FTSE 100 Auditors Survey 2017 shows rotation impact as EY increases market share
According to Accountancy’s FTSE 100 2017 auditor survey, there is still only one company in the FTSE 100 that is audited by a firm outside the Big Four of Deloitte, EY, KPMG and PwC
1 Nov 2017
Randgold Resources, the South African miner, retained BDO as its auditor following a tender process this year, maintaining the sixth largest UK firm’s solitary position in the highest echelon of corporate UK, a market currently worth £637m, up £48m, or 8.1%, on last year’s survey. Grant Thornton no longer handles any FTSE 100 audits since client Sports Direct dropped out of the index in 2016.
This year’s growth is actually down on 2015-16, when there was a 10% year-on-year increase, jumping from £534m to £589m.
The story is similar for total fees, which takes in non-audit services (NAS), hitting £896m in 2016-17, up from £856m, representing 4.6% growth over the 12-month period.
In the 2016 survey, PwC earned £308m in audit fees from the then FTSE 100 constituents. As it stands, PwC remains the largest auditor of FTSE 100 companies, both in terms of number and value, although its share has diminished slightly. Based on the latest available annual report of each of the FTSE 100 companies, PwC has 37 clients, down only one on Accountancy’s 2016 FTSE 100 auditor survey. The combined value of these audits was up 8% to £297m (2015-16: £275m).
KPMG has seen its share of the market drop marginally to £113m (2016: £118m), a 4.2% fall, derived from 24 audit clients (2016: 27). Deloitte’s 21 clients (2016: 23), registered a 9% fall in fee income on last year at £90m (2016: £99m), while EY was the biggest winner with a 115% rise in revenue to £136m (2016: £63m) after gaining six clients, bringing its total number of clients to 17 (2016: 11).
NAS followed a similar pattern. This year, PwC took £85m in NAS from its FTSE 100 audit clients, compared with £86m last year. Deloitte was paid £50m this year (2016: £46m), EY £14m (2016: £8.6m) while KPMG fell from £37m last year to £26m in this year’s survey. The average three-year ratio of non-audit to audit fees currently stands at 38%. The 2016 survey showed the ratio to be 45%, a move that will hearten the regulators and illustrates how buying patterns are changing.
For more, read FTSE 100: Auditors Survey 2017 here.
Report by Philip Smith