KPMG passes PwC in accountancy fee table

KPMG has overtaken PricewaterhouseCoopers (PwC) to become the Republic's largest accountancy firm by a whisker, according to a new survey by Finance magazine.

The study finds that KPMG's fee income climbed by 12.6 per cent to €152 million this year. PwC's fee income rose by 11 per cent to €151 million.

The difference of just €1 million between the top two firms illustrates the fierce competition in the accountancy sector. This year's rankings reverse the 2003 result, where PwC surpassed KPMG by €1 million.

KPMG's 2004 figures include a first-time full-year contribution from Andersen, which it bought in the course of the previous year.

Farrell Grant Sparks emerged as the most efficient firm in the study, which for the first time analysed fee income according to staff numbers.

Each of Farrell Grant Sparks's 99 staff generated fee income of €127,273 this year. The next most efficient firm by this measure was Deloitte, where each of the 738 staff members generated €118,326. KPMG was the fifth most efficient firm, while PwC came seventh in the table.

Ernst & Young retained its third position in the fee income table this year, although the firm posted slower growth than its two larger competitors.

Fee income at Ernst & Young climbed by 5.7 per cent to €93 million this year. Deloitte took fourth position, with €87.3 million, while BDO Simpson Xavier came fifth with €51 million.

When the 17 companies polled are taken together, income was up by 11 per cent at €636.3 million. Caplin Meehan posted the fastest growth over the year, as income grew by 19.7 per cent to €3.6 million. Horwath Bastow Charleton grew its income by 19.6 per cent to €8.4 million.

The only company to report a decline in income this year was OSK where fees generated fell by 3.7 per cent to €5.3 million.

Not all accountancy firms chose to reply to the survey, which was conducted over September and October.

Almost a third of the contributing companies said corporate finance was their biggest growth area this year, followed by tax.

Finance notes that the uptick in corporate finance business indicates a wider trend of economic buoyancy.

This survey shows that the division of market share in the accountancy market shifted little over the year.

The top two were again extremely close on this measure, with KPMG holding 23.9 per cent of the market compared to PwC's 23.7 per cent. KPMG held 23.5 per cent in 2003, while PwC had 23.7.

The survey shows that Ernst & Young held 14.6 per cent of the market this year, down from 15.3 per cent in 2003. Deloitte grew its position from 13.1 per cent to 13.7 per cent over the year.

Most respondent firms were bullish on their prospects for 2005, with the 17 companies collectively expecting to take on 1,176 staff over the coming year. More than half of these additional recruits will be trainees.

PwC is currently the largest firm by staff numbers, with 1,416 employees, including 70 partners. KPMG has the same number of total staff but has eight fewer partners than its main competitor.