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Key Facts and Trends in the Accountancy Profession 2006 (1)

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 web update of the third edition of ‘Key Facts and Trends in the Accountancy Profession'. This document provides statistical information up to 31st December 2004 for the six chartered accountancy bodies1 who are members of the Consultative Committee of Accountancy Bodies (CCAB). It includes information for many of the largest registered audit firms in the UK2 according to fee income from audit, not total fee income, in line with the audit firms' year ends.

All members of the CCAB have a Royal Charter and thus the titles their members use are protected. It would be misleading to equate the CCAB with the accountancy profession in the UK. There are a number of other UK bodies whose members provide accountancy and related services and which set regulatory requirements for their members. These include the Association of International Accountants (AIA), the Institute of Financial Accountants (IFA) and the Association of Accounting Technicians (AAT).

This document summarises the main features and trends of the following statistical information * Members of the six chartered bodies * Students of the six chartered bodies * The income and staffing of the six chartered bodies * Fee income of the largest UK audit firms * Number and size of audit registered firms

The purpose is not to offer explanations or interpretations of the profession, other than to refer to possible limitations of the data.

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.

The information we are publishing is an update to the information published in February 2005. The statistical information for the CCAB has been updated to reflect the figures for the year ended 31st December 2004. The information included for the audit firms has not been updated as this was included within the February 2005 publication to reflect the information for 2004 in line with the individual audit firm's year ends. All information will be updated to reflect the data for 2005 during the second half of 2006.

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 Tracy Neilson ([email protected]).

Sir John Bourn Chairman of the Professional Oversight Board for Accountancy January 2006

Main Highlights

The Six Chartered Accountancy Bodies 1999-2004

  • Accountancy continues to flourish and grow in the UK. The six chartered bodies have over 255,000 members and approximately 140,000 students in the UK and the Republic of Ireland. (Table 1 and Chart 1, and Table 8)
  • The six bodies have almost 340,000 members and over 340,000 students worldwide. (Table 2 and Chart 2, and Table 7)
  • Student numbers have been growing more quickly (6% per year worldwide) than membership - 4% per year worldwide, 3.3% 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 1999 - from 22% to 27% in 2004 - and of female students – from 46% in 1999 to 48% in 2004 (Charts 3 and 12)

The Audit Firms

  • There was been a significant decline in 2003 and 2004 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 was a significant decline in the numbers of firms registered to carry out statutory audit in the UK at most of the Bodies between 2003 and 2004. 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, 1999-2004

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 1999 to 2004:

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
1999 41,995 40,137 13,143 101,748 10,269 12,561 219,853
2000 45,392 42,717 13,176 103,478 10,721 12,857 228,341
2001 49,085 44,979 13,192 105,804 11,196 12,870 237,126
2002 52,678 46,820 13,213 108,157 11,840 13,004 245,712
2003 54,209 48,986 13,223 110,468 12,186 13,312 252,384
2004 56,837 51,386 13,266 110,776 12,757 13,811 258,833
% growth (99-04) 35.3 28.0 0.9 8.9 24.2 10.0 17.7
% compound annual growth (99-04) 6.2 5.1 0.2 1.7 4.4 1.9 3.3
  • 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 3.3%, from just under 220,000 in 1999 to over 258,000 at the end of 2004.
  • There are significant differences within that overall percentage growth, with ACCA membership in the UK and ROI growing most strongly at an average of 6.2% per year in the period, followed by CIMA and ICAI. The growth pattern displayed is consistent with that seen at the end of 2003.
  • 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 1999-2004

A bar chart showing the number of members for ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS for each year from 1999 to 2004. The number of members for ACCA ranges from approx. 40,000 to 58,000, for CIMA from 40,000 to 52,000, for CIPFA around 13,000, for ICAEW from 100,000 to 112,000, for ICAI from 10,000 to 13,000, and for ICAS from 12,000 to 14,000. ICAEW consistently has the highest number of members.

