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Accounting and Financial Management - UK - February 2017

Published By :

Mintel

Published Date : Mar 2017

Category :

Banking

No. of Pages : N/A

Consultancy will continue to represent the strongest growth potential for accountancy firms, with digital technology and data analytics expected to become an even bigger part of the consulting market. While Brexit-induced uncertainty is likely to negatively impact the market, it will also present opportunities for accountants to provide advisory services and guidance to clients in these uncertain times.

Table of Content

EXECUTIVE SUMMARY
The market
Figure 1: Segmentation of the UK market for accounting & financial management, by type of service, 2012-16
Figure 2: Forecast UK market for accounting & financial management, 2017-21
Figure 3: Forecast segmentation of the UK market for accounting & financial management, by type of service, 2017 and 2021
Market factors
Figure 4: Number of private sector businesses in the UK, 2002-16
Companies
What we think

KEY INSIGHTS
What are the implications of Brexit on the UK accountancy sector?
What are the likely implications of HMRC’s plans for “Making Tax Digital” for accountants?
How are the recently introduced audit reforms affecting mid-tier accounting firms?
How can big data analytics help drive growth for accountants?

INTRODUCTION
Definitions
Methodology
Abbreviations
Market positioning
UK economy
Overview
Figure 5: UK GDP quarterly development, 2003-16
Figure 6: UK GDP in economic downturns and recoveries since 1979
Inflation
Interest rates
House prices
Figure 7: UK House price changes, 2004-2016
Consumer spending
Manufacturing
Figure 8: UK manufacturing, 2014-16
Business investment
Figure 9: UK GFCF 2003-16
Imports
Exports

MARKET FACTORS
Key points
Legislation and government policy
CMA audit order and new EU regulatory framework on statutory audit
Impact of Brexit on EU audit reform
New audit threshold
New UK accounting standards
Large accounting firms under spotlight in clampdown on tax avoidance schemes
Measures put in place to crack down on tax avoidance
Finance Bill 2017
Companies Act shake-up
Scottish tax devolution
HMRC move towards digital tax services
Other market factors
Rise in number of active businesses as UK economic recovery becomes more robust
Figure 10: Number of private sector businesses in the UK, 2002-16
Figure 11: Number of private sector businesses in the UK, 2002-16
Figure 12: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2016
Self-employment higher than at any point over the past 40 years
Figure 13: Self-employed workers in the UK, 2005-16
Trends in insolvencies and business recovery
Figure 14: Number of company insolvencies, receiverships and administrations in England & Wales, 2006-16
Corporate credit conditions
UK M&A market remains resilient in 2016, with a weaker sterling attracting foreign investment
Brexit-induced uncertainty to potentially result in slump in M&A activity
Figure 15: Mergers and acquisitions involving UK companies, 2004-16
Number of listed companies on a downward trend
Figure 16: Number of main market and AIM listed companies, 2009-16
Figure 17: Number of main market and AIM listed companies, 2009-16

MARKET SIZE AND SEGMENTATION
Key points
Overview
Consultancy sector shows strongest growth as accountancy firms expand their service offering
Accountancy firms adopt new business models to diversify or specialise
Figure 18: The UK market for accounting & financial management, 2012-16
Figure 19: The UK market for accounting & financial management, 2011-15
Market segmentation
Overview
KPMG is top listed company auditor, PwC is top FTSE 100 auditor
Figure 20: Segmentation of the UK market for accounting & financial management, by type of service, 2012-16
Figure 21: Segmentation of the UK market for accounting & financial management, by type of service, 2012 and 2016
Audit & accounting
Rise in audit threshold putting pressure on lower end of auditing market
Audit fees at lower end of the market remain squeezed but fees are more stable at the top end
Innovative technology solutions enable auditors to deliver continually higher audit quality and deeper insight
Figure 22: UK fee income from audit & accounting services, 2012-16
Tax services
Demand for tax advisory services remains high
Implications of Making Tax Digital for accountants
Figure 23: UK fee income from tax services, 2012-16
Consultancy
Accounting firms face increased competition in consultancy services sector
Brexit-induced uncertainty sees boom in demand for consultancy services
Figure 24: UK fee income from consultancy services, 2012-16
Figure 25: UK fee income from consultancy services, 2012-16
Corporate Finance & Business Recovery
Insolvency practitioners struggle with a more robust economic recovery
Brexit could challenge UK’s leading position in cross-border restructuring
Figure 26: UK fee income from corporate finance & business recovery services, 2012-16
Overseas trade in accountancy services
Figure 27: International trade in accountancy services, 2011-15
Figure 28: Exports and imports of accountancy services, 2011-15
MARKET TRENDS & ISSUES
Key points
FTSE 250 audit market to remain preserve of the big four for the foreseeable future
Lower end of the audit market is becoming increasingly uneconomical for auditors
Accounting firms on acquisition trail to beef up consultancy arms
Increased demand for cyber security advisory services
Regulatory and risk consultancy services show strong demand growth
Buoyant M&A activity as accountancy firms look to rapidly expand consultancy capabilities
Big four tap into start-up and SME market
Cloud computing is transforming the accounting industry
‘Big Data’ and data analytics represent key growth areas for accountants
Role of content marketing and social media
Forensic accounting

