| PricewaterhouseCoopers pips KPMG to the post as Ireland’s largest accountancy firm |
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| PricewaterhouseCoopers has retained its position as Ireland’s largest accountancy firm, but the gap with KPMG has closed dramatically with KPMG being given a major income boost from the acquisition during the year of Andersen’s Irish accountancy practice, according to the 2003 Annual FINANCE Accountancy Survey. |
Salary increases for professional staff, which varied firm-to-firm from 3 per cent to 10 per cent last year, are likely to average 5 per cent over the coming year, according to the survey, a few percentage points lower than average increases in the past year, the survey reveals.
Boosted by the Andersen business, KPMG grew its fee income last year more than 26 per cent to €135 million, while PwC’s fee income – with no contribution from the demerged consulting arm – grew less than 5 per cent to €136 million. This means that PwC’s share of an expanding accountancy market has shrunk from 27.4 per cent to 23.7 per cent, fractionally ahead of KMPG’s 23.5 per cent.
Overall, the 2003 Finance survey shows the Irish accountancy industry in healthy financial shape with fee income among the 17 largest firms up more than 16 per cent to €574 million. And while PwC and KMPG have retained the two top positions, Ernst & Young is clearly the firm showing the strongest growth in revenues with a 26 per cent rise in fee income to €88 million on top of firm’s near 23 per cent increase in revenues the previous year.
Over the past two years, Ernst & Young’s fee income has risen more than 57 per cent and this has meant that the firm is now unchallenged as number three in the industry’s pecking order when before it was vieing with Deloitte & Touche for that honour. Ernst & Young now has a 15.3 per cent market share compared to Deloitte & Touche’s 13.1 per cent.
PwC and KPMG still heads the rankings when it comes to its partners’ ability to generate fee income, although the income per partner at both firms fell last year. KPMG’s 64 partners generated average revenues of €2.1 million while PwC’s 70 partners generated average income of just over €1.9 million. Income per partners at both firms fell, however, partly reflecting the corporate changes during the year – KPMG’s acquisition of Andersen’s and PwC’s sale of its consulting arm.
Ernst & Young has in the past lagged the other members of the ‘big four’ when it came to partners’ ability to generate fee income, but the gap is narrowing with E&Y’s 46 partners producing revenues of €1.93 million, a near 23 per cent increase on the previous year. There was also strong growth in income per partner at some of the second and third-tier firms with partners at BDO Simpson Xavier, Grant Thornton, Farrell Grant Sparks, JPA Brenson Lawlor, Baker Tilly O’Hare and Caplin Meehan all producing double-digit growth in fee income.
The growth in fee income was matched by growth in employment in the industry with total numbers up 12 per cent to 5,900. The biggest growth came at KPMG where payroll numbers increased 30 per cent to 1,416, partly reflecting the inclusion of former Andersen staff. In contrast, the sale of the consulting arm contributed to a 5 per cent fall in PwC’s payroll – also to 1,416. |
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| Article appeared in the October 2003 issue.
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