PracticeAccounting FirmsSarbox cuts Big Four advisory fees

Sarbox cuts Big Four advisory fees

Advisory fees for the Big Four have fallen by almost 30% since the introduction of the Sarbanes-Oxley act, new research has found.

Bold: Sarbanes-Oxley forces company to re-hire FD

The dramatic decline in non-audit fees was recorded by BDO Stoy Hayward. Their research found that between 2001 and 2002 there was a marked fall in the volume of work referred to the Big Four from UK companies with a dual listing in the US.

These firms, about 150 in total, are the most affected by the introduction of the act.

Sarbanes-Oxley came into force in July 2002 was introduced in the wake of the Enron scandal by the US government.

It was an attempt by the Bush administration to clamp down on Stateside corporate wrong-doing but also impacted on overseas firms with a secondary listing on Wall Street.

PricewaterhouseCoopers saw their fees drop from £328m to £197m – a drop of £131million or 40%.

Deloitte and Touche saw their fees drop from £62million to £48, a 22% drop, while Ernst and Young fell from £62m to £50m (19%).

Only KPMG bucked the trend with non-audit fees jumping from £89million to £99million, a 12% jump.

Gervase MacGregor, the partner who carried out the research, said the decline was significant even in then light of economic conditions and the selling off of non-audit arms by companies such as PwC and KPMG.

‘A drop of 27%, or £147m in consultancy projects is very large and out of proportion to the generally flat economic conditions facing accountants over the past couple of years,’ he said.

During the same period audit fees only increased by three per cent.

Related Articles

LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

Accounting Firms LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

10h Fergus Payne, Lewis Silkin
BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

6d Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

1w Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

1w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

2w Emma Smith, Managing Editor
RSM announces two partner promotions

Accounting Firms RSM announces two partner promotions

3w Emma Smith, Managing Editor