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UK partners at BDO have been handed a pay rise for the first time in three years after the accountancy firm generated a record £1bn in revenue, bucking a more downbeat trend at most larger rivals.
The UK arm of the world’s fifth-largest accounting firm said on Monday its partners had taken home an average of £681,000 before tax for the 12 months to early July, an increase of 12 per cent compared to the previous year.
Revenues at the firm rose 8.6 per cent to just over £1bn for the first time, helped by higher investment in digitisation, offices and staff, while operating profits rose 15 per cent to £227mn, “despite a backdrop of economic uncertainty for the UK economy”.
The improved performance of BDO contrasts with most of its Big Four rivals. Payouts to UK partners at EY, PwC and Deloitte have fallen this year, and only rose at KPMG due to a cull in the firm’s senior ranks.
Britain’s biggest accountancy firms have been cutting hundreds of staff, with Deloitte the latest to do so this month, as they contend with higher costs and waning demand for some of their services against a gloomy economic outlook.
BDO’s managing partner Mark Shaw said the firm had lifted its headcount from 7,500 to 8,000 as it benefited from the resilience of mid-sized companies, which were “the UK’s economic engine; they are driving economic growth and employment”.
The firm hired 600 new trainees in the past year. But Shaw said: “Uncertainty in the UK and across global markets is likely to continue, and so we will not be complacent.”
BDO was criticised by the UK Financial Reporting Council last year and told to improve the quality of its audits after the accounting watchdog found “unacceptable” shortcomings in its work.
This month the firm suffered the ignominy of the regulator banning a former BDO auditor for 20 years for faking electronic signatures and evidence and filing false company accounts over a period of five years. The Financial Reporting Council said it had also issued “proposed formal complaints” against BDO and two former partners as part of its investigation into the wrongdoing.
BDO increased its number of partners from 441 to 466 last year. Over the past two years, their payouts were reduced as the firm reinvested more into its operations, including the launch of a generative AI platform and replacing or revamping many of its UK offices.
The firm said revenues at its audit arm rose 8.4 per cent, were up 10.2 per cent at its advisory business and increased 7 per cent at its tax unit.