Members Worldwide, 1999-2004

Table 2 shows the number of members of each of the six chartered accountancy bodies worldwide over the period 1999 to 2004:

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
1999 71,538 51,692 13,356 116,929 11,357 14,698 279,570
2000 79,027 54,934 13,396 118,771 11,828 14,888 292,844
2001 86,929 57,616 13,471 121,356 12,515 15,042 306,929
2002 95,416 59,782 13,521 123,719 13,039 15,166 320,643
2003 98,293 62,361 13,510 125,643 13,551 15,749 329,108
2004 104,613 65,053 13,499 126,597 14,193 15,931 339,886
% growth (99-04) 46.2 25.8 1.1 8.3 25.0 8.4 21.6
% compound annual growth (99-04) 7.9 4.7 0.2 1.6 4.6 1.6 4.0
  • The total number of members of the six bodies worldwide has grown on average more quickly than UK/ROI membership alone (4.0% as against 3.3% compound annual growth)
  • This reflects the strong growth of the ACCA globally, which has 31% of members outside UK/ROI and grew its overall membership by 7.9% each year (6.2% UK/ROI alone).
  • 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 1999-2004

A bar chart showing the worldwide number of members for ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS for each year from 1999 to 2004. ACCA shows strong growth from approx. 70,000 to over 100,000. ICAEW is the largest, growing from approx. 115,000 to over 125,000. CIMA grows from approx. 50,000 to 65,000. CIPFA remains stable around 13,000. ICAI and ICAS show smaller numbers, growing from 10,000-15,000 range.

Members outside the UK and the Republic of Ireland, 1999-2004

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 1999 to 2004:

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
1999 29,543 11,555 213 15,181 1,088 2,137 59,717
2000 33,635 12,217 220 15,293 1,107 2,031 64,503
2001 37,844 12,637 279 15,552 1,319 2,172 69,803
2002 42,738 12,962 308 15,562 1,199 2,162 74,931
2003 44,084 13,375 287 14,573 1,365 2,167 75,851
2004 47,776 13,667 233 15,821 1,436 2,120 81,053
% of total members outside UK/ROI 2004 46 21 2 12 10 13 24
  • ACCA has increased its membership outside UK/ROI by 62% since 1999, increasing the percentage of overseas members from 41% to 46% in that period.
  • Apart from the ACCA, only CIMA has more than 20% of its members based outside UK/ROI.

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, 2004

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 2004.

Sector ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
Public practice 28 2 0 40 34 27 22
Industry and commerce/ Public Sector 63 81 67 46 58 45 60
Retired 4 10 21 10 5 19 12
Other 5 7 12 4 3 9 7
TOTAL 100 100 100 100 100 100 100
  • 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.

Note: There are variations in the way in which the bodies classify employment. 1. ICAEW, ICAS and ICAI do not separately identify those employed in the public sector. They are included under "Industry & Commerce”. 2. "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 worldwide, 1999-2004

Table 5 shows the percentage of female members of each of the six chartered accountancy bodies worldwide over the period 1999 to 2004:

Year ACCA % CIMA % CIPFA % ICAEW % ICAI % ICAS % TOTAL
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
2004 39 26 26 21 28 24 27
  • 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 22% in 1999 to 27% as at the end of 2004.
  • The percentage of female members is within a relatively narrow range for 5 of the 6 bodies – from 21% to 28% in 2004. The exception is the ACCA which has 39% female members.

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

Chart 3: Percentage of Female Members All Bodies Worldwide 1999-2004

A line chart showing the percentage of female members across all bodies worldwide from 1999 to 2004. The percentage starts around 22% in 1999 and steadily rises to approximately 27% in 2004.

Age of members worldwide: 2004

Table 6 shows the number of members of each of the six chartered accountancy bodies worldwide by age range for 2004. Chart 4 shows this information in a graphic format. Charts 5 to 10 compare the age distribution for each body for 1997 and 2004. The 2004 age profile has been compared to the profile as at 1997 as no information is available for 1998.

