PwC posted record UK revenues of £3.6bn in the latest financial year but said the fragile business environment following Britain’s vote to leave the EU had dented profits and triggered pay cuts for senior executives at the accountancy firm.
Profits for 2017 were £822m, down 1% on 2016 contributing to an 8 per cent fall in profits distributed to each of the 953 equity partners at the firm which translates to about £54,000 less.
PwC chairman and senior partner Kevin Ellis told CCH Daily the biggest factor was that growth was not as strong as previous years.
‘Part of it is more partners sharing in the profit as we’ve brought more partners through. Growth wasn’t as strong with the uncertainty created by Brexit – companies spend longer making their decisions over various transactions,’ he said. ‘The other big factor is that we’ve invested in technology, including a blockchain business in Belfast and an IT technology hub in Reading to make sure we’re relevant for tomorrow.
In August 2017, the FRC issued PwC a £5.1m fine – its largest ever – and a severe reprimand for what the regulator termed ‘extensive’ misconduct in the audit of the financial statements of RSM Tenon Group, for the financial year ended 30 June 2011, writes CCH Daily, quoting Ellis as saying: “Obviously any impact on reputation from fines is a serious one.”
Ellis told The Daily Telegraph that the string of bad press had not been bad for business, and said the accounting giant was on a hiring spree, with 1,000 current vacancies. “[It’s] always a concern, you don’t want criticism. But when you get it wrong we hold our hands up.”