Sarbanes-Oxley Credited for Revenue Increase in U.K. Firms
The Sarbanes-Oxley Act is giving a boost to United Kingdom accounting firms, which are helping 40 of the country's top 100 firms to comply with the act.
Because those 40 firms are listed publicly in the U.S., they are required to comply with Sarbanes-Oxley, which was passed in 2002 to clean up corporate America.
The U.K. branches of two Big Four firms-PricewaterhouseCoopers LLP and Ernst & Young LLP-have reported increases in revenue thanks to the new reporting requirements.
Although aimed at publicly traded companies in the U.S., the new requirements mandating beefed-up internal corporate controls also apply to foreign companies that have a U.S. stock-exchange listing, the Wall Street Journal reported.
PricewaterhouseCoopers's U.K. affiliate planned yesterday to release results for the year ended June 30, 2004, that show an 8 percent increase in revenue from assurance services, which include audit and consulting work related to internal corporate controls and corporate governance, the Journal reported.
The company attributes nearly half of the increase to work related to Sarbanes-Oxley, as well as Europe's planned conversion next year to international accounting standards, Kieran Poynter, PricewaterhouseCoopers U.K. chairman, told the Journal.
In its most recent fiscal year, PricewaterhouseCoopers saw total revenue increase 4% to £1.56 billion (€2.24 billion or $2.87 billion), while profit before disbursements to partners rose 1.6% to £384 million, the Journal reported.
In the case of Ernst & Young's U.K. affiliate, income related to business assurance services was up about 16 percent for the fiscal year that ended June 30, 2004, due mostly to Sarbanes-Oxley related work.
"It's a key driver of the increase," Nick Pasricha, managing partner of Ernst & Young in the U.K., told the Journal.
Overall fee income at Ernst & Young in the U.K. rose 2 percent to £828 million in the year ended June 30, 2004, while profit before disbursements to partners rose 6% to £198 million, the Journal reported.