Age Range ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
under 25 661 65 48 197 3 55 1,029
25-34 36,827 13,726 2,142 25,819 4,903 3,539 86,956
35-44 36,514 23,029 4,093 35,912 4,702 3,831 108,081
45-54 17,694 14,572 3,741 27,922 2,549 3,409 69,887
55-64 7,970 7,806 2,133 20,533 1,179 2,426 42,047
65 and over 4,947 5,855 1,342 16,214 857 2,671 31,886
TOTAL 104,613 65,053 13,499 126,597 14,193 15,931 339,886
  • There are marked differences in the age profile of members of the six bodies. For example, the ACCA has the youngest population of members - over 70% of members of are below 45. The corresponding figure for CIPFA is 47%, for the ICAEW and the ICAS and CIMA approximately 50%, and for the ICAI 68% (Chart 4).
  • There are variations in the change of age profile of the different bodies between 1997 and 2004. The age profile of CIPFA members has increased, with the percentage of members below the age of 45 declining slightly from 50% to 47% (Chart 7). As shown in Charts 5-8 the differences in the age profile of members has not changed dramatically between 1997 and 2004.

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

Chart 4: Comparison of Age Profiles of Members of Accountancy Bodies 2004

A stacked bar chart comparing the age profiles of members for ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS in 2004. Age categories include "under 25", "25-34", "35-44", "45-54", "55-64", and "65 and over". ACCA has a larger proportion of younger members, while CIPFA and ICAS show a more even distribution across age groups.

Age of Members of the six Chartered Accountancy Bodies, 1997 and 2004

The following charts compare the age distribution of members of the bodies for 1997 and 2004. Note: The information is not available in respect of the ICAEW and the ICAI for 1997.

Chart 5: Age of ACCA Members 1997 and 2004

A bar chart comparing the age distribution of ACCA members in 1997 and 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. Both years show the largest proportion of members in the 25-34 and 35-44 age groups, with a slight shift in distribution between the two years.

Chart 6: Age of CIMA Members 1997 and 2004

A bar chart comparing the age distribution of CIMA members in 1997 and 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. Both years show the largest proportion of members in the 35-44 age group, with a similar pattern of distribution across other age ranges.

Chart 7: Age of CIPFA Members 1997 and 2004

A bar chart comparing the age distribution of CIPFA members in 1997 and 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. The largest percentages are in the 35-44 and 45-54 groups, showing a slight increase in the older age categories from 1997 to 2004.

Chart 8: Age of the ICAS members 1997 and 2004

A bar chart comparing the age distribution of ICAS members in 1997 and 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. The highest percentages are in the 25-34 and 35-44 age groups for both years.

Chart 9: Age of ICAEW members 2004

A bar chart showing the age distribution of ICAEW members in 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. The highest proportion of members falls within the 35-44 age group, followed by 25-34 and 45-54.

Chart 10: Age of ICAI members 2004

A bar chart showing the age distribution of ICAI members in 2004 across age categories: under 25, 25-34, 35-44, 45-54, 55-64, and 65 and over. The largest percentages of members are in the 25-34 and 35-44 age groups.

Students of the Accountancy Bodies

Students registered worldwide, 1999-2004

Table 7 shows the number of students of each of the six chartered accountancy bodies registered worldwide over the period 1999 to 2004:

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
1999 167,668 71,203 2,079 11,585 2,667 1,235 256,437
2000 174,201 73,761 2,213 10,727 2,789 1,652 265,343
2001 185,392 75,263 2,322 10,114 3,008 2,080 278,179
2002 205,099 77,923 2,484 9,648 3,392 2,327 300,801
2003 221,261 81,590 2,782 8,694 3,000 2,431 319,683
2004 240,741 84,868 2,954 8,910 3,167 2,497 343,137
% growth (99 - 04) 43.6 19.2 42.1 -23.1 18.7 102.2 33.8
% compound annual growth (99-04) 7.5 3.6 7.3 -5.1 3.5 15.1 6.0
  • There are wide differences in the numbers and rates of growth in the student membership worldwide of the accountancy bodies.
  • It should be noted that 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.
  • The most rapidly growing accountancy bodies in percentage terms of worldwide student numbers, from a 1999 base, are the ICAS and the ACCA, which is consistent with the prior year.
  • Table 7 shows that the student numbers for the ICAEW have been gradually declining since 1999.

