Accountants set to lose £445m from audit change

And the figure will double to £880m if the threshold rises to £4.8m.

Small and medium-sized accountancy firms are likely to be the biggest losers, according to the research by online business information provider ICC Information.

It said that the new £1m turnover threshold, introduced last week, will ‘spell doom’ for regional accountancy firms which have many smaller businesses on their books.

But, according to the research, the biggest financial losers at the current £1m level will be PricewaterhouseCoopers with an estimated £11m shortfall – with the Big Five as a whole set to lose £35m.

But a spokesman for ICC, said: ‘While the level of fees at risk to the Big Five is considerable, the loss can be offset by their earning power as large, global enterprises with other strong income streams. However audit fees account for a far larger proportion of smaller firms’ income.

‘To counter this we might witness a greater degree of consolidation in the sector as many smaller firms are unlikely to be able to survive losing a potential 40% of their business.’

ICC’s figures, howvever, differ from those of the Department for Trade and Industry, which suggested that businesses would save around £180m.

The additional rise to £4.8m is being considered by the Company Law Review and could be introduced in 2002 in a bid to further reduce red tape.


Raising audit limit could harm small business

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