Summarizing all the auditor changes in Q4’2020, EY made the biggest gain with 9 new clients while losing only one client. Deloitte, KPMG, and PwC gained 7,5, and 3 clients respectively. KPMG lost 5 clients in Q4’20 followed by PwC which lost 4 clients.
EY UK had a fee income of 2.6 billion pounds in FY20 which is an increase of 5% from the prior year. For FY19 EY UK had a fee income of 2.4 billion pounds. See below for a breakout of EY fee incomes over the past five years. Fee income grew on an average of 5% over the past five years.
Looking at the break-down of fee income among audit clients and non-audit clients we notice that direct audit fees has increased on an average by 6% while non-audit services to audit clients has decreased on an average by 8%. Advisory income has increased on an average by 7% for 5 years. The table below shows the break-down in millions pounds.
EY Quality Report
EY’s UK 2020 audit quality report mentions that of the FTSE 350 audits, 78% of the audits have been graded good or limited improvements needed. This is an improvement from the 40% score noted in 2014.
The Financial Reporting Council (FRC) published its latest inspection reports on EY in July 2020. Of the 14 audits reviewed, 10 (71%) were graded as good or requiring limited improvements. 3 (22%) and 1 (7%) audits were graded as improvements required and significant improvements required respectively. For FTSE 350 audits, of the 10 audits reviewed, 7 (78%) were graded as good or requiring limited improvements. 1 (11%) and 1 (11%) audits were graded as improvements required and significant improvements required respectively. The summary of EY’s inspection results for the past five years is noted below. In 2015, 85% of audits were graded as good vs. 71% in 2019.
EY FTSE 350 Clients
EY audits 68 of the FTSE 350 companies bringing in a total revenue of 225 million pounds. Shell is the biggest audit client of EY which brings in total revenue of 41 million pounds i.e. 18% of the total FTSE 350 audit fees. The top 5 audit clients collectively brings in 55% of the total audit fee revenue (a pretty significant concentration!). All 68 EY clients and their audit fee is included in the below graphic.
The top 25 FTSE 350 audit clients of EY in UK in the order of audit fee revenues are as follows:
Company
Auditor
Total ('000) GBP
Royal Dutch Shell Plc
EY
40,754
Royal Bank of Scotland Group plc
EY
34,500
Vodafone Group plc
EY
22,858
CRH plc
EY
16,085
RELX plc
EY
8,900
Associated British Foods plc
EY
8,800
Imperial Brands Group
EY
7,200
International Consolidated Airlines Group SA
EY
6,070
InterContinental Hotels Group plc
EY
5,887
Investec Plc
EY
5,646
Schroders plc
EY
5,600
London Stock Exchange Group plc
EY
5,000
Sage Group plc
EY
5,000
Sainsbury (J) plc
EY
4,000
Virgin Money UK plc
EY
3,980
IMI plc
EY
3,100
Evraz plc
EY
3,019
Petrofac
EY
3,019
Tate & Lyle plc
EY
2,600
3i Group Plc
EY
2,500
SSE plc
EY
2,180
Phoenix Group Holdings Plc
EY
1,970
Beazley plc
EY
1,811
UDG Healthcare plc
EY
1,699
Fresnillo
EY
1,545
Post a comment on any other metric you would like to know about EY UK or if you need this dataset. Look into our other blog posts on PwC, KPMG, and Deloitte UK. We are starting a new blogpost to collect the salary data to help all current and prospective employees of accounting firms. So if interested, update the form and results will be published soon.
KPMG UK revenues for FY20 was 2.3 billion pounds. Revenue was lower by 4% when compared with FY19. FY19 fee income was 2.4 billion pounds. See below for a breakout of KPMG fee incomes over the past five years. Fee income grew on an average of 3% over the past five years.
Looking at the break-down of fee income among audit clients and non-audit clients we notice that direct audit fees has increased on an average by 6% while non-audit services to audit clients has decreased on an average by 11%. Advisory income has increased on an average by 5% for 5 years. The table below shows the break-down in millions pounds. There is a consistent trend among all big4 firms where non-audit services to audit clients are decreasing.
KPMG Quality Reports
KPMG’s UK 2020 Transparency Report mentions that of the FTSE 350 audits, 58% of the audits have been graded as good or limited improvement needed while 42% were graded as improvement needed.
The Financial Reporting Council (FRC) published its latest inspection reports on KPMG in July 2020. Of the 18 audits reviewed, 11 (61%) were graded as good or requiring limited improvements. 7 (39%) were graded as improvements needed. Of the 12 FTSE 350 clients reviewed, 7 (58%) were graded as good or limited improvement while 5 (42%) were graded as improvements needed. In regards to the FTSE 350 audits reviewed, FY20 results reflects a significant decline from the 80% good or limited improvement rating received in FY19. The graph below summarizes the results FRC inspections for all audits and FTSE 350 audit clients.
KPMG FTSE 350 Clients
KPMG audits 88 of the FTSE 350 companies bringing in a total revenue of 347 million pounds. KPMG brings in the largest revenue among all big4 companies. Barclays is the biggest audit client of KPMG which brings in revenue of 56 million pounds, i.e. 16% of the total FTSE 350 audit fees. British American Tobacco is the next biggest audit client which brings in 25 million pounds. The top 5 audit clients collectively bring in 41% of the total revenue. All 88 KPMG clients and their audit fee is included in the below graphic.
The top 25 clients of KPMG in this market are:
Company
Auditor
Total ('000) GBP
Barclays plc
KPMG
56,000
British American Tobacco plc
KPMG
25,200
Prudential plc
KPMG
22,943
Standard Chartered plc
KPMG
20,150
BT Group plc
KPMG
19,752
Micro Focus International plc
KPMG
15,396
Reckitt Benckiser Group Plc
KPMG
14,500
Unilever plc
KPMG
14,392
BHP Group Plc
KPMG
10,964
M&G plc
KPMG
9,600
Legal & General Group plc
KPMG
9,500
Smurfit Kappa Group Plc
KPMG
8,800
Standard Life Aberdeen Plc
KPMG
8,100
RSA Insurance Group
KPMG
6,900
Smiths Group Plc
KPMG
6,400
Compass Group plc
KPMG
6,300
Capita plc
KPMG
6,100
Wood Group (John) Plc
KPMG
5,434
Smith & Nephew plc
KPMG
5,132
Quilter Plc
KPMG
5,000
Experian Plc
KPMG
4,302
IWG plc
KPMG
3,600
Balfour Beatty plc
KPMG
3,300
Royal Mail PLC
KPMG
3,147
DCC plc
KPMG
3,016
Post a comment on any other metric you would like to know about EY UK or if you need this dataset. Look into our other blog posts on PwC, KPMG, and Deloitte UK. We are starting a new blogpost to collect the salary data to help all current and prospective employees of accounting firms. So if interested, update the form and results will be published soon.
