Renewed activity will mark a turnaround from the past five years
Los Angeles, CA (PRWEB) November 22, 2012
Like most of the financial sector, the Global Accounting Services industry's revenue fell in 2009, after reaching a historical peak in 2008. The correction imposed on the industry as the financial crisis took hold proved to be only minor, according to IBISWorld industry analyst Andrew Krabeepetcharat, with accounting firms having rebounded since and hit a new historic high in 2011. Improvement is expected to continue over 2012, with revenue growing 1.9% to $361.0 billion. And over the five-year period, the contrasting growth trends is expected to keep annualized industry revenue growth at a mild 1.2%. Even greater improvement is forecast in the coming years, with revenue expected to jump 3.5% in 2013.
In addition to a falling US dollar, which will boost financials measured in US dollar terms, the upturn reflects stabilization in global economic conditions and strong performance in developing countries. This improvement will encourage clients to dust off plans for expansion and change, driving demand for accounting advisory and tax work on deals like initial public offerings (IPOs) and mergers and acquisitions (M&As). “Renewed activity will mark a turnaround from the past five years, when many businesses delayed plans and tried to cut spending and reduce debt amid economic uncertainty and difficulty accessing funding,” says Krabeepetcharat. “Work on major corporate transactions tends to be the more volatile aspect of the industry, thus strongly influencing overall industry performance.” Audit and tax preparation tend to be less volatile and, therefore, provide a relatively stable revenue base.
Global Accounting Services industry market share concentration has increased over the past five years as the larger accounting firms became more globalized. Growth for these firms was underpinned by greater economic improvement and making the most of strong development in emerging nations. Due to the need for personal bookkeeping and tax understanding by most of the developed world, the dominance of the big four is offset by the vast number of small accounting firms that serve local small businesses and individuals. The industry’s major companies include PricewaterhouseCoopers International Ltd, Deloitte Touche Tohmatsu, Ernst & Young International and KPMG International.
While the nature of work undertaken by the industry will begin to switch back to cyclical activities, such as corporate advisory work on expansions and major transactions, these activities will remain relatively depressed compared with before the financial crisis. Demand for services related to bankruptcies, liquidations and restructures will continue to be relatively strong as high levels of public and private debt constrain growth in many major economies. The next five years are forecast to show some solid growth. For more information, visit IBISWorld’s Global Accounting Services industry report page.
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IBISWorld industry Report Key Topics
Accounting firms provide a range of financial services related to accounting. These include preparation and auditing of financial statements, tax consulting and preparation of tax returns, bookkeeping, accounting systems design, and financial and business advisory services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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