Financial Auditing Professional Services Market Size, Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Italy, Russia, Spain, China, India, Japan, Australia, Brazil, Mexico, GCC, South Africa), Growth Potential, Competitive Market Share & Forecast, 2019 – 2025
Report ID: GMI4203
Financial Auditing Professional Services Market size is predicted to rise exponentially driven by rising need for capital market transparency and government initiatives, mandating the use of financial auditing among enterprises. Financial auditing preserves transparency and improves the functioning of capital markets by providing investors with confidence in a company’s reported financial information. Earlier, auditing was limited to simple financial record keeping and estimation of accounts, which caused misreporting, frauds, and manipulation of important financial figures. However, over the past two decades, financial audits gained more importance due to the growing need for more streamlined and efficient technique of reporting and presenting the financial information among enterprises. This encouraged the adoption of financial auditing professional services to avoid any failures in financial irregularities. Also, after major corporate scandals such as Enron and Lehmann Brothers, most enterprises, especially publicly traded firms, were mandated by the government laws to use audit services. The growing incidences of corporate frauds and tax theft have further given rise to the requirement of financial auditing services among public firms.
With the rapid growth of economy over the last decade, enterprises have witnessed a significant expansion in their size of operations. As globalization is increasing, the organization started to enter into a new geographical market to cater to the growing demand of customers. As the organizations expand, their financial data also increases, and the reporting of financials become more complex. To address these challenges, the organizations are opting for financial auditing professional services to gain transparency in reporting and reducing the risks of financial fraud.
The external audit segment holds the major market share due to legal mandate and higher credibility of external auditors over internal auditors. The external audit is obligatory for every organization or every separate legal entity. As external auditors do not have vested interests in an enterprise, verification of audits by external firms provides better confidence to shareholders. Also, external auditors are better equipped to find deficiencies in the accounting system, which an internal employee might miss. The internal audit segment is also expected to grow as enterprises conduct regular internal audits to detect misreporting, find financial frauds, and get a better view of internal financial controls, helping them to make strategic business decisions.
The BFSI segment leads the financial auditing professional services market. The organizations are more focused on reducing the operation expenditure and gaining operational efficiency as the competition among financial institutions is increasing. As a result, BFSI enterprises are outsourcing their financial auditing requirements to third-party service providers to focus on their core business competencies.
The healthcare segment is also expected to grow rapidly as regulatory compliances and pressure from healthcare investors are increasing. As per the report from the U.S. Department of Justice (DOJ) in 2014, USD 6 billion was lost by the healthcare sector due to misreporting of false claim acts by inexperienced auditors. This has encouraged the adoption of financial auditing services among healthcare institutes.
North America is the leading region in the financial auditing professional services market as the private U.S. firms are voluntarily adopting auditing services. As per September 2017 report by the American Accounting Association, the adoption rate of audit services by private MNCs in the U.S. is 26.3% higher than the global average. Also, enterprises in this region have been strictly adopting auditing services after the 2008 global recession. The presence of ‘Big Four’, Ernst & Young, KPMG, Deloitte, and Pricewaterhouse Coopers also helped the U.S. firms to adopt external audit practices and caused a rapid growth of the market in this region.
The Asia Pacific financial auditing professional services market is expected to have the highest growth. The emerging consumer markets in Asia have caused rapid expansion of MNCs in this region, ensuring minimum financial risks and maximum transparency in this competitive market. Also, Asian firms are heavily relying on Foreign Direct Investment (FDI) in the past few years. To maintain a positive image for their global investors and to comply with FDI regulations, they have aggressively switched to financial auditing professional services, fueling the market growth in this region.
Key players of the financial auditing professional services market are Deloitte, PricewaterhouseCoopers, Ernst & Young (EY), RSM International Association, Touche Tohmatsu Limited, Moore Stephens International Limited, Mazars, Grant Thornton Inc., Binder Dijker Otte (BDO), KPMG Inc., and Nexia International Limited. These firms are shifting toward providing shared service delivery, collaborating with companies specializing in digital technologies, such as analytics, BI, big data, and mobile computing. Such collaborations are complementing the core business of auditing companies, increasing their revenue generation. KPMG collaborated with IBM in 2016 to incorporate IBM Watson into their financial auditing professional services offerings. Using more than ten thousand documents, five different R&D models were used to train IBM Watson by tax professionals, achieving a success rate of 75% in predicting tax correction.
Financial Auditing Professional Services Market, By Type, 2014-2025 (USD Million)
- External Audit
- Internal Audit
Financial Auditing Professional Services Market, By Service, 2014-2025 (USD Million)
- Employee Benefit Plan Audit
- Service Organization Control (SOC) Audit
- Financial Statement Audit
- Due Diligence
Financial Auditing Professional Services Market, By End Use, 2014-2025 (USD Million)
- Retail & Consumer
- IT & Telecom
The above information has been provided for the following regions and countries:
- North America
- Asia Pacific
- Australia & New Zealand (ANZ)
- South Korea
- Latin America
- South Africa
- Binder Dijker Otte (BDO) Global
- Deloitte Touche Tohmatsu Limited
- Ernst & Young (EY)
- KPMG Inc.
- Mazars, Grant Thornton Inc
- Moore Stephens International Limited
- Nexia International Limited.
- RSM International Association
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