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Key Facts and Trends in the Accountancy Profession 2005

Contents

The Financial Reporting Council Aldwych House 71-91 Aldwych London WC2B 4HN Telephone 020 7492 2300 E-mail [email protected]

Chairman's Foreword

This is the third edition of ‘Key Facts and Trends in the Accountancy Profession', which was originally published by the Review Board of the Accountancy Foundation and is now published by the Professional Oversight Board for Accountancy (POBA) as part of the enlarged Financial Reporting Council (FRC).

Regulatory oversight of the accountancy profession transferred from the Accountancy Foundation and the Review Board to the FRC in the first part of 2004. The FRC is the unified independent regulator for the accounting and audit profession and for accounting and auditing standard setting and enforcement. Within the FRC, POBA is the operating body responsible for:

  • independent oversight of the regulation of the auditing profession by the recognised supervisory and qualifying bodies
  • monitoring of the quality of the auditing function in relation to economically significant entities
  • independent oversight of the regulation of the accountancy profession by the professional accountancy bodies.

There is more information on the FRC and its operating bodies at www.frc.org.uk .

For the most part the information we are publishing is comparable to that published in the previous edition. However, we have restructured some of the information on the six chartered accountancy bodies. And, in the light of the specific remit of POBA in relation to audit, we have also included some information on the major audit firms and on the numbers of registered audit firms.

The information we are publishing illustrates the underlying health and importance of the accountancy profession in the UK, with the overall numbers of students and members continuing to grow.

We would welcome comments on what information you think is more or less useful, and what else we might include in such a publication. Your comments should be sent to John Grewe [email protected] .

Sir John Bourn Chairman of the Professional Oversight Board for Accountancy February 2005

Introduction

This document provides statistical information on

  • members of the six chartered accountancy bodies
  • students of the six bodies
  • the income and staffing of the six bodies
  • the fee income of the largest UK audit firms
  • numbers and size of audit registered firms

2Whilst we draw out the main features and trends, the purpose of this document is not to offer explanations or interpretations of the picture we paint, other than to refer to possible limitations of the data.

3The information on accountancy bodies relates to the six chartered accountancy bodies1 who are members of the Consultative Committee of Accountancy Bodies (CCAB). What they have in common is that they all have a Royal Charter and thus the titles their members use - "Chartered Accountant”, “Chartered Certified Accountant”, “Chartered Management Accountant" and "Chartered Public Finance Accountant" - are protected.

4It would be misleading, however, to equate those bodies with the accountancy profession in the UK in the wide sense of that term. There are also a number of other UK bodies whose members provide accountancy and related services, and which set regulatory requirements for their members. These include for example the Association of International Accountants (AIA), the Institute of Financial Accountants and the Association of Accounting Technicians. Such accountancy bodies should also look closely at POBA recommendations which are relevant to their circumstances.

5It may also be helpful to note POBA's role in relation to company audit work, which is subject to statutory regulation. POBA is likely to be designated shortly by the Government to recognise and oversee the work of accountancy bodies in issuing a recognised audit qualification and in supervising registered audit firms. The bodies recognised at present are (for audit qualification) the ACCA, ICAEW, ICAI, ICAS and the AIA; and (for the supervision of auditors) the first four and the Association of Authorised Public Accountants.

Main Highlights

The Six Chartered Accountancy Bodies 1998-2003

  • Accountancy continues to flourish and grow in the UK. The six chartered bodies have over 250,000 members and around 140,000 students in the UK and the Republic of Ireland. (Table 1 and Chart 1, and Table 8)
  • The six bodies have almost 330,000 members and some 320,000 students worldwide. (Table 2 and Chart 2, and Table 7)
  • Student numbers have been growing more quickly (5.8% per year worldwide) than membership - 4.1% per year worldwide, 3.5% in the UK and ROI (Tables 1 and 2 and Table 7)
  • There are significant differences between the bodies in terms of overall numbers, numbers of overseas members, growth in the numbers of members and students, and age profile.
  • There is a steadily rising proportion of female members since 1998 – from 21% to 27% - and of female students – from 46% to 49% (Charts 3 and 12)

The Audit Firms

  • There has been a significant decline in the last two years in the proportion of “Big 4” fee income from the provision of non-audit services to audit clients, offset by an increase in the provision of non-audit services to non-audit clients (Chart 16).
  • There has been some decline in the numbers of firms registered to carry out statutory audit in the UK. Changes to the audit thresholds may be an underlying factor (Table 17).

