BRITAIN’s biggest accounting firm reported record turnover of £2 billion yesterday but its rate of growth began to slow.
PricewaterhouseCoopers (PwC) said that its revenue rose 11 per cent for the year ended June 30, compared with 12 per cent the previous year.
Kieran Poynter, the firm’s chairman, said that he expected to see growth continue in single to double-digit figures. The firm said that its audit fees were coming under pressure, as the initial boost to profits from regulations introduced after accounting scandals at Enron and WorldCom eased.
Revenue growth at the firm’s assurance arm narrowed to
11 per cent from 18 per cent a year ago. The practice, which advises clients on the introduction of the International Financial Reporting Standards and on the impact of SarbanesOxley, reported turnover of £952 million.
Advertisement
However, the firm said that it had also benefited from greater demand for tax and pensions advice.
The Government’s increased efforts to stamp out tax avoidance had prompted new clients to hire PwC to help to review their policies, the firm said.
PwC earned £592 million in revenue from tax services. The rate of growth at the tax practice, which languished in 2002 to 2004, nearly doubled to 15 per cent from 8 per cent a year ago.
Operating profit at PwC jumped 24 per cent to £577 million, excluding a £122 million one-off credit from its pension scheme.
The firm’s 793 partners earned an average £716,000 each in profit, compared with £611,000 a year ago.
Advertisement
Partners at PwC still lag behind Deloitte, the most profitable of the big four accounting firms, with average profits each of £765,000. Mr Poynter, who earned £2.5 million, is the second best paid accountant in Britain. His counterpart at Deloitte, John Connolly, was paid £3.6 million.
In a fortnight, PwC will become the first accounting firm to come before the Accountancy Investigation & Discipline Board, which was introduced after the scandals at Enron, Tyco and WorldCom.
It is the subject of a complaint over accounting irregularities in its audits of Mayflower, the owners of Dennis Bus, the public transport manufacturer. Mayflower collapsed in 2004. If found guilty, PwC could be reprimanded, fined or expelled from the Institute of Chartered Accountants.
PwC denies wrongdoing.