There has been an increase in demand for advice on how to handle the Brexit crisis with the accountancy and consulting firm PwC which has partly helped the firm to reach profits of more than £1bn and consequently the partners at the firm will be paid an average of £765,000 this year.
An average of £765,000 will be collected by a total of 913 partners at the firm which previously was known by the name of PricewaterhouseCoopers. That takeaway will be the biggest annual payday in a decade for the accounting firm and would be an increase of 7.4 per cent over the payout given to the partners in 2018.
Similar to the record payout to partners at PwC, rival Deloitte had also reported similar record high payouts for its partners last month with an average pay of £882,000. It is likely that there would be an increased clamor and political pressure to break up of the so-called big four accountancy firms because of the huge payouts. These big four accounting companies have been criticized repeatedly of allegations of slackness in auditing of companies, indulging in anticompetitive practices and issues of conflicts of interest.
A radical overhaul of the audit market has been proposed by the competition watchdog which would mandate the big four accounting companies of the world – also including EY and KPMG, to separate their audit and consulting businesses and functions wherein reach of the businesses would have heads, management teams, accounts and pay policies.
Allegations of an “unsatisfactory” deterioration in inspection results for its audits of FTSE 350 clients were brought against PwC in July by the Financial Reporting Council (FRC) regulator. And after the accounting firm charged £44m for services rendered for a year as special project managers on the administration of the collapsed construction company Carillion was severely criticized by MPs in the Unite d Kingdom earlier in the year and the company was accused of “milking the cash cow dry”.
He was “disappointed that this year’s FRC audit quality inspection results were below the high standards we are committed to achieving on all of our audits”, said the firm’s chairman, Kevin Ellis, and added that the company was “committed to playing our part in building trust and confidence in the sector”.
The biggest single pay deal of £3.7m will be given to Ellis which is 8.9 per cent more than what he had been given in 2018. An average payout of £1.98m would be made to the 12 people serving on the firm’s management board. The firm has just 21 per cent women in its board while the rest are men.
During the current year till the end of June, the revenue generated by PwC increased by 12 per cent to touch £4.2bn, with 22 per cent increase in revenues from its consultancy business. It is believed that a significant part of the consultancy services offered by PwC during this period were closely related to concerns of clients over Brexit.
In addition to demands from clients who sought to tackle the new technology revolution, one of the factors of the increased business from its consultancy arm was Brexit related suggestions, said a spokeswoman. However no tally of the Brexit-related work had been maintained by the company. £400m from the UK government for public sector projects was also included in the revenues of the company.
(Adapted from TheGuardian.com)