‘Hollowed’ U.K. Accounting Firms Lack Reserves for Big Claims

The major U.K. accounting firms could struggle to weather the impact of the pandemic or a big legal claim because they distribute most of their profits to their partners, leaving little money in reserve.

Accounts filed by the U.K. arms of the six biggest firms—the Big Four, BDO LLP and Grant Thornton LLP—show very low levels of equity, in some cases less than a month’s revenue.

That raises questions about their ability to pay fines that could result from some of the larger court ...