Members of the Chartered Accountancy Bodies

Members in the UK and the Republic of Ireland, 1998-2003

Table 1 shows the number of members of each of the six chartered accountancy bodies in the UK and the Republic of Ireland, as at the end of each year for the period 1998 to 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
39,406 38,014 13,061 99,691 9,758 12,362 212,292
41,995 40,137 13,143 101,748 10,269 12,561 219,853
45,392 42,717 13,176 103,478 10,721 12,857 228,341
49,085 44,979 13,192 105,804 11,196 12,870 237,126
52,678 46,820 13,213 108,157 11,840 13,004 245,712
54,209 48,986 13,223 110,468 12,186 13,312 252,384
% growth (98-03) 37.6 28.9 1.2 10.8 24.9 7.7
% compound annual growth (98-03) 6.6 5.2 0.2 2.1 4.5 1.5

Table 1

  • The total number of members of the six bodies in the UK and ROI has grown steadily in recent years, by a compound average of 3.5%, from just over 212,000 in 1998 to over 252,000 at the end of 2003.
  • There are significant differences within that overall percentage, with ACCA membership in the UK and ROI growing most strongly at an average of 6.6% per year in the period, followed by CIMA and ICAI.
  • The ICAEW is the largest body in terms of its UK and ROI membership – roughly double the membership of the next largest of the bodies, the ACCA.

Note: The location of members is based on the registered address supplied to the accountancy bodies. This may be either the place of employment or the place of residence.

Chart 1: Members in the UK and Republic of Ireland 1998 - 2003

Members Worldwide, 1998-2003

Table 2 shows the number of members of each of the six chartered accountancy bodies worldwide over the period 1998 to 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
66,083 49,157 13,271 114,679 10,861 14,532 268,583
71,538 51,692 13,356 116,929 11,357 14,698 279,570
79,027 54,934 13,396 118,771 11,828 14,888 292,844
86,929 57,616 13,471 121,356 12,515 15,042 306,929
95,416 59,782 13,521 123,719 13,039 15,166 320,643
98,293 62,361 13,510 125,643 13,551 15,479 329,108
% growth (98-03) 48.7 26.9 1.8 9.6 24.8 6.5
comprising UK/ROI 22.4 22.3 1.2 9.9 22.4 6.5
overseas 26.3 4.6 0.6 -0.3 2.4 0.0
% compound annual growth (98-03) 8.3 4.9 0.4 1.9 4.5 1.3
  • The total number of members of the six bodies worldwide has grown on average more quickly than UK/ROI membership alone (4.1% as against 3.5% compound annual growth)
  • This reflects the strong growth of the ACCA globally, which has 45% of members outside UK/ROI and grew its overall membership by 8.3% a year (6.6% UK/ROI alone). The growth in members outside the UK/ROI accounted for slightly more than half of the ACCA's overall growth in this period.
  • The other bodies have a much smaller percentage of their members based overseas (see Table 3). Most of their growth therefore has come from the increases in their UK/ROI membership.

Note: The location of members is based on the registered address supplied to the accountancy bodies. This may be either the place of employment or the place of residence.

Chart 2: Members Worldwide 1998 - 2003

Members outside the UK and the Republic of Ireland, 1998-2003

Table 3 shows the number of members of each of the six chartered accountancy bodies outside the UK and the Republic of Ireland over the period 1998 to 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
26,677 11,143 210 14,988 1,103 2,170 56,291
29,543 11,555 213 15,181 1,088 2,137 59,717
33,635 12,217 220 15,293 1,107 2,031 64,503
37,844 12,637 279 15,552 1,319 2,172 69,803
42,738 12,962 308 15,562 1,199 2,162 74,931
44,084 13,375 287 14,573 1,365 2,167 75,851
% of total members outside UK/ROI 44.8 21.4 2.1 11.6 10.1 14.0

Table 3

  • ACCA has increased its membership outside UK/ROI by 65% since 1998, increasing the percentage of overseas members from 40% to 45% in that period.
  • Apart from the ACCA, only CIMA has more than 20% of its members based outside UK/ROΙ.

Note: The location of members is based on the registered address supplied to the accountancy bodies. This may be either the place of employment or the place of residence.