Location of students, 2004

Table 8 shows the location (UK, Republic of Ireland and the rest of the world) of students of the six chartered accountancy bodies for 2004:

Region ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
UK & Republic of Ireland 73,839 57,106 2,879 8,560 3,167 2,494 148,045
Rest of the world 166,902 27,762 75 350 - 3 195,092
TOTAL 240,741 84,868 2,954 8,910 3,167 2,497 343,137
  • The overwhelming majority (96% or more) of students of four of the bodies – CIPFA, the ICAEW, the ICAI and the ICAS are based in the UK and the ROI.
  • Over two thirds of the 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 (69.3%) than the proportion of members outside UK and the ROI (46% - 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 worldwide, 2004

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

Chart 11: Comparison of Age Profiles of Students of the Accountancy Bodies 2004

A stacked bar chart comparing the age profiles of students for ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS in 2004. Age categories include "Under 25", "25-34", "35-44", and "45 and over". ICAEW shows a very high proportion of students "Under 25", while CIPFA and CIMA have more significant proportions in older age groups.

  • The chart above shows that CIPFA and CIMA have more mature students than the other bodies. 19% of CIMA students are under 25 and 26% over 35. 31% of CIPFA students are under 25 and 32% over 35. By way of contrast 80% of ICAEW members are under 25 and only 1% over 35.

Notes 1. ACCA and ICAEW figures relate to the age of the student intake, not the student body.

Sectoral employment of students worldwide, 2004

Table 9 shows the sectoral employment of students of each of the accountancy bodies worldwide for 2004:

Sector ACCA² CIMA¹ CIPFA³ ICAEW² ICAI² ICAS² TOTAL
Public practice 68,858 - - 8,221 3,040 2,443 82,562
Industry and commerce / Public Sector 165,554 - 2,611 224 127 54 168,570
Other 6,329 - 343 - - - 6,672
TOTAL 240,741 84,868 2,954 8,445 3,167 2,497 342,672
  • Almost all the student members of the ICAEW, the ICAS and the 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, 70% in industry and commerce.

Notes: 1. No information was available on the Sectoral employment of CIMA students. 2. The ACCA, the ICAEW, the ICAI and the ICAS 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 worldwide, 1999-2004

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 1999 to 2004:

Year ACCA % CIMA % CIPFA % ICAEW % ICAI % ICAS % TOTAL
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 48 45 52 46 49
2003 51 43 49 45 54 43 49
2004 50 43 50 44 54 44 48
  • The proportion of female students worldwide has increased slightly since 1999.
  • 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 1999-2004

A line chart showing the percentage of female students across all bodies worldwide from 1999 to 2004. The percentage starts around 47% in 1999 and fluctuates slightly, remaining between 47% and 49% through to 2004.

Graduate entrants to training with the Six Chartered Accountancy Bodies

Chart 13 shows 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 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 and those holding a relevant degree¹

A bar chart showing the percentage of students holding a degree and the percentage holding a relevant degree for ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS. ICAEW, ICAI, and ICAS show higher percentages of students with a degree and relevant degree compared to ACCA, CIMA, and CIPFA.

  • The ICAEW, the ICAI and the ICAS have a higher percentage of students with a degree than the other accountancy bodies.
  • Comparisons of the percentage of students holding “relevant degrees” are difficult to make, because the accountancy bodies use different definitions of a “relevant degree” (see above)

Notes 1. CIPFA figures are for 2003 as 2004 figures are not available 2. The figures are based on students worldwide 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: 1. the percentage of overall passes at the final examination stage for the year 2004 2. the percentage of those overall passes at the final examination stage which are first time passes

Item ACCA CIPFA¹ CIMA ICAEW² ICAI ICAS²
Percentage of overall passes 45 - 44 78.5 77 74
Percentage of overall passes which are first time passes 59 - 63 N/A 79 N/A
  • The percentage of overall passes is higher for the ICAI, the ICAS and the ICAEW 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. First time pass rates not available for the ICAEW and the ICAS. 3. 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, 2000-2004

