RECORD revenues ought to be nothing but a good thing, but in PwC's case it will also underline existing concerns, in the context of the Competition Commission [CC] taking an interest in whether the Big Four are too dominant in the audit marketplace.
An appreciation of why can be seen in survey results published by the CC last week. The survey canvassed firms across the FTSE 350 and beyond. It revealed that all audit fees reported above £1m were for audits carried out by Big Four firms and of the 474 companies in the sample only 47 companies were audited by non-Big-Four firms. Fully two-thirds of the financial directors and chief financial officers surveyed had previously worked for one of the Big Four.
You don't get to dominate this market without delivering. Among the FTSE 350 audit quality was reviewed most often. But with more than 80 per cent of all financial directors and audit committee chairs considering the public reputation of the audit firm important - and only 44 per cent of audit committee chairs worrying about the cost - Big Four revenues are likely to remain healthy.