Sectoral employment of members, worldwide, 2003

Table 4 shows the percentages of members of each of the six chartered accountancy bodies worldwide, according to their sectoral employment at the end of 2003.

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
Public practice 28.1 1.9 - 23.8 33.6 26.9 20.5
Industry and commerce 54.0 64.9 Note 1 60.6 58.4 45.3 56.1
Public sector 9.1 15.8 69.9 Note 2 Note 2 Note 2 8.6
Retired 4.3 10.2 20.2 11.5 5.0 19.2 9.6
Other 4.5 7.2 9.9 4.1 3.0 8.6 5.2
TOTAL 100 100 100 100 100 100 100

Table 4

  • Very few members of CIMA and CIPFA are employed in public practice; the bulk of CIMA members are employed in industry and commerce and the bulk of CIPFA members in the public sector.
  • There are almost three times as many members of the six bodies employed in industry and commerce as in public practice, which includes audit.

Notes: There are variations in the way in which the bodies classify employment.

  1. CIPFA does not separately identify those employed in industry and commerce. They are included under "Other".
  2. ICAEW, ICAS and ICAI do not separately identify those employed in the public sector. They are included under "Industry & Commerce”.
  3. "Other" includes those members who are unemployed, taking a career break, undertaking full time study or on maternity leave, and others who are unclassified, for example because they have not provided the information.

Gender of members, 1998-2003

Table 5 shows the percentage of female members of each of the six chartered accountancy bodies worldwide over the period 1998 to 2003:

ACCA % CIMA % CIPFA % ICAEW % ICAI % ICAS % TOTAL %
1998 29 18 22 17 - 19 21
1999 31 19 22 18 - 20 22
2000 33 21 23 19 23 20 24
2001 35 22 24 19 25 21 24
2002 36 23 24 20 24 22 25
2003 38 24 25 21 27 23 27

Table 5

  • The percentage of female members of all six bodies has been rising in recent years.
  • Taking all the bodies together the percentage of female members has risen from 21% in 1998 to 27% as at the end of 2003.
  • The percentage of female members is within a relatively narrow range for 5 of the 6 bodies – from 21% to 27% in 2003. The exception is the ACCA which has 38% female members.

Note: ICAI did not analyse its members by gender before 2000

Chart 3: Percentage of Female Members All Bodies Worldwide 1998 to 2003

Age of members: 2003

Table 6 shows the number of members of each of the six chartered accountancy bodies worldwide by age range for 2003. Chart 4 shows this information in a graphic format. Charts 5 to 10 compare the age distribution for each body for 1997 and 2003.

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
under 25 408 43 5 182 65 95 798
25-34 33,345 13,052 1,613 26,454 4,598 3,368 82,700
35-44 34,832 21,946 4,124 35,920 4,501 3,762 105,085
45-54 17,161 14,070 3,750 27,979 2,435 3,321 68,716
55-64 7,750 7,517 2,505 19,473 1,122 2,363 40,730
65 and over 4,797 5,734 1,513 15,635 830 2,570 31,079
TOTAL 98,293 62,361 13,510 125,643 13,551 15,479 329,108

Table 6

  • There are marked differences in the age profile of members of the six bodies. For example, the ACCA and ICAI have the youngest population of members - roughly 70% of members are below 45. The corresponding figure for CIPFA is 43%, for the ICAEW and ICAS roughly 50%, and for CIMA 55% (Chart 4).
  • There are variations in the change of age profile of the different bodies between 1997 and 2003. For example, the age profile of ACCA members has reduced somewhat overall – the percentage of members below 45 has increased from 68% to 70% (Chart 5). On the other hand the age profile of CIPFA members has increased, with the percentage below 45 declining from around 50% to 43% over that period (Chart 7).

Note: This data was not collected by ICAEW or ICAI before 2000.

Chart 4: Comparison of Age Profiles of Members of the Accountancy Bodies 2003

Age of Members of the six Chartered Accountancy Bodies, 1997 and 2003

The following charts compare the age distribution of members of the bodies for 1997 and 2003. Note: The information is not available in respect of the ICAEW and ICAI for 1997

