But the figures revealed in the Accountancy Age Top 50 survey show that firms in the UK have remained remarkably resilient and untouched by the controversy that emerged as many were already just over half way through their financial years.
When the full extent of the scandal began to be revealed in the run up to Christmas 2001, the money would have been on companies cutting their consultancy spending with accountancy or professional services firms. But the figures show that is not the case. In fact consultancy revenues have continued to grow. Indeed the survey reveals the average annual rise in consultancy revenue is a strong 11.2%.
The past year appears to have been a bumper one for consultancy. In fact, of the two largest firms that publish results, KPMG witnessed a 27% increase in consultancy revenues to £340m while Deloitte & Touche registered an even larger increase of 30.3% to £205.3m. The improved performance comes despite a downturn in the IT sector and the phenomenal amount of bad press for accountants throughout the first half of this year.
Smaller operators, such as Kingston Smith, which takes the number 19 slot with total fee income of £26.1m, recorded a increase in consultancy fees of 59%.
A spokesman at the firm put the huge improvement in income of £2.8m down to a joint venture with WBS Consulting in Leeds and organic growth.
A figure that stands out though is the 50% drop in consultancy business for the number 45 firm Jacksons. That said, Jackson has gone through a year of upheaval as it restructured the office and reduced its headcount in consulting. And the firm is still performing well. In 2001 the firm had 20 partners with fees per partner of £405,000 and total income of £8.1m.
For 2002 total fees have fallen to £7.5m, but the partner headcount has fallen to 16 with fees per partner rising to £47,000.
Meanwhile, the more traditional service lines, such as audit, accounting and tax, have seen much more modest increases.
Audit/accountancy has grown slightly less than consulting with the average rise being 11.1%. The largest firms have all seen their audit/accounting practices go through double figure growth.
Deloitte & Touche (before the inclusion of the Andersen business, assuming the deal wins regulatory approval) grew by 16% while Ernst & Young came in just behind with a creditable 14%. The winner, in terms of growth, however, was KPMG which recorded a hefty 21.1% increase of audit/accounting with fees of £412.9m.
Again though, with no national or sector breakdown, who knows what is happening at PwC. Among the medium and small firms, the biggest improvement came from Littlejohn Frazer, in the number 34 position, with audit/accounting income rising by 31%, a performance outstripping the percentage growth among the largest firms.
The other traditional service line, tax, has also seen a healthy rise in business.
The average rise on the previous year is 11.1%. All the largest firms saw double figure rises but more modest ones of around 15% for KPMG, Deloitte & Touche and Ernst & Young.
It was the mid-tier that saw exceptional rises. Armstrong Watson, at number 28, notched up a percentage rise of 21.9% while Price Bailey, in the number 38 slot, topped that with a rise of 32%.
Another notable rise in tax income came from Buzzacott, number 29, which improved its tax revenue by 34% to take it to £4.3m.
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