Audit Support Services UK – Scope, Size, and Significance

The UK audit market is among the most discussed topics by accountants this year. Following the government’s announcement of introducing reforms to the market, businesses and accountants have been curious about the future of the audit industry.

Even as the government tries to implement substantial damage control, the industry reeks from failed audits, financial scandals, and an overall lack of trust in audit firms. The Big Four, known to audit all FTSE 100 firms, caused a significant blow to the market after their appalling audit failures that shook the world.

However, as much as the current scenario sounds unfavourable for auditing firms, it is, in fact, an opportunity for small and medium-sized accountancy practices. With the market reputation of the Big Four in trouble, businesses are expected to turn to smaller and lesser-known accountancy firms for their financial audit requirements.

The year 2022 is, therefore, estimated to be a favourable year for smaller accountancy firms to capitalise on the opportunity and step into the audit market. Since most practices do not have the capacity for this, audit support services would be crucial in the upcoming years.

The Big Four Dominance

Until recently, the Big Four – KPMG, EY, Deloitte, and PwC – dominated the UK audit market. In fact, they are known to account for the audits of all the companies in the FTSE 100 Index.

Statistics reveal that about 90% of the top 350 listed firms get their books signed off by the Big Four companies. They also account for 96% of the companies in the FTSE 250 Index.

A look at these companies’ revenue gives a clear idea of their dominance in the market. While most of the accounting industry suffered a blow during the global coronavirus pandemic, the Big Four accounting firms’ revenue has only increased.

With this supremacy, there was little to no scope for new players to enter the market and land significant audit jobs – until now.

The Changing World of Audit

Post the shocking audit failures and subsequent corporate scandals of Carillion, BHS, Patisserie Valerie, and Thomas Cook, there has been an atmosphere of distrust in the UK accounting and audit world.

In an attempt to break the Big Four monopoly and regulate the audit market, the UK government proposed a range of changes.

To begin with, the government proposed that companies audited by one of the Big Four will have to transfer a minority portion of the audit to a smaller ‘challenger’ accountant. Addressing the reform, the government stated, “This will improve the quality and usefulness of audit; and boost resilience, competition, and choice in the audit market.”

Second, the Financial Reporting Council (FRC) that currently regulates the audit industry in the UK is proposed to be replaced by a more powerful regulator – Audit, Reporting and Governance Authority (ARGA). A draft bill has already been issued in this regard, meaning the body may soon come into form.

The Opportunity for Smaller Accountancy Practices

The announcement of dividing an audit between a Big Four company and a smaller accountancy firm opened new doors of opportunity for accountants in the UK. Accountants can now enter the once-dominated audit industry and expand their clientele more easily than ever.

The year 2022 is estimated to be the year of small and medium-sized accountancy practices. According to IBISWorld, the market size of the accounting and auditing industry is expected to increase by 1.7% in 2022. When measured by revenue, the sector’s market size is £5.7bn this year.

The above figures indicate that although the audit world is in chaos, the industry is expected to grow considerably this year. It is, thus, an ideal time for accountants to add audit as a service to their portfolio.

Audit Support Services – The Key to Accountants’ Success

Now that we know 2022 is a good time for accountants to enter the audit market, let’s address the elephant in the room – Capacity challenges!

The accounting world is currently undergoing a huge staffing and capacity crisis. The coronavirus pandemic, the Great Resignation, and the looming recession have all played their part in making hiring and retaining staff a massive challenge for accountancy firms.

Smaller accountancy firms particularly face the worst battles in hiring talented new staff. This often leads to existing staff getting overworked and burned out, resulting in capacity challenges.

In such a scenario, adding audit as a new service to their portfolio can be challenging for accountants. However, the issue can be dealt with by outsourcing accounting audit support.

Audit support services are crafted to help accountants effortlessly step into the audit world. Audit outsourcing companies provide knowledgeable, experienced, and highly trained auditors to manage the end-to-end audits for your clients. These professionals can also guide novice accountants about the nuances of the audit world and the changing legislation and provide complete guidance to thrive in the ever-evolving accounting and audit industry.

Benefits of Audit Support Services

There are several benefits of hiring accounting audit support for small and medium-sized accountancy practices. Some of them include:

• Effective solution to staffing challenges
• Substantial cost savings
• Enhanced capacity and productivity
• Reliable, error-free audits
• Latest technology and audit software
• Faster turnaround time
• Increased profits over a period of time

Adding audit services to your portfolio with the help of reliable audit support and preparation services can facilitate a new revenue stream for your practice. Additionally, it can help accountants attract new clients and stay ahead of the competition.

Outsource Accounting Audit Support with QXAS

Lastly, let’s address the challenge of finding the right outsourcing partner for your firm. There are tons of audit support services providers in the market. But the right partner is the one that understands your firm’s requirements and tailors its services to ensure maximum success, cost savings, and profits.

QXAS, a global accounting outsourcing firm, can do just that for you. With a vast experience of 18+ years in the accounting world, we understand our clients’ specific needs and customise our solutions for their success.

QXAS specialises in end-to-end audit support and preparation services and provides dedicated staffing solutions. Our staff is extensively trained on the UK audit regulations and is up to date with the latest technology. They can seamlessly adapt to your processes and work as an extension of your team.

Why Work with QXAS?

• Dedicated staff, custom pricing, and risk-free service trial
• First GDPR compliant accounting outsourcing company in India
• ISO 9001, ISO 27001, and ISO 27701 compliant
• Leader in IAOP’s 2022 Global Outsourcing 100 List
• ACCA-approved Gold Employer

To learn more about our services, call us at +44 208-146-0808 or drop an email at [email protected]. To book a free consultation with our outsourcing expert, click here.