Chart 5: Age of ACCA Members 1997 and 2003

Chart 6: Age of CIMA Members 1997 and 2003

Chart 7: Age of CIPFA Members 1997 and 2003

Chart 8: Age of ICAEW Members 2003

Chart 9: Age of ICAI Members 2003

Chart 10: Age of ICAS Members 1997 and 2003

Students of the Accountancy Bodies

Students registered worldwide, 1998-2003

Table 7 shows the number of students of each of the six chartered accountancy bodies registered worldwide over the period 1998 to 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
156,299 67,320 2,086 11,720 2,600 1,252 241,277
167,668 71,203 2,079 11,585 2,667 1,235 256,437
174,201 73,761 2,213 10,727 2,789 1,652 265,343
185,392 75,263 2,322 10,114 3,008 2,080 278,179
205,099 77,923 2,412 9,648 3,392 2,327 300,801
221,261 81,590 2,707 8,694 3,000 2,431 319,683
% growth (98-03) 41.6 21.2 29.8 -25.8 15.4 94.2
% compound annual growth (98-03) 7.2 3.9 5.4 -4.7 2.9 14.2

Table 7

  • There are wide differences in the numbers and rates of growth in the student membership worldwide of the accountancy bodies.
  • The most rapidly growing accountancy bodies in percentage terms of worldwide student numbers, from a 1998 base, are ICAS and the ACCA.
  • However, the figures for the different bodies are not all strictly comparable. The ACCA figure includes affiliates and CIMA includes those who have passed their final examinations but not yet been admitted into membership. The figures for ICAEW, ICAS and ICAI refer to the number of students in registered training contracts.
  • Student numbers for the ICAEW have declined every year since 1998.

Location of students, 2003

Table 8 shows the location (UK, Republic of Ireland and the rest of the world) of students of the six chartered accountancy bodies for 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
UK & Republic of Ireland 67,665 56,126 2,683 8,406 3,000 2,425
Rest of the world 153,596 25,464 24 288 - 6
TOTAL 221,261 81,590 2,707 8,694 3,000 2,431

Table 8

  • The overwhelming majority (97% or more) of students of four of the bodies - CIPFA, ICAEW, ICAI and ICAS are based in the UK and the ROI.
  • Some two thirds of ACCA students and one third of CIMA students are based outside the UK and the ROI.
  • ACCA has a significantly higher proportion of students outside the UK and the ROI (69.4%) than the proportion of members outside UK and the ROI (44.8% - see Table 3).

Note: The location of students is based on the registered address supplied to the accountancy bodies. This may be either the place of employment or the place of residence.

Age of Students of the six Chartered Accountancy Bodies, 2003

This chart compares the age distributions for the 6 chartered accountancy bodies.

Chart 11: Comparison of Age Profiles of Students of the Accountancy Bodies 2003

  • CIPFA and CIMA have more mature students than the other bodies. 17% of CIMA students are under 25 and 39% over 35. 19% of CIPFA students are under 25 and 26% over 35. By way of contrast 80% of ICAEW students are under 25 and only 1% over 35.

Notes

  1. ICAI figures are for 2002. They note that the average age of students as at the end of 2003 was 25.
  2. ACCA and ICAEW figures relate to the age of the student intake, not the student body.

Sectoral employment of students worldwide, 2003

Table 9 shows the sectoral employment of students of each of the accountancy bodies worldwide for 2003:

ACCA CIMA¹ CIPFA³ ICAEW² ICAI² ICAS² TOTAL
Public practice 62,660 - - 8,503 2,910 2,338
Industry and commerce 112,435 - - 191 90 55
Public sector 39,902 - 2,386 - - -
Other? 6264 321 - - - 38
TOTAL 221,261 81,590 2,707 8,694 3,000 2,431

Table 9

  • Almost all the student members of ICAEW, ICAS and ICAI are employed in public practice.
  • Most CIPFA students are employed in the public sector.
  • ACCA students are more widely spread across the different sectors of the profession with roughly 30% in public practice, 50% in industry and commerce and 20% in the public sector.

Notes:

  1. No information was available on the Sectoral employment of CIMA students.
  2. ICAEW, ICAS and ICAI give a combined figure for students employed in industry and commerce and the public sector. For the purposes of the table these are simply shown as 'industry and commerce'.
  3. CIPFA does not separately identify students employed in public practice and they are included under 'Other'.
  4. 'Other' includes students not in employment.

