Messrs Skilling and Lay of Enron fame might be toast these days, with a very long run in jail to look forward to, but amongst firms of accountants across the globe they might well be the subject of toasts. According to a report in Accountancy magazine due to be published later this week, the UK’s top 60 accountancy firms have seen their income surge a cool £1bn, jumping to £7.7bn. Why is that? In part at least, it’s thanks to the tough Sarbanes Oxley regulations brought out in the wake of the Enron collapse to avoid a similar scandal in the future. EU bureaucrats did their bit too, with the International Financial Reporting Standards also helping boost the coffers at accountancy firms.
While former staff for the once mighty Arthur Andersen, the firm that audited the books at both Enron and Worldcom, might see things differently, the woes created by the shock collapse of the two firms seem to have acted as a boost to the UK.
The City, for example, is booming in part because London is becoming an ever more popular home for IPOs; the stringent Sarbenes-Oxley regulation makes US flotations less attractive. As a result, the London property market has seen a 2006 boom with the more expensive houses in the most upmarket areas doing especially well. The recent merger and acquisition frenzy for control of stock exchanges has, at least in part, been helped by the tough new US rules too, with both NASDAQ and the New York Stock Exchange trying to diversify abroad.
The big winner amongst the accountants last year was the UK third biggest, KPMG, which saw fees jump 20 percent to £1.3bn. The world’s largest accountancy firm, PricewaterhouseCoopers, saw income up 13 percent hitting £1.8bn.
Overall, growth amongst the 60 firms averaged 14 percent, compared to just 4 percent the year before.
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