INDUSTRY STRUCTURE
Key points
Industry development
Figure 29: Top 20 accounting firms in the UK, by fee income, 2016
Accounting firms are moving into legal services
Mid-tier firms are also on consolidation course
Figure 30: Analysis of the changes in the structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2012-16
Structure by employment
Figure 31: Analysis of the employment structure of the accounting, bookkeeping, auditing and tax consultancy industry, 2015 and 2016
Structure by turnover
Figure 32: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2015 and 2016
Figure 33: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2016

COMPANY PROFILES
RSM UK HOLDINGS LTD (FORMERLY BAKER TILLY UK HOLDINGS LTD)
Figure 34: Segmental turnover analysis of RSM UK Holdings, 2016
Figure 35: Financial analysis of RSM UK Holdings, 2012-16
Company strategy

BDO LLP
Figure 36: Financial analysis of BDO, 2012-16
Company strategy

DELOITTE LLP
Figure 37: Segmental turnover analysis of Deloitte, 2015
Figure 38: Financial analysis of Deloitte, 2011-15
Company strategy

ERNST & YOUNG LLP
Figure 39: Segmental turnover analysis of EY, 2016
Figure 40: Financial analysis of Ernst & Young, 2012-16
Company review and strategy

GRANT THORNTON UK LLP
Figure 41: Segmental turnover analysis of Grant Thornton, 2016
Figure 42: Financial analysis of Grant Thornton UK, 2012-16
Company strategy
Company outlook

KPMG LLP
Figure 43: Segmental revenue analysis of KPMG, 2016
Figure 44: Financial analysis of KPMG, 2012-16
Company outlook

MAZARS LLP
Figure 45: Segmental turnover analysis of Mazars, 2015
Figure 46: Financial analysis of Mazars, 2011-15
Company strategy & outlook

MOORE STEPHENS LLP
Figure 47: Segmental turnover analysis of Moore Stephens, 2016
Figure 48: Financial analysis of Moore Stephens, 2012-16
Company strategy

PRICEWATERHOUSECOOPERS LLP
Figure 49: Segmental turnover analysis of PwC, 2016
Figure 50: Financial analysis of PwC, 2012-16
Company review & strategy

SMITH AND WILLIAMSON HOLDINGS LTD
Figure 51: Financial analysis of Smith & Williamson Holdings, 2012-16
Company outlook & strategy

MARKET FORECAST
Key points
Market prospects
UK economic outlook remains positive but Brexit-related challenges ahead
Acquisitions, partnerships and alliances to continue to revolve around the technology space
Figure 52: Forecast UK market for accounting & financial management, 2017-21
Figure 53: Forecast UK market segmentation for accountancy & financial management, by type of service, 2017-21
Audit and accounting
Tax services
Consultancy
Corporate finance and business recovery
Figure 54: Forecast UK market segmentation for accounting & financial management, by type of service, 2017-21

FURTHER SOURCES & CONTACTS
Trade associations
Association of Chartered Certified Accountants (ACCA UK)
Chartered Institute of Management Accountants (CIMA UK)
Chartered Institute of Public Finance Accountancy (CIPFA)
Institute of Chartered Accountants in England and Wales (ICAEW)
Institute of Chartered Accountants Scotland (ICAS)
Trade exhibitions
Accountex 2017
CIPFA annual conference 2017
Trade magazines
Accountancy Age
Accountancy Live
Tax Advisor
Taxation
The Accountant

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