E&Y joins Big Four billionaires
Ernst & Young set to break the £1bn barrier in revenues this year
Big Four firm Ernst & Young is set to break the £1bn barrier in revenues
this year, chairman Nick Land has predicted.
The landmark result will not affect the ranking of E&Y as the fourth
largest accounting firm, as KPMG, which is third, has grown significantly.
E&Y reported 21% half-year growth, but KPMG earlier released figures
showing a rise in income of more than 20% for 2004-5.
Land, who steps down in June, told Accountancy Age that a boom in
transactions is now at least as important a driver of growth at the Big Four as
regulatory changes. He said that regulation had been a key factor, but that the
situation is changing. Asked which of the two was more important, Land said: ‘A
year ago the answer was regulatory changes. Now I wouldn’t put one in front of
the other.’
Regulatory changes had been widely credited with driving the huge growth in
the Big Four this year.
‘Some of the anti-avoidance stuff in the last two budgets has ironically
enough generated a lot of work, as companies have to look at undoing
structures,’ Land added. Tax grew by 13%, the bulk of the growth coming in
corporate tax advice, he said.
The firm took on 800 new people in the past six months. But Land said he
would be surprised if that recruitment rate continued.
PricewaterhouseCoopers remains the largest accounting firm, with Deloitte
second. PwC recorded 12% growth last year with a total of £1.7bn and Deloitte’s
figures showed 8.8% growth to £1.35bn (although interim results later showed 15%
growth).