Table 12 shows the income of each of the six chartered accountancy bodies over the period 2000 to 2004

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
2000 35 23 25 54 8 11 155
2001 41 26 29 54 8 13 171
2002 46 27 33 44 11 14 175
2003 56 27 36 47 13 14 190
2004 60 30 37 52 14 14 207

Note 1: ICAI income converted from Euros

Chart 15: Income of Six chartered accountancy bodies 2000–2004

A line chart showing the income (£m) of ACCA, CIMA, CIPFA, ICAEW, ICAI, and ICAS from 2000 to 2004. Most bodies show a general upward trend in income over the period. ICAEW and ACCA generally have higher incomes than the other bodies.

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, 2000–2004

Table 13 shows the number of staff (full time equivalent) employed by the six chartered accountancy bodies over the period 2000 to 2004:

Year ACCA CIMA CIPFA ICAEW ICAI ICAS TOTAL
2000 295 223 242 471 84 132 1,447
2001 348 240 278 541 87 137 1,631
2002 487 235 302 425 95 137 1,680
2003 571 239 335 428 104 135 1,812
2004 640 238 321 491 104 137 1,931
  • The total number of staff employed by the six accountancy bodies in the UK and ROI has increased by approximately 33% since 2000. Most of that increase is accounted for by ACCA and CIPFA.

Notes: 1. Figures for ICAEW 2003 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 UK3. 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 01/024 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 Limited 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
  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

Big Four Firms

Chart 16: Big 4 Fee Income Percentages

A stacked bar chart illustrating the percentages of Big 4 fee income from Non-Audit Services to Non-Audit Clients, Non-Audit Services to Audit Clients, and Audit Income for the periods 01-02, 02-03, and 03-04. Audit Income percentages remain relatively stable around 26-29%, while Non-Audit Services to Audit Clients decline and Non-Audit Services to Non-Audit Clients increase.

Chart 17: Big 4 Fee Income £M

A stacked bar chart showing the total fee income in £M for Big 4 firms, broken down into Non-Audit Services to Non-Audit Clients, Non-Audit Services to Audit Clients, and Audit Income for the periods 02-03 and 03-04. Total income rises, with Non-Audit Services to Non-Audit Clients showing the largest component.

Non Big 4 Large Audit Firms Fee Income Percentages

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

A stacked bar chart illustrating the percentages of fee income for Non-Big 4 Large Audit Firms from Income from Non-Audit Services to Non-Audit Clients, Income from Non-Audit Services to Audit Clients, and Audit Income for the periods 01-02, 02-03, and 03-04. Audit Income percentages remain stable around 32-34%, with Non-Audit Services to Non-Audit Clients being the largest component.

Number of Audit Firms Registered with Recognised Supervisory Bodies

Firm Size (Number of Principals) ICAEW ICAI ICAS ACCA TOTAL
1 3,067 702 185 1,988
2-3 1,594 267 117 689
4-6 546 55 53 160
7-10 159 14 12 31
11-20 77 3 6 12
21-50 19 6 1
51+ 13 1 0
as at 31.12.04 5,475 1,048 374
as at 30.9.04 2,880
as at 31.12.03 6,336 1,046 423 3,083 10,888
as at 31.12.02 6,478 1,044 453 3,112 11,087
as at 31.12.01 6,671 1,044 482 2,975 11,172
  • 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 decline in the number of registered audit firms. The decrease is more noticeable within the ICAEW (a fall of 16%), the ICAS (a decline of 13%) than the ACCA (7%) and the ICAI (under 1%).
  • It is clear 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). However, the fall in the number of audit firms was not as large a drop as previously anticipated by the bodies.

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

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

A bar chart showing the percentage of total fee income for audit firms registered with ICAEW, grouped by firm size (ranked). The largest firms (1 to 4) account for over 50% of the total fee income, with decreasing percentages for smaller firm size categories.

  • 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. This is because registered firms which either have not provided information on fee income or have no fee income have been excluded.

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. This does not include any firms registered with the ICAI. ↩

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

  4. 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 2006 (1)
Publication date 27 September 2023
Type Report
Format PDF, 280.3 KB
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