Newspaper article The Evening Standard (London, England)

Big Four Accountants Take a [Pounds Sterling]200 Million Hit after Enron

Newspaper article The Evening Standard (London, England)

Big Four Accountants Take a [Pounds Sterling]200 Million Hit after Enron

Article excerpt

Byline: ROBERT LEA

THE TOP UK accounting firms have lost more than [pounds sterling]200 million a year in fees from major corporate clients on the back of the Enron scandal, the Evening Standard can reveal.

A global clampdown on the add-on services audit firms can sell to their clients has seen the Big Four accounting giants lose lucrative consulting contracts on a massive scale.

That, plus a collapse in mergers and acquisitions and a slowdown in corporate activity, has seen blue chip earnings for Pricewat e rhouseCoopers, KPMG, Ernst & Young and Deloitte & Young tumble.

Latest FTSE 100 annual accounts show many of Britain's biggest companies slashing the fees they are paying their external accountants.

While audit fees among the UK's top companies have stayed fairly stable, half a dozen blue chip companies alone have chopped some [pounds sterling]100 million worth of work with their accountants.

In the light of the Enron scandal - when audit failure was blamed on bust accountant Andersen earning the majority of its $100 million a year from the energy trader in non-audit work - pressure has grown on companies to break up allegedly "cosy relationships" with its audit firms.

Unilever, historically one of the single largest earners for Britain's biggest auditor PricewaterhouseCoopers, cut its payments for non-audit services by nearly [pounds sterling]30 million to just [pounds sterling]15 million in 2002. …

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