Auditing Services Market

Auditing Services Market Size (2022 - 2027)

The global market for auditing services, which was assessed to be worth US$217.7 billion in 2021, is anticipated to grow to US$287.2 billion by 2026, with a CAGR of 4% between 2021 and 2026.

Over the projected period, the global auditing services market is expected to rise due to increasingly authoritarian government rules surrounding financial disclosure and reporting. In addition, one of the significant trends in the Auditing Services Market has been market consolidation. As a result, many auditing firms have been purchased by major accounting firms to expand their service line or strengthen their existing auditing services.

Auditing is described as the assessment of the accuracy and dependability of financial and non-financial data, as well as the systems and processes that record and summarise such data. Audit firms provide integrated, strategic, and enlarged audit reports to address concerns and opportunities that affect a company's long-term worth.

Auditing services are independent reporting procedures that objectively evaluate a company's financial records and other financial activities to satisfy regulators, investors, directors, and managers that the financial statements are accurate. 

Shared service delivery models may enable audit firms to collaborate with companies specializing in digital technologies such as big data, analytics, machine learning, mobile computing, and business intelligence. Data analytics services are poised to emerge as new sources of revenue generation that can supplement auditing firms' core business.

Recent Developments

• KPMG International and IBM Corporation teamed in 2016 to integrate Watson cognitive computing technology into its professional services products. 
• KPMG International and Microsoft Corporation teamed in 2017 to introduce KPMG Clara. This new smart audit platform is an automated, intelligent, agile, and scalable solution that provides data and analytic capabilities in a single interface. 
• In October 2021, KPMG UK will debut KPMG Smart Customer Due Diligence (CDD). This revolutionary cloud-based technology optimizes CDD business operations to minimize the entire cost of KYC compliance, potentially saving up to 40%. 
• Mazars, a leading audit, tax, and advisory firm in the United States, announced today that John Confrey, Rachel Efthemes, Timothy Evans, Melissa Gonzalez, Benjamin Hutterer, Samuel Pizzichillo, and Stephen Saluccio had been named Partners, with effect from September 1, 2021, and Shiv Venkatraman has been named a Principal. 
• Data Solutions Kft. was bought by PricewaterhouseCoopers (PwC) Hungary Ltd. in 2018 to focus on creating new data-based products and solutions and integrating them into the existing portfolio.

Market Drivers

Growing corporate spending on financial audits and recording encourages new entrants to choose auditing services, which is propelling market expansion. Furthermore, rising demand for auditing services across various industries, such as healthcare, IT & telecommunications, BFSI, and others, to manage businesses' workflow is likely to fuel the Auditing Services Market's expansion throughout the forecast period.

Another factor projected to promote the growth of the Auditing Services Market during the forecast period is technological advancements in audit services to assist auditors in gaining actionable insights by leveraging financial numbers and graphs from organizations.

Market Restraints

Individuals' lack of awareness about financial auditing services is a significant issue projected to limit the global market's growth over the forecast period. Furthermore, another factor launched to impede the development of the Auditing Services Market over the forecast period is an increase in people's inclination for automation or artificial intelligence (AI) across various industries.

AUDITING SERVICES MARKET REPORT COVERAGE:

Market Segmentation

Auditing Services Market - By Type:

• Internal audit
• External audit

The market is bifurcated into Internal Audit and External Audit. External Audit Services is expected to increase at a 4.5 percent compound annual growth rate (CAGR) to reach US$56.7 billion by the conclusion of the analysis period. For the following five years, growth in the Internal Audit Services market has been revised to 4.8 percent CAGR. The global Auditing Services market is now dominated by this category, accounting for 18.1 percent of the total. Due to increasing companies' preference for successfully