PwC says regulation bonanza will not dry up

Business growth from corporate regulation will not dry up and will become a
steady stream of income, PricewaterhouseCoopers predicted this week as it
announced an 18% increase in its assurance revenues.

Work on IFRS and Sarbanes-Oxley projects has added £100m to PwC’s turnover,
which grew by £200m to £1.78bn. PwC chairman Kieran Poynter conceded half of the
growth in assurance was a ‘one-off’, but the £100m windfall would slow to become
a stable revenue source over the coming years.

‘We expect to see roughly half of the £100m recurring because of the new
level of activity. Sarbox is an annual cycle that companies are going to have to
go through and there will be recurring work from IFRS implementation and the
introduction of revised international financial reporting standards,’ Poynter
said. ‘The spurt from IFRS and Sarbox will dry up, but we see the underlying
half just continuing.’

Despite the sustainability of increased assurance income, Poynter indicated
that PwC, the UK’s largest accounting firm, was still looking to expand other
areas of its business to maintain growth.

The result highlighted a strong focus on consultancy for PwC. The Big Four
firm increased performance consulting revenue by 28% and recruited eight
partners from a consulting background.

‘We do not anticipate that performance consulting will grow to the same scale
as our other businesses, but we aim to grow it into a good-sized business over
the next two years,’ Poynter said.

He becomes the firm’s highest earner and the second-highest paid accountant
in the UK with a pay package of £2.1m.