FT'S LEX COLUMN
THE LEX COLUMN: Who accounts for the accountants?
Accountancy firms are underpinned by auditing, yet partners at big companies put themselves first
Accountancy has found the gift that just keeps on giving. More than 1,000 former partners in PwC UK have shared £100m paid out in annuities this year. Such largesse raises ticklish questions. Accountancy firms are underpinned by auditing, which companies have to pay for as a public service. Real public servants sometimes receive gold-plated pensions. But their pay is modest. You cannot say the same of accountants: profits per partner were £765,000 at PwC UK in 2018/2019.
PwC UK’s plutocratic pensioners evidently get their annuities as a kind of profit share from practices they ran before they retired. The cash stops rolling in five years after they leave. You could argue this rewards them for helping make PwC the UK’s most successful large accountancy firm. But, as any accountant knows, an annual payout may also be a liability. This, we can surmise, would be something just under £500m for PwC UK.