Industry leaves dark days of Enron behind

The UK profession appears to be emerging from the black cloud of US
accounting scandals, with average revenues at last seeing some growth.

Following drops in fee income since the accounting abuses at Enron and
WorldCom, and the collapse of Andersen, this year’s Top 50 league table shows
that turnover is rising.

From static revenues of £6.3bn in 2004, the combined income of the Top 50
this year jumped a little over 6% to £6.7bn.

And even as the Big Four struggle with recruitment, they will be relieved
that the reputational damage caused by the Andersen affair has now dissipated
enough to turn round last year’s 1% drop in income to a modest 5% growth, with
revenues passing £4.8bn.

Deloitte was the most improved Big Four performer of the year, with its
income rising 8% to £1.35bn, while BDO Stoy Hayward showed the largest increase
in the Top 10, up 23.7% to £224m.

The biggest growth in the Top 50 came from AIM-listed Vantis, following its
part-acquisition of rival Numerica. Estimated revenue of £60m, made up of £35m
in fees from the original company and £25m revenues from Numerica, represents a
150% rise on last year’s £24m.

But double-digit growth was common right across the Top 50, with customers
increasingly open to looking outside the largest firms for their accounting
services.

‘Perhaps on the back of Enron, we are now seeing people look away from the
bigger firms,’ said Ken McManus, assistant director of member services at ICAS.
‘And we are seeing much stronger growth in the small-to-medium-sized practices,
where they also have the skills and experience to service the market.’