Testing times ahead for big firms
One assumes that, as the Big Five firms have been drawing up plans to spin off their consultancy arms, they have been developing some kind of business plan for their surviving service lines.
After all, the growth of their consultancy businesses has been one of the major drivers of the strong revenue growth they have enjoyed over the last few years.
Another important driver of increasing fee income was corporate finance – and all the Big Five talked excitedly about the opportunities advising on e-business had to offer.
But the corporate finance market has hit dry times as recessionary jitters in the US make their impact felt across the world. The head of new issues at KPMG, for example, said last week that the IPO market was dead, and that there is no evidence of a pick-up.
And e-business advice is not turning out to be the golden egg it was hoped to be.
All businesses face challenging times, and the Big Five accountancy firms are no exception.
How will these providers of business advice survive the current dip in business performance?
They will now get a chance to test the soundness of business plans they have no doubt put in place for transforming themselves.
Let’s hope they’re up to the task.