Big Four auditors up advisory fee incomes

The Big Four firms have increased their audit fee income by 6.5% from 2020 to 2021 despite the challenging economic climate, compared with 7.9% from 2019 to 2020, according to the Financial Reporting Council’s (FRC) Key Facts and Trends (KFAT) report.

The audit fee income for audit firms outside of the Big Four also increased, although the growth slowed to 12.5% from 2020 to 2021, compared with 20.9% from 2019 to 2020.

Additionally, fees for non-audit work to audit clients increased by 10.3% for the Big Four, compared to a reduction of 2.2% in 2020. However, non-Big Four firms saw a decrease in these fees of 6.8% in 2021, compared to an increase of 6.1% the year before.

Overall, the average audit fee income per statutory auditor/responsible individual (RI) for Big Four firms in 2021 was £2.30m compared to £1.08m for non-Big Four firms. The average for all firms with PIE clients was £1.83m, an increase of £0.15m compared to 2020.

The report also looks at trends in the audit market and found that the five largest challenger firms outside the Big Four continued to increase their share of the FTSE 250 audit market, auditing 24 companies in 2021, compared to 19 the previous year.

In addition, the report found that membership of the accountancy bodies is growing, with nearly 390,000 members in the UK and Republic of Ireland, and over 590,000 members worldwide. The number of UK accountancy students in 2021 also increased by 0.3% to 164,000.