| Fee income and productivity jumps in accountancy |
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| KPMG has beaten PricewaterhouseCoopers (PwC) to the top spot to become Ireland’s largest accountancy firm in terms of fee income – but only by a whisker, according to the 2004 FINANCE survey of the industry, which shows growth amongst the 'Big 4' is up 11 per cent on 2003, and that Farrell Grant Sparks is the most efficient accountancy firm in Ireland, in a year when productivity gains of up to 23 per cent were recorded. |
For the first time KPMG has overtaken PricewaterhouseCoopers (PwC) to become Ireland’s largest accountancy firm. Last year PwC came in first with just €1 million in extra fee income than KPMG, but this year it was KPMG’s turn to take top spot – and by the same margin. Fee income at KPMG was €152 million, an increase of 12.6 per cent on the year, while at PwC, fee income was up 11.0 per cent on last year at €151 million. This is the first year that KPMG benefited from a full year inclusion of the activities of the Irish Andersen practice, which it acquired in 2002. | | Dennis O'Connor |
As per last year, the figures show that KPMG and PwC remain almost deadlocked in terms of fee income and market share. Both have cornered almost 24 per cent of the accountancy market.
Amongst the ‘Big 4’ accountancy firms, fee income was up by 11 per cent on last year’s figures to €483.3 million, with Deloitte posting the strongest growth at 16 per cent. Ernst & Young had the slowest year, with fee income up 5.7 per cent on 2003.
Overall, amongst the 17 companies polled, income was up by 11 per cent at €636.3 million. Outside of the ‘Big 4’ the fastest growing firms over the year were Caplin Meehan (up 19.7 per cent),Horwath Bastow Charleton (up 19.6 per cent), and Farrell Grant Sparks (up 17.8 per cent.
‘Efficiency factor’
This year, for the first time, the survey calculated how efficient each of the firms are, by looking at how much income is generated per staff member. Farrell Grant Sparks is the most efficient firm, with its 99 staff members generating income of €127,273 each, followed by Deloitte, with income of €118,326 for each of its 738 staff members, and BDO Simpson Xavier, with €117,771 for each of its 433 members. For charageable staff only, Farrell Grant Sparks is again the most efficient, followed this time by Ernst & Young, which generated income of €135,568 for each of its 686 chargeable staff.
As was the case last year, KPMG’s partners are the most profitable, with income per partner at €2.5 million this year, followed by PricewaterhouseCoopers with income per partner of €2.2 million.
Recruitment
An additional 1176 people are expected to be recruited amongst the responding firms over the next year, up 21 per cent on 2003. Over seven hundred of the new recruits will be entering the industry for the first time, as they will be trainees. | | Key statistics for the ‘Big 4’ 2004 |
Outlook
The introduction of International Financial Reporting Standards (IFRSs) in 2005 is expected to boost the accountancy firms’ business, and of the 17 firms surveyed by FINANCE in this survey, all but one said they expect the move to IFRSs to result in an increase in their fee income. Donal O’Connor, managing partner with PricewaterhouseCoopers (PwC), said that the transition to IFRSs is the greatest change in accounting standards of the past 25 years, and will therefore require significant support services to enable clients convert their reporting methods. On the issue of regulation, twelve of the firms believe that the threat of excessive regulation is very real. |
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| Article appeared in the October 2004 issue.
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