The Big Four's audit fee income has risen markedly for the first time in several years, but most other large firms continue to report a decline in income from audit, according to the Financial Reporting Council's (FRC's) annual report on the profession.
Key Facts and Trends in the Accountancy Profession shows that audit fee income for the Big Four went up by 4.9%, compared with 0.9% the year before and a 2.2% drop in 2010-11. In contrast, audit fee income for firms outside this group fell by 5% this year, double last year's decline of 2.2%.
However, the total fee income for non-Big Four firms has improved, and is up by an average of 0.6%, the first year since 2009 that this group has seen an increase rather than a decline in total fee income. The total fee income for the Big Four rose by an average 7.7%.
The FRC analysis shows that percentage of fee income derived from non-audit clients has been rising steadily over the past five years for both the Big Four and for many of the larger firms outside of the Big Four. This is mirrored by a slow decrease in the proportion of fee income from non-audit work for audit clients.
Non Big Four firms' non-audit fee income to non-audit clients increased by 5.9% in 2011-12 compared with 0.6% in 2010-11, which the FRC says illustrates their ability to penetrate a wider client base.
Audit fee income per responsible individual in the Big Four firms has grown in 2012 by 7%. PwC tops the table for earning the most from audit fees (£570m) followed by Deloitte (£466m), KPMG (£431m), and Ernst & Young (£318m). Grant Thornton's audit income is calculated at £102m and BDO's at £91m.
The FRC report notes little change in the number of listed companies audited by firms outside the Big Four. PwC has 40 FTSE100 audits, nearly double that of KPMG (23) and Deloitte (21), while EY has 15 and BDO has one. Deloitte has the most FTSE250 clients (68), followed by PwC (62), KPMG (51) and EY (44), while BDO has seven.
Total membership of accountancy bodies continues to grow steadily with growth rates for 2008-12 at 2.6% in UK and 3.5% worldwide. The total number of students (UK and worldwide) has risen, but there has been a 0.7% decline in student numbers in the UK in comparison to a 4% growth internationally.
The report highlights a steady rise in the number of female students, up from 32% in 2008 to 35% in 2012, with ACCA and CAI reporting the largest proportion of women. For the first time, FRC also shows the percentage of female principals within the largest firms. This list is headed by EY, with 16% of women in senior roles, followed by Baker Tilly and Deloitte (15%), and KPMG and PwC (14%). There is also strong female representation amongst some of the medium sized firms, with Haysmacintyre recording 24%, Kingston Smith 20% and RSM Tenon 19%.
Paul George, FRC executive director conduct said: ' I am pleased that the report reveals a profession that continues to be attractive with the number of members continuing to increase both in the UK and worldwide. It is notable however, that whilst student numbers also increased worldwide, they fell in the UK for 2012.'