Gender of students, 1998-2003

Table 10 and Chart 12 on the following page show the percentage of female students of each of the accountancy bodies worldwide over the period 1998 to 2003:

ACCA % CIMA % CIPFA % ICAEW % ICAI % ICAS % TOTAL
1998 49 39 44 43 49 52 46
1999 50 41 46 43 51 47 47
2000 51 42 46 45 49 46 48
2001 51 42 47 45 54 46 48
2002 51 43 50 45 52 46 49
2003 51 43 49 45 54 43 49

Table 10

  • The proportion of female students overall world-wide has increased from 46% to 49% since 1998 but has been stable since 2000.
  • The differences amongst the bodies are relatively small.

Note: ICAI and ICAS figures refer to the proportion of females in the student intake, not the total number of students

Chart 12: Percentage of Female Students All Bodies Worldwide 1998 - 2003

Graduate entrants to training with the six Chartered Accountancy Bodies

Charts 13 and 14 show the percentages of students of each body, who, at the time of registration as students, respectively (i) were graduates and (ii) held a relevant degree.

Differences in the respective educational qualifications of those entering the various training schemes are often a reflection of the selection policies adopted by different employers.

Chart 13: Percentage of Students Holding a Degree 1998 and 2003

  • ICAEW, ICAI and ICAS have a higher percentage of students with a degree than the other accountancy bodies.
  • Overall worldwide the percentage of students holding a degree increased from 49% to 55% between 1998 and 2003, largely as a result of the increasing proportion of ACCA and CIMA students holding a degree.

Percentage of students holding a relevant degree 1998 and 2003

Chart 14: Percentage of students holding a relevant degree 1998 and 2003

  • Comparisons are difficult to make, because the accountancy bodies use different definitions of a “relevant degree” (see notes below)
  • ICAI has more students with a relevant degree than the other accountancy bodies.
  • The decrease in the percentage of ICAS students with a relevant degree in part reflects the increase in students from offices in England, which are more likely to recruit graduates from a wider range of disciplines.

Notes to Charts 13 and 14

  1. The figures are based on students worldwide.
  2. ACCA, CIMA and CIPFA did not collect this data in 1998.
  3. The accountancy bodies' definitions of a "relevant degree" are as follows:

ACCA: Accountancy, Business CIMA: Business Studies, Business Administration, Finance, Accountancy CIPFA: Accountancy ICAEW: Accountancy, Business Degrees, Finance ICAI: Accountancy, Business & Commerce, Finance ICAS: Accountancy.

Pass Rates

Table 11 shows, for five of the six chartered accountancy bodies:

  • (1) the percentage of overall passes at the final examination stage for the year 2003
  • (2) the percentage of those overall passes at the final examination stage which are first time passes
% ACCA CIMA ICAEW ICAI ICAS
Percentage of overall passes 47 46 83 80 82
Percentage of overall passes which are first time passes 59 65 N/A 71 84

Table 11

  • The overall pass rate and the level of first time passes are higher for ICAI, ICAS and ICAEW (first time pass rate not available) than for the other bodies.

Notes

  1. CIPFA notes that it is no longer meaningful to provide figures in this form, as students increasingly split the subjects and this gives an artificially low pass rate
  2. Information is not generally available for overall passes at earlier stages of the examination process.

Other Information on the Six Chartered Accountancy Bodies

Income of the Six Chartered Accountancy Bodies, 2000-2003

Table 12 shows the income of each of the six chartered accountancy bodies over the period 2000 to 2003

£M ACCA CIMA CIPFA ICAEW ICAI¹ ICAS TOTAL
2000 34.9 23.0 24.8 53.8 7.6 10.7 154.8
2001 41.0 25.6 29.0 54.0 8.1 13.3 171.0
2002 46.0 27.1 32.8 44.3 10.6 13.9 174.7
2003 52.6 27.2 36.1 47.1 12.8 14.1 189.9

Table 12 Note 1: ICAI income converted from euros

Chart 15: Income of six chartered accountancy bodies 2000–2003

Note: The drop in ICAEW's income between 2001 and 2002 is due to its sale of ABG Professional Information.

Staffing of the Six Chartered Accountancy Bodies, 2000–2003

Table 13 shows the number of staff (full time equivalent) employed by the six chartered accountancy bodies over the period 2000 to 2003:

ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
2000 295 223 242 471 84 132 1447
2001 348 240 278 541 87 137 1631
2002 487 235 302 425 95 137 1680
2003 571 239 335 428 104 135 1812

Table 13

  • The total number of staff employed by the six accountancy bodies in the UK and ROI has increased by approximately 25% since 1998. Most of that increase is accounted for by ACCA and CIPFA.

