(Jan 31): KPMG expects to increase its audit fees this year as the accounting firm looks to offset higher costs from regulatory requirements and operating expenses.

“The price of audit will have to increase this year,” the firm’s UK chief executive officer Jon Holt said in an interview with Bloomberg as the firm published its annual results. “The sector is facing a number of upward cost drivers, from new audit and accounting standards to inflationary pressures.”

Clients will likely bristle at the remarks. Chief financial officers at some of the UK’s largest companies have already complained to the Big Four, as the top accounting firms are known, about the high costs of audits, arguing they shouldn’t have to pick up the tab for pay rises handed out to accountants.

KPMG UK said Tuesday revenue increased 12% to £2.72 billion (US$3.3 billion) in the year through September. The gains were fueled by a 24% increase in deal advisory and a 22% rise in consulting. Pretax profit rose 3% to £449 million, excluding disposals. Consulting will continue to be the main engine of growth in 2023, while deal advisory is expected to grow at a slower pace, Holt told Bloomberg.

Partner pay

KPMG said it paid UK partners £717,000 last year, a rise of about 4% as the firm sold more consulting and deal advice. Still, the firm’s 786 UK partners made less than rivals at Deloitte, PwC and EY.

KPMG UK said it invested £130 million into new hires and technology in 2022 as part of a push to expand the range of services it offers to clients. The firm also increased its bonus pot to over £105 million.

The firm hired over 4,500 people in the 12 months to September, and has a total of 16,036 employees on its payroll.

“Every area of the business contributed to our growth, showing the important role our multi-disciplinary model plays to support our clients,” said Jon Holt, KPMG’s UK chief executive officer.