Proposed industry reforms could be a big shock for the Big Four
London, United Kingdom (PRWEB) October 29, 2012
The Accounting & Auditing industry comprises two distinct service segments. Accounting services include the preparation of financial accounts and the generation of financial statements, required by law for publicly listed companies. Auditing services involve the process of externally reviewing a company's financial statements in order to guarantee their accuracy.
According to IBISWorld industry analyst Michael Grosz, “regardless of economic conditions, the statutory requirement for the submission of audited financial accounts generates regular demand for services provided under each of the two industry segments and results in a stable revenue base for the industry”. As a result, the Accounting & Auditing industry has displayed a low level of revenue volatility during the five years through 2012-13 with revenue estimated to grow at an annualised 1.7%.
Over the next five years to 2017-18, the Accounting & Auditing industry is forecast to record steady growth as the economy slowly recovers. Grosz adds, “pending regulatory reforms designed to reduce the level of concentration in the industry remain a hot topic”. Once passed, they are likely to have major implications on the industry's structure and revenue distribution. While the Big Four accounting firms are expected to lose customers due to services being split into either audit or non-audit provision to the same client, smaller companies are expected to be among the main beneficiaries.
The Accounting & Auditing industry is characterised by a medium level of market share concentration, with the largest four players accounting for 52% of industry revenue. Concentration is much higher for the auditing of large companies in the United Kingdom. The Big Four accounting firms – PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young – audit almost 99% of companies in the FTSE 100 following a constant increase in the client base from this group. While the top four firms hold considerable market share and are concentrated at the top end of the industry involving large multi-national business clients, there is a large number of small firms in the industry. Small and medium-size businesses offer accounting and financial reporting services to smaller clients across the United Kingdom.
For more information on the Accounting & Auditing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in this industry prepare and examine financial accounts and are responsible for the certification of their accuracy. The industry also includes auditing of financial accounts. However, industry operators are not responsible for bookkeeping activities which can be found in the Bookkeeping industry report and budgetary control activities which can be found in the Management Consultants industry report.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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