersen earned £24.3m and £19.6m respectively, and Ernst & Young made £61.7m and £47.1m.A spokesman from PwC said: ‘We do not think that by doing non-audit work we automatically impair that independence and objectivity.’

Ian Plaistowe, chairman of the APB, said: ‘If this was an issue we would expect every year dozens of cases where this was an identified, major problem. We don’t.’

AccountancyAge.com special feature: US audit clampdown hits UK

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