Profits soar at Big 4 firm
PwC partners enjoy £765,000 pay day amid attack on audit work
Kevin Ellis: ‘We welcome more choice‘
PwC partners were paid an average £765,000 in the past 12 months, up 7.4% from £712,000 in 2018 in spite of the firm being criticised for its audit performance.
Group profit rose 8.7% to £1.016 billion while revenue was up 12% at £4.23bn.
The firm is one of the Big Four accountancy firms which have been heavily reprimanded by MPs and regulators over their failure to spot high profile company failures such as Bhs and Carillion. This has led to demands for a separation of their advisory and audit businesses to avoid conflicts of interest.
PwC has resisted calls for the break-up of the Big Four and has also criticised recommendations from the Competition and Markets Authority for the introduction of joint audits, where responsibility for an audit is shared between a Big Four firm and a challenger firm.
However, throughout 2019, PwC has invested in a major project assessing the current role of auditors and how this role must change.
In a statement with today’s figures, Kevin Ellis, PwC chairman and senior partner, said: “We have responded constructively to the multiple regulatory reviews into the audit profession.
“Our Future of Audit initiative which launched in November 2018 saw us engage with hundreds of stakeholders on how they believe the audit needs to evolve. We welcome more choice in the market and reforms that will improve audit quality. We are committed to playing our part in building trust and confidence in the sector.
“We rolled out our wide-ranging Programme to Enhance Audit Quality in which we are recruiting an additional 500 people, further investing in training and technology, and have commissioned an independent paper on the culture of challenge in audit from professor Karthik Ramanna.
“We were disappointed with this year’s FRC Audit quality results and supporting our teams to deliver high quality audits consistently is the primary objective for our Audit business.”
The firm now employs more than 1,000 people in Scotland, helped by a 13.4% increase in graduate recruitment numbers this summer.
As part of a major push across the UK, the firm now employs more than 10,000 staff outside London and is planning to invest £140 million in the year ahead in people, quality, training, technology and upskilling.
The majority of the firms’ staff in Scotland are based between Edinburgh and Glasgow, employing 524 and 405 respectively, with a further 120 based in Aberdeen.
The graduate intake, which this year totals almost 100.
Across PwC UK’s business divisions, Assurance revenues increased by 8.1%, Consulting revenues were up by 22.1%, Deals grew by 8.7%, and the Tax practice, which includes specialist areas such as workforce consulting, legal services and pensions experienced growth of 13.5%. The Middle East practice also grew by 19.1%.
In Scotland, growth was concentrated on areas of key focus for the firm, including private business and international markets.
Claire Reid: strong position
In its Deals business, revenue growth was in line with the UK overall, highlights included supporting Shell, SSE and Wood Group on disposal activity in the energy space,the listing of Nucleus and the disposal of Alliance Trust savings in the financial services sector.
Claire Reid, regional leader for PwC in Scotland, commented: “We are in a strong position going into our 2020 financial year.
“It is particularly pleasing to see revenue growth in areas where we see potential for expansion, such as in private business and international markets.”