THE BIG FOUR audit firms enjoyed a 7.7 per cent rise in fee income in the last financial year, while smaller accountancy groups have fared less well with income up an average of just 0.6 per cent, industry figures showed yesterday.
PwC, KPMG, Deloitte and Ernst & Young have also steadily increased the amount of non-audit work they perform, which now makes up 64 per cent of their fee income, according to figures from watchdog the Financial Reporting Council.
However, the largest firms now do slightly less of this work for their audit clients – making up around 13 per cent of overall income, down from 14 per cent in the previous year.
Audit fees bring in 23 per cent of their income on average. The Big Four conduct audits for all but one of the FTSE 100 companies, a dominance of the market that has not changed over the last year.
But at the smaller end of accountancy, firms have found it more difficult to bounce back from the recession. Fee income rose 0.6 per cent, but this growth masked a five per cent fall in audit fees and a 7.5 per cent drop in non-audit work for the same clients.
The FRC said there are 10 per cent fewer audit firms registered than there were in 2008, following a 1.8 per cent slide in the year to 7,239.
The mixed picture has not discouraged new entrants, with 165,000 students now taking accountancy courses in the UK and Ireland.