This report examines the UK market for accountancy and related services.
Four broad sectors are covered: audit and accounting (called business assurance by the major accountancy firms); taxation and legal services; corporate finance and business recovery; and management consultancy.Key Note estimates that the total UK market for accountancy and related services increased in value by 10.7% in 2005, to £17.73bn, and sales are forecast to grow by almost 10% in 2006.
For accountants, the years 2005 and 2006 may well prove to be the best years of the first decade of the 21st century.
Growth is being driven by factors such as changing accounting rules for listed companies, changes to taxation legislation, an increase in the volume of regulations governing limited companies and a boom in activity in the City of London (mergers, flotations, private equity deals, etc.), all of which have boosted demand for the services of accountants.The UK accountancy market is dominated by four global accountancy firms (the `Big Four'), which audit almost all of the top 100 public limited companies (PLCs) and most of the top 350 PLCs.
Beyond the `Big Four', there are many `mid-tier' accountants, including some very substantial firms, which are showing increased confidence in their ability to win large contracts.Issues of current concern to the accountancy sector include auditor liability, increasing regulation of public companies and accountancy firms, international accounting standards, skill shortages and the dominant position of the `Big Four' accountancy firms.
Another issue is the future institutional structure of the profession.
The major professional bodies in the accountancy sector have not always been very adept at working with each other, seeing each other as rivals for membership, rather than partners in a profession that needs to be heard in the portals of Whitehall and Brussels.
In November 2005, a proposed merger between two of these organisations collapsed, and in July 2006 the Chief Executive of the UK's leading accountancy institution, the Institute of Chartered Accountants in England and Wales (ICAEW), announced his resignation.
Whoever succeeds him will be responsible for helping to shape the future of the profession.Key Note forecasts continued strong growth in income from accountancy and related services in 2006 and 2007.
Thereafter, the market is likely to grow at a slightly slower, though still very robust, rate.
Few accountants are likely to go out of business.
This really is a strong sector.