Accountancy

2009 UK Market Report

Publication Date	September 2009
Publisher	Key Note
Product Type	Report
Pages	67
ISBN Number	not applicable
Product Code	KEY00030

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Summary

This report looks at the market for accountancy services in the UK. Accountancy services comprise four types: audit and accounting (called business assurance by the major accountancy firms); tax and legal services; corporate finance, including business recovery; and management consultancy.

The growth in the accountancy market has slowed down appreciably as the recession begins to take its toll on UK businesses. The accountancy firms have not been immune to the problems suffered by their clients, namely rising costs, narrowing profitability and weakening markets. The growth in the market in 2008 was half that of 2007 and substantially below that of 2005 and 2006 when growth was in double figures. Tax and legal services has been the strongest sector of the market, while consultancy has been the weakest. Total audit revenues are growing but there is pressure on fee rates. Key Note estimates that the total accountancy market increased in value by 4.1% in 2008. That estimate includes an estimate for the growth in the consultancy market, in which some of the largest accountancy firms are also operating.

The accountancy market is dominated by the `Big Four' global accountancy firms, as it has been since 2002. They audit almost all the top 100 public companies along with the majority of the top 350 companies. Beyond the Big Four, there are many so-called mid-tier firms. Some of these are very sizeable and they can, at times, provide competition to the Big Four. In 2007, the Big Four firms appeared to be succeeding much better than the rest of the accountancy industry, but this no longer looks to be the case. The major accountancy firms are also experiencing a more difficult market as clients cut back on their spending, and as demand for the more sophisticated types of accountancy services falls.

The whole basis on which this profession is founded is being questioned and this will continue to be the case for the rest of 2009 and well into 2010. The collapse of some financial institutions that were scrupulously audited according to the rules of auditing has led to questions being raised over what value should be ascribed to a set of audited accounts; i.e. what should an audit be doing? Should the rules and criteria by which audits are created be changed? Is a set of accounts any guide as to how a business might perform in the future?

Several accountancy firms have faced legal action in the past and some are currently facing it. There is a worry that there might be more legal cases in the future. So legal liability is a big concern for this profession.

Key Note is forecasting a fall in the accountancy market in 2009 of 1.8% and modest growth of 4% in 2010. Thereafter, the market will grow at a faster pace. However, it may be 5 years before the market as a whole grows in double figures, i.e. 10% or more as it has done sometimes in the past.

Content

Executive Summary
1. Market Definition
- Report Coverage
- Market Sectors
- Audit And Accounting
- Tax And Legal Services
- Corporate Finance And Business Recovery
- Management Consultancy
- Market Trends
- Reduced Market Growth
- The Dominance Of The Big Four Firms Remains
- Accountancy Firms Are On The Defensive
- The Industry Is Cutting Back On Staffing
- Growth Of Forensic Accountancy
- Accountants More Vulnerable To Legal Action
- Economic Trends
- Population
- Table.1: Uk Resident Population Estimates By Sex
- Gross Domestic Product
- Table.2: Uk Gross Domestic Product At Current And
- Inflation
- Table.3: Uk Rate Of Inflation (%),-
- Unemployment
- Table.4: Actual Number Of Unemployed Persons
- Market Position
- The Uk
- Overseas
2. Market Size
- Introduction
- The Total Market
- Table.1: The Uk Market For Accountancy And Related Services By Value (??m),-
- Figure.1: The Uk Market For Accountancy And Related Services (??m),-
- Table.2: The Major Market Shares In The Uk Accountancy And Related Services Market By Size Of Firm, (%)
- By Market Sector
- Audit And Accounting
- Table.3: Audit And Accounting Fee Income (??m),
- Tax And Legal Services
- Table.4: Tax And Legal Services Fee Income (??m),-
- Corporate Finance And Business Recovery
- Table.5: Corporate Finance And Business Recovery
- Management Consultancy
- Table.6: Management Consultancy Fee Income?
3. Industry Background
- Introduction
- Number Of Companies
- Table.1: Number Of Uk Accountancy Businesses By Turnover (??000 And %),-
- Employment
- Table.2: Number Of Local Units Of Uk Accountancy Businesses By Employment Sizeband
- Regional Variations In The Marketplace
- Distribution
- How Robust Is The Market?
- Legislation
- Professional Associations
- Institute Of Chartered Accountants In England And Wales
- Association Of Chartered Certified Accountants (acca)
- Chartered Institute Of Management Accountants
- Chartered Institute Of Public Finance And Accountancy
- Institute Of Chartered Accountants Of Scotland
- Institute Of Chartered Accountants Of Ireland
4. Competitor Analysis
- The Marketplace
- Table.1: The Big Four Leading Accountancy Practices By Uk Fee Income (??m),/
- The Mid-tier Firms
- Table.2: The Leading Mid-tier Uk Accountancy Practices By Fee Income (??m),/2007-2008/
- Market Leaders
- Pricewaterhousecoopers Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Deloitte & Touche Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Kpmg Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Ernst & Young Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Grant Thornton Uk Llp
- Structure
- Current And Future Developments
- Financial Results
- Bdo Stoy Hayward Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Baker Tilly
- Company Structure
- Current And Future Developments
- Financial Results
- Smith & Williamson Ltd
- Company Structure
- Current And Future Developments
- Financial Results
- Tenon Group Plc
- Company Structure
- Current And Future Developments
- Financial Results
- Pkf Llp
- Company Structure
- Current And Future Developments
- Financial Results
- Outside Suppliers
- Advertising And Promotion
5. Strengths, Weaknesses, Opportunities And Threats
- Strengths
- Weaknesses
- Opportunities
- Threats
6. Buying Behaviour
- Overview
7. Current Issues
- Auditing
- Fair Value
- Auditor Limited Liability
- Pre-packaged Administrations
- Protecting The Name Of `accountant'
8. The Global Market
- Fee Income
- Table.1: The Top Ten Accountancy Networks Ranked By Fee Income ($m),
9. Forecasts
- Introduction
- Table.1: Economic Forecasts (000, % And Million),-
- Forecasts-
- Table.2: The Forecast Uk Market For Accountancy And Related Services By Value (??m),-
- Market Growth
- Figure.1: Forecast Growth In The Uk Market For Accountancy And Related Services By Value (??m),-
- Future Trends
10. Further Sources
- Associations
- Publications
- General Sources
- Government Publications
- Other Sources
- Key Note Sources