PwC will lose audit clients as rules change, boss warns

Ian Powell, chairman of PricewaterhouseCoopers, has warned that the accountant will lose audit clients after a change in the way the market operates, despite announcing that 874 partners have pocketed an average of £705,000 each this year.

PwC’s coffers have been boosted of late by a number of high-profile audit wins, such as HSBC and Cairn Energy, as big listed groups look to put that work out to competition more regularly. FTSE 350 companies have been accused of having too cosy a relationship with the Big Four bean-counters, which has led many to review their auditors before Competition Commission reforms force them to do so every five years.

Despite the successes, Powell pointed out that PwC is the country’s biggest auditor of FTSE 100 blue-chip companies, so it would be “naïve” to think it wasn’t “likely to lose some” big-name clients. KPMG, Deloitte and EY are second, third and fourth in a small gaggle of auditors that has a stranglehold on the market, which has prompted the regulator’s intervention.

But Powell was buoyed by PwC’s results, which saw revenue grow 3% to nearly £2.7 billion in the year to June, with opportunities for further success being eyed up in the Middle East and Central and Eastern Europe. The partners’ share of the profits was up 4% on 2012, and Powell pocketed £3.6 million, up £300,000.

Group profit was up from £727 million to £740 million, but Powell said competition for work “remains tough”.