Loss of big name clients inevitable in wake of audit tendering overhaul, says PwC boss
PricewaterhouseCoopers chairman Ian Powell has warned that the accountant will lose audit clients following a sea-change in the way the market operates, despite announcing that 874 partners have pocketed an average of £705,000 each in 2013.
PwC's coffers have been boosted of late by a number of high-profile audit wins, such as HSBC and Cairn Energy, as big listed groups look to put that work out to competition on a more regular basis.
FTSE 350 companies have been accused of having too cosy a relationship with the Big Four bean counters, which has led many to review their auditors ahead of Competition Commission reforms that will mandate them to do so every five years.
Despite the successes, Mr Powell (below), pointed out that PwC is the country's biggest auditor of FTSE 100 blue-chip companies, so it would be "naïve" to think that it wasn't "likely to lose some" big-name clients.
KPMG, Deloitte and EY are second, third and fourth in a small gaggle of auditors that have a stranglehold of the market, which has angered smaller rivals and prompted the regulator's intervention.
But Mr Powell was buoyed by PwC's results, which saw revenue grow 3% to nearly £2.7bn in the year to June, with opportunities for further success being eyed up in the Middle East and Central and Eastern Europe.
The partners' share of the profits was up 4% on 2012, while Mr Powell pocketed £3.6m, a rise of £300,000.
At group level, profit was up from £727m to £740m, but Mr Powell stressed that competition for work "remains tough".
The Big Four accountants have been keen to emphasise that they fight ferociously to win work from each other, meaning that there is sufficient competition to keep their fees down.