Economic boom benefits accountancy

ACCOUNTANCY practices benefited from the strong economy with a 6.7 per cent growth in fee income in the last financial year.

The annual survey by Finance magazine of top accounting firms - those with fee incomes over £1 million - showed that 23 firms generated fee income of £212 million in 1995/1996. The survey is based on the fees generated by the top 23 firms in their last financial year which ended in or before May 1996.

KPMG continues to be the biggest earner with a 10.2 per cent rise in fee income to £39.9 million for 1996. This contrasts with a 1.1 per cent fall in fee income in 1995.

KPMG managing partner, Mr Jerome Kennedy, said the results reflected good performances by all parts of the firm and growth in work from companies in the International Financial Services Centre. Growth also reflected the firm's focus on different industries, with work now organised by industry sector rather than by traditional accounting function, he said.

Craig Gardner Price Waterhouse retained second place in the league table in 1996 with a 5 per cent rise in fee income to £32.6 million. Ernst and Young remained in third position recording a 5 per cent rise in fee income.

Bastow and Charlton, the twelfth largest firm, reported the largest percentage rise in fee income over the period with growth of 17.4 per cent to bring its fee income to £2.8 million. The second fastest growth was recorded by O'Hare and Associates with an increase of 15 per cent in fee income to £1.4 million.

Only the smallest of the 23 practices, Hayden Brown, recorded static income growth in 1996 with fee income unchanged at £1.1 million.

The six largest practices accounted for just over 77 per cent of the total fee income generated by the 23 firms surveyed, down from 80 per cent in the previous year.

Ranked by productivity - income per total chargeable staff - Ernst and Young came first followed by Arthur Andersen and KPMG.

Ranked by number of partners Craig Gardner Price Waterhouse was the largest with 43, one down on the number for 1995. It was followed by KPMG with 42 partners and Ernst and Young with 38.