The news is revealed in the latest Accountancy Age Top 50 league table and marks the end of a year of contraction in the industry.
But the renewed confidence and aggressive recruitment activity could be threatened by a widespread skills shortage across the profession.
At £6.3bn, total fee income across the Top 50 firms remains almost static compared with 2003, based on revised statistics including the first fee income figures from PricewaterhouseCoopers.
The Big Four witnessed a decline of just over 1%, or £54.5m, in fee income on the previous year to £4,567.6m. Our 2003 Top 50 revealed that revenues across the firms had dropped by 6% on the previous year.
But over the last 12 months, international accounting standards, and an increased focus on corporate governance and internal control among clients has boosted revenues.
Ernst & Young saw an 8% increase in fee income, making it the fastest growing Big Four firm.
Nick Pasricha, E&Y’s managing partner of markets, said: ‘It’s a good market compared to the last few years. The audit market is demanding more services, but there’s an acute shortage of people.’
Pasricha said E&Y was picking up substantial tax and advisory work from rival firms, as clients looked to restrict the non-audit services they bought from their auditors.
But despite strong signs of an upturn, firms do not believe the industry is on track for the double-digit growth witnessed in the heyday of the nineties. At one stage, the then Big Five were each growing at around 20% annually – effectively creating a new Big Five firm each year.
Sukhbinder Heer, chief operating partner at RSM Robson Rhodes, one of this year’s fastest-growing firms, said: ‘We’re underpinning our growth with sustainable, profitable relationships in our chosen markets.’
The firm hopes to treble in size over the next three years. ‘Getting the right people, with the right attitude and giving them the right platform to develop is key. Recruiting will get more difficult, but I believe we have a good proposition,’ Heer said.
Tony Stockdale, national managing partner at Bentley Jennison, the fastest-growing firm in this year’s top 20, said: ‘The compliance side of the business will continue to be under price pressure. But one of our most significant growth areas is internal audit and we’re successfully competing against much bigger practices.’
UK senior partner Phil Verity has been elected for a second term at Mazars
Tallat Mahmood appointed to corporate finance team of Top 20 firm
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes
Top Ten firm RSM has appointed Nick Blundell as its head of corporate tax in Birmingham