ERNST & Young (EY) partners in the UK saw their share of profits drop for the first time in three years as the Big Four audit firms face economic uncertainty.

Partners at the accounting firm’s UK arm pocketed an average of £761,000 (S$1.26 million) last year, compared with £803,000 the year before. The firm also cut its pay rise and bonus pool by about 30 per cent to £155 million.

EY UK recently announced it’s cutting 5 per cent of staff in its financial services division to adjust to slower demand this year. Accountants at the Big Four firms – which also include Deloitte, PricewaterhouseCoopers and KPMG – are clinging to their jobs amid economic uncertainty and a sharp drop in open roles.

EY UK’s pretax profit increased 4 per cent to £659 million in the year to June 2023, while revenue rose 16 per cent to a record £3.8 billion. Revenue growth was driven by a 20 per cent gain in its tax business and a similar rise for its consulting division.

The Big Four accounting firms are facing increased scrutiny over the quality of their audits after a series of high-profile collapses in recent years, including British construction company Carillion and cake chain Patisserie Valerie.

EY’s 2021 audit of Made.com Group, which filed for insolvency last year, is being investigated by the UK regulator, the Financial Reporting Council. The firm, which now has more than 21,000 staff in the UK, said it revamped its audit quality strategy in 2020.

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A long-awaited legislative overhaul of the UK’s audit industry is still needed, said EY UK chair Hywel Ball.

“While the profession and our UK regulator have sought to implement our own changes, the lack of primary legislation in this area continues to be a concern,” he said. BLOOMBERG