The number of firms registered to carry out statutory audit work in the UK and Ireland has dropped again and is close to dipping below the 4,000 mark.
The number of audit firms registered with the recognised supervisory bodies continues to decline, according to a new report, while the Big Four have been buoyed by a rise in UK fee income.
The Financial Reporting Council (FRC) has released the 22nd edition of its Key facts and trends report, which gives an overview of the UK accountancy and audit landscape.
It features data from 33 firms with public interest entity (PIE) clients and provides data on the profession’s demographics, including age, gender and ethnic diversity across seniority levels and firm sizes.
Memberships up, but students dip
The study found that membership of the accountancy bodies continues to grow, with the seven named in the report – the Association of Chartered Certified Accountants (ACCA), the Chartered Institute of Management Accountants (CIMA), the Chartered Institute of Public Finance and Accountancy (CIPFA), the Institute of Chartered Accountants in England and Wales (ICAEW), Chartered Accountants Ireland (CAI), the Institute of Chartered Accountants of Scotland (ICAS) and the Association of International Accountants (AIA) – having more than 405,000 members in the UK and Republic of Ireland (ROI).
ICAEW has the most members at 141,561, putting it ahead of ACCA (113,423) and CIMA (85,471).
The same seven had more than 616,000 members worldwide, with the growth in membership between 2022 and 2023 being 1.9% in the UK and ROI, and 1.7% across the globe.
The decline in student numbers seen in 2022 in the UK and ROI has continued for 2023, with the total number decreasing by 0.2% to 155,379. However, the figure increased by 0.1% worldwide compared to falls of 3.5% and 2.0% respectively last year.
In the same vein, the total number of students who became members worldwide fell by 5.9% in 2023 compared to a fall of 0.8% in 2022 and an increase of 4.5% in 2021.
Continued decline for audit
Elsewhere, the number of audit firms registered with the recognised supervisory bodies in the UK and ROI continued to decline, with the total number standing at 4,038 as at 31 December 2023, compared with 4,310 in 2022, 4,745 in 2021 and 5,007 in 2020.
However, audit fee income for the Big Four increased by 19.5% in 2023 compared with a 7.6% increase last year. Audit fee income for those outside of Deloitte, EY, KPMG and PwC also increased by 23.2% in 2023 compared with a 23.3% rise in 2023.
The Big Four also saw total UK fee income increase by 11.1% in 2023. For other firms, total fee income increased by 13.2% in 2023, which was lower than the 18.5% increase in 2022.
The report suggested this could be “partly due to the net increase of one more non-Big Four firm responding to our survey this year”.
The average audit fee income per statutory auditor or responsible individual for the Big Four in the UK in 2023 was £2.75m compared to £1.41m for other firms, with the average for all firms with PIE clients being £2.21m – an increase of 12.18% compared to 2022.
Diversity policies remain high
Meanwhile, the study found that the overall percentage of female students worldwide (56%) was greater than the overall percentage of female members (40%), with ACCA having the largest percentage of female students in 2023 at 59%.
The data also shows that across PIE audit firms, the managerial level is the most diverse, followed by directors and then partners.
As for having a diversity policy in place, 82% of the 33 audit firms who responded in 2023 did have one. This is in comparison to 83% of the 30 firms involved in the 2022 study having one as well.
Writes Matthew Ord in AccountingWeb