E&Y blame red tape for stalled growth

Link: Fresh crisis for E&Y

The Big Four firm will announce its results Friday after experiencing another difficult year, despite a number of cost-cutting initiatives carried out in 2002.

‘Regulatory changes, particularly around auditor independence, also had an impact,’ Nick Land, E&Y’s UK chairman, told Accountancy Age. ‘In terms of the market, it’s been another difficult and challenging year following on from the previous year.’

The firm reduced headcount at both partner and staff level in an attempt to stave off the continuing slump.

‘We took some difficult and pain-ful decisions in the previous year, reduced capacity at partner and staff level,’ Land admitted.

‘For the year we’re talking about, the activities level and capacity levels were pretty much in balance. Revenues grew reasonably well, and we think it will stand up pretty well to our competitors. We had reasonable growth and increased fees by a reasonable percentage, but not like in the heady days of 15-17% growth.’

But Land was confident about the future, and said the impact of regulatory changes would offer an opportunity going forward.

‘It opens up an enormous amount of opportunities and new markets,’ Land said. ‘And it means that we have to be quick on our feet and adapt to this new environment.’

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