Exclusive: profession slays Enron dragon as Top 50 post record revenues
Accountancy Age’s Top 50, published today, reveals that the profession’s biggest firms drew £7.64bn in revenue, exceeding the 2002 figure of £7.4bn for the first time
Revenues at the top 50 firms have finally exceeded their post-Enron peak,
ironically in part as a result of the regulatory changes brought in following
the scandal that did so much to damage the profession.
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The firms also posted double digit growth of 13.1%.No one could have
predicted such impressive rises for accountancy four years ago in the wake of
the Enron collapse. But now confidence is booming.
Rodger Hughes, managing partner of clients and markets at
PricewaterhouseCoopers, said: ‘I’ve been in this business for 35 years and that
kind of growth is virtually unheard of.’
Just two years ago, the industry was almost in recession with the Big Four
witnessing a drop of 1%. But in the past 12 months, the Big Four have raked in a
combined fee income of £5.5bn, a jump of £700m on last year’s revenues.
Advisory work from Sarbanes-Oxley, introduced to tighten corporate reporting
post-Enron, and global accounting rules have driven the boom across all fee
streams.
Nick Land, chairman of Ernst & Young, said: ‘It’s one of the periods
where most parts of the business are doing well. This growth is a demonstration
of how quickly things can change in the global market place.’
John Griffith-Jones, CEO of KPMG, which is growing at 20%, also put the
growth at his firm down to the two ‘fairy godmothers’ of Sarbanes-Oxley and
IFRS.
Partners agree, however, that the pace of growth will slow to follow the
global economy. Also much of the work from IFRS and Sarbanes-Oxley has been
transitional and that is expected to peter out as companies get used to the
changes and turn less often to their advisers.
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MGI Wenham Major is this year’s fastest growing firm. It enters the Top 50
for the first time with a growth rate of 248%. A limited company, Wenham Major
is the product of an MBO in November 2005 when chairman John Joyce, pictured
above, bought out the then partners. Revenues now stand at £9.9m.