PracticeAccounting FirmsBill padding row reaches accountants

Bill padding row reaches accountants

The controversy surrounding bill padding threatened to reach the Big Four this week after the country's biggest accountancy firm admitted it set tough 'utilisation targets' for client facing staff.

Link: Fee padding is rampant, say FDs

The news comes after firms were warned to be wary of bill padding following the publication of a memo from lawyers at City law firm Clifford Chance complaining of ‘dehumanising conditions’ that ‘promote padding of hours’ by staff.

Last week, an Accountancy Age survey of UK FDs revealed 80% believed bills from accountants and auditors had been padded. The admission by PricewaterhouseCoopers that staff in the UK have to meet demanding utilisation targets will heighten concern among many observers that pressure on staff could lead to padding.

A source at PwC told Accountancy Age that within the firm’s UK global risk management services group, utilisation targets (time spent on client work) for client-facing staff ranged from 70% of time spent working on client affairs for a junior executive to 55% for a senior manager.

Some staff inside the firm are clearly concerned about the pressures created by dealing with the targets – understood to be analysed on a fortnightly basis and a contributory factor in the calculation of bonuses.

It is also believed the targets played a role in a recent round of redundancies within the risk management group.

A PwC spokesman said: ‘PwC does manage its business in part by using hourly summaries of its people in work, but although we monitor utilisation rates, we do not seek to impose across the board hourly targets.’

The spokesman did admit that targets could be set within divisions and that these may be used as a measure of the employee’s performance. But he denied the company has ever engaged in bill padding and said this issue and utilisation rates were not connected.

Among the rest of the Big Four, KPMG denied it set employees utilisation targets. Ernst & Young and Deloitte & Touche were unavailable for comment.

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