BusinessCompany NewsBig Four branded to dominate audit

Big Four branded to dominate audit

The gap between the brand value of the Big Four and other accounting firms is increasing rapidly, posing a serious threat to future competition in the UK audit market

Brand specialists Intangible Business conducted an analysis of the brand
value of 12 leading accounting firms and found that the mid-tier was struggling
to compete with the brand presence of the giant firms.

The research calculated the brand values using forecast revenue streams and
the implicit royalties that the firms were relieved from paying because they
owned the brands.

The analysis found that overthe last year the Big Four hadgrown their brand
values by 27%, while mid-tier firms had only shown brand growth of 12%, raising
concerns that smaller firms are losing ground in the battle to break the Big
Four’s dominance of the audit market.

BDO Stoy Hayward was the only mid-tier firm that appeared to be matching the
brand growth of the Big Four, with a 23% increase in value. The firm’s brand,
however, was still only a quarter of the value of closest Big Four firm Ernst
& Young.

‘The strength of a brand is based on perceptions, and the perception appears
to be growing that the Big Four are the only firms with the reputation and
competence to conduct major audits,’ said Thayne Forbes, a director at
Intangible Business.

Forbes also predicted that, based on the brand analysis, Deloitte was likely
to catch up with PricewaterhouseCoopers as the largest UK firm on a revenue
basis. ‘Brand values are calculated using a projection of future revenues.
Deloitte is likely to match PwC,’ Forbes said.

See the full analysis at
www.intangiblebusiness.com

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