Notes:

  1. Figures for ICAEW do not include staff whose employment costs are borne by the Quality Assurance Directorate, or staff whose employment costs are borne by the Chartered Accountants' Trust for Education and Research, which together total 58 staff as at the end of 2003.
  2. The drop in staff numbers for ICAEW between 2001 and 2002 is due to its sale of ABG Professional Information.

Audit Firms

Introductory Note: Major Audit Firms

Tables 14 to 16 below show fee income for many of the largest registered audit firms in the UK2. That information is analysed in Charts 16 to 18, differentiating the “Big 4” from the other large audit firms. It is ranked according to fee income from audit, not total fee income.

Some of this information is otherwise publicly available – for example those firms which have adopted LLP status must publish accounts which meet the requirements of the Limited Liability Partnerships Act 2000. Most of the information has been provided on a voluntary basis by the firms, for which we are grateful.

The tables should not be seen as league tables. Not all the firms we approached wished to disclose information on fee income or considered that they could provide reliable enough information in the desired form. It is likely therefore that there are firms not included in the tables which have a higher audit fee income than some of those which are shown. Also, we have not included accountancy firms which are not registered as statutory auditors.

One of the major policy discussions in the UK and elsewhere in the aftermath of Enron and WorldCom was the provision of non-audit services by auditors to their audit clients and the threats to auditor objectivity and independence that the provision of such services might pose. In the US, the Sarbanes-Oxley Act sets out a number of services which an audit firm is prohibited from supplying to a listed audit client. In the UK, the Auditing Practices Board has recently published the final text of new ethical standards for auditors, including on non-audit services; and there is new guidance for listed companies in the Combined Code on the role of audit committees, including in relation to the purchase of non-audit services from a company's auditors. Against that background we think that it is in the public interest to try to provide an analysis of the fee income of the large audit firms into three categories: income from audit, income from the provision of non-audit services to audit clients and income from the provision of non-audit services to non-audit clients.

This is not straightforward, however, and it would be wrong to use the tables to make a detailed comparison between firms. Whilst a number of the large firms already analyse non-audit fee income into income from audit clients and from non-audit clients, many do not do so. We are grateful, however, where firms have felt able to make an informed estimate of the likely breakdown of fee income in this way. Also, some firms do not at present separate audit fee income from income from other services closely related to the audit engagement. Firms may therefore have classified audit and non-audit income in somewhat different ways.

Key Points: Major Audit Firms

  • There has been a substantial decline in the proportion of "Big 4" fee income from the provision of non-audit services to audit clients - from 35% in 01/023 to 25% in 03/04 (Chart 16)
  • This has been offset by an increase in the proportion of “Big 4” fee income from the provision of non-audit services other than to audit clients – up from 38% to 46% (Chart 16).
  • The split of fee income of the largest audit firms outside the Big 4 has not changed significantly. On average the proportion of income from audit is slightly higher than for the Big 4, significantly lower for non-audit services to audit clients, and significantly higher for non-audit services to non-audit clients (Chart 17).

FEE INCOME OF MAJOR AUDIT FIRMS 2003-2004 (by audit fee income)

Name Business Structure No of Principals Year To Total Fee Income £m Fee Income: Audit £m Fee Income: Non-Audit Work to Audit Clients £m Fee Income: Non-Audit Work to Non-Audit Clients £m
PricewaterhouseCoopers LLP 752 30-Jun-04 1,568.0 465.0 440.0 663.0
KPMG LLP 549 30-Sep-04 1,066.0 306.0 270.0 490.0
Deloittes LLP 602 31-May-04 1,246.3 259.0 177.2 810.1
Ernst & Young LLP 391 30-Jun-04 828.0 229.0 159.0 440.0
BDO Stoy Hayward LLP 213 30-Jun-04 187.9 84.1 33.7 70.1
Grant Thornton LLP 232 30-Jun-04 234.0 58.0 41.0 135.0
Baker Tilly Partnership 261 31-Mar-04 160.0 50.0 30.0 80.0
PKF Partnership 101 31-Mar-04 110.0 46.5 30.0 33.5
Mazars LLP 78 31-Aug-04 63.5 24.8 10.1 28.6
RSM Robson Rhodes LLP LLP 93 30-Apr-04 75.2 14.1 7.3 53.9
Howarth Clark Whitehill LLP 59 31-Mar-04 35.6 13.9 12.2 9.5
Blueprint Audit Limited² Limited Company 9 30-Jun-04 10.0 10.0 0.0 0.0
Bentley Jennison Partnership 56 31-Dec-04 38.1 9.5 6.5 22.1
Chantrey Vellacott DFK Partnership 50 30-Jun-04 19.9 7.5 2.5 10.0
UHY Hacker Young Group of partnerships 67 30-Apr-04 24.0 6.9 2.8 14.3
Kingston Smith Partnership 42 30-Apr-04 20.3 6.5 5.3 8.5
Cooper Parry LLP LLP 20 30-Apr-04 11.3 3.8 3.2 4.4
Solomon Hare LLP LLP 22 31-Mar-04 14.8 2.7 2.7 9.3

Table 14

  1. See the introductory note on page 38 for the limitations on the information in Tables 14 to 16.
  2. Blueprint Audit Ltd is wholly owned and controlled by registered auditors. It undertakes only audit work requiring Registered Auditor status. Tenon Group plc is a separate company that provides professional resources and certain services to Blueprint Audit Ltd under the terms of a formal agreement on an arm's length basis. The figure of £10m is pro rata on income of £15m for the 18 months to 30 June 2004.

FEE INCOME OF MAJOR AUDIT FIRMS 2002-2003 (by audit fee income)

Name Year To Total Fee Income £m Fee Income: Audit £m Fee Income: Non-Audit Work to Audit Clients £m Fee Income: Non-Audit Work to Non-Audit Clients £m
PricewaterhouseCoopers 30-Jun-03 1,505.0 453.0 480.0 572.0
KPMG 30-Sep-03 1,008.0 291.0 282.0 435.0
Deloittes 31-May-03 1,187.9 260.0 211.9 716.0
Ernst & Young 30-Jun-03 812.0 226.0 197.0 389.0
BDO Stoy Hayward 30-Jun-03 169.4 82.2 37.1 50.1
Grant Thornton 30-Jun-03 216.0 58.0 37.0 121.0
Baker Tilly 31-Mar-03 150.0 59.0 35.0 56.0
PKF 31-Mar-03 107.4 45.6 29.6 32.2
Mazars 31-Aug-03 60.8 23.5 10.9 26.3
RSM Robson Rhodes LLP 30-Apr-03 65.8 10.0 5.8 50.1
Howarth Clark Whitehill 31-Mar-03 N/A N/A N/A N/A
Blueprint Audit Limited 30-Dec-03 10.0 10.0 0.0 0.0
Bentley Jennison 31-Dec-03 27.0 6.0 4.0 17.0
Chantrey Vellacott DFK 30-Jun-03 19.0 7.1 2.4 9.5
UHY Hacker Young 30-Apr-03 22.5 6.5 2.6 13.4
Kingston Smith 30-Apr-03 20.0 6.6 5.4 8.0
Cooper Parry LLP 30-Apr-03 10.4 4.0 3.1 3.4
Solomon Hare LLP 31-Mar-03 15.5 2.7 4.4 8.4

Table 15

FEE INCOME OF MAJOR AUDIT FIRMS 2001-2002 (by audit fee income)

Name Year To Total Fee Income £m Fee Income: Audit £m Fee Income: Non-Audit Work to Audit Clients £m Fee Income: Non-Audit Work to Non-Audit Clients £m
PricewaterhouseCoopers 30-Jun-02 1,613.0 431.0 585.0 597.0
KPMG 30-Sep-02 1,018.0 267.0 368.0 383.0
Deloittes 31-May-03 N/A N/A N/A N/A
Ernst & Young 30-Jun-02 755.0 211.0 232.0 312.0
BDO Stoy Hayward 30-Jun-02 194.0 95.1 37.8 61.1
Grant Thornton 30-Jun-02 201.0 53.0 34.0 114.0
Baker Tilly 31-Mar-02 150.0 56.0 34.0 60.0
PKF 31-Mar-02 N/A N/A N/A N/A
Mazars 31-Aug-02 59.7 22.6 8.1 28.9
RSM Robson Rhodes LLP 30-Apr-02 57.0 10.5 4.3 42.2
Howarth Clark Whitehill 31-Mar-02 N/A N/A N/A N/A
Blueprint Audit Limited 30-Dec-02 10.0 10.0 0.0 0.0
Bentley Jennison 31-Dec-02 24.4 5.0 3.6 15.8
Chantrey Vellacott DFK 30-Jun-02 18.8 7.0 2.3 9.5
UHY Hacker Young 30-Apr-02 19.3 6.0 2.6 10.7
Kingston Smith 30-Apr-02 18.0 6.3 4.9 6.8
Cooper Parry LLP 30-Apr-02 10.1 4.0 3.1 2.9
Solomon Hare LLP 31-Mar-02 16.9 N/A N/A N/A

Table 16

Big Four Firms

Chart 16: Big 4 Fee Income Percentages

Chart 17: Big 4 Fee Income £M

Non Big 4 Large Audit Firms

Chart 18: Non Big 4 Large Audit Firms Fee Income Percentages

NUMBER OF AUDIT FIRMS REGISTERED WITH RECOGNISED SUPERVISORY BODIES

No of principals¹ ICAEW ICAS ICAI No of principals¹ ACCA TOTAL
1 3,800 220 693 1 1,988
2-3 1,674 124 271 2-3 689
4-6 581 59 59 4-6 160
7-10 163 13 13 7-10 31
11-20 78 6 3 10+ 12
21-50 25 1 6
51+ 15 0 1
as at 30.9.04 2,880
as at 31.12.03 6,336 423 1,046 3,083 10,888
as at 31.12.02 6,478 453 1,044 3,112 11,087
as at 31.12.01 6,671 482 1,044 2,975 11,172

Table 17

  • The statistics illustrate the continuing importance of sole practitioners and small firms to the provision of audit and accounting services in the UK and ROI.
  • The statistics point to a modest decline in the number of registered audit firms, other than those registered with the ICAI.
  • It is likely that changes in the audit exemption threshold are one factor underlying this trend. (In July 2000 the audit exemption threshold increased from £350,000 to £1 million; and in January 2004 to £5.6 million for annual accounts in respect of financial years ending on or after 31 March 2004.)

Note

  1. Principals = partners in a partnership; members in an LLP; directors in a company.

Table 18 analyses fee income of audit firms registered with the ICAEW by size. Chart 19 shows the same information as the percentage of total fee income of all the firms registered for audit purposes with the ICAEW.

Firms ranked by size Average Total Fee Income £'000 Fee Income Per Partner £'000
1 to 4 995,247 1,693
5 to 10 113,956 1,171
11 to 30 14,170 498
31 to 100 5,777 419
101 to 500 1,982 336
501 to 1000 879 256
1001 to 2000 448 211
2001 to 3000 226 155
3000 to 4000 121 103
4001 to 5000 58 54
5001 to 5507 17 15

Table 18

Chart 19 presents the data in Table 18 in a different way. It does not paint a complete picture in that it relates solely to audit firms registered with the ICAEW – that is it does not include firms registered with ACCA, ICAS or ICAI, nor does it include firms not registered to carry out statutory audits. Nevertheless, if those limitations are borne in mind, it provides a useful indicator of concentration in audit and parts of the wider accountancy sector.

Chart 19: Percentage of Total Fee Income of Audit Firms Registered with ICAEW

  • Over half of the total fee income for audit and other services earned by ICAEW audit registered firms is earned by the largest 4 firms.
  • Over 70% of the fee income is earned by the largest 100 firms.

Note. The total number of firms is not directly comparable with the information on ICAEW registered firms in Table 17. Firms are not included in this chart which either have no fee income or have not yet submitted their first annual return.

FRC PROFESSIONAL OVERSIGHT BOARD FOR ACCOUNTANCY

5TH FLOOR ALDWYCH HOUSE 71-91 ALDWYCH LONDON WC2B 4HN TEL: +44 (0)20 7492 2300 FAX: +44 (0)20 7492 2301 WEBSITE: www.frc.org.uk

  1. Association of Chartered Certified Accountants (ACCA) Chartered Institute of Management Accountants (CIMA) Chartered Institute of Public Finance and Accountancy (CIPFA) Institute of Chartered Accountants in England and Wales (ICAEW) Institute of Chartered Accountants in Ireland (ICAI) Institute of Chartered Accountants of Scotland (ICAS) ↩

  2. It does not include any firms registered with the ICAI. ↩

  3. figures for 2001/02 exclude Deloittes, since information in the required form is not available. ↩

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Name Key Facts and Trends in the Accountancy Profession 2005
Publication date 27 September 2023
Type Report
Format PDF, 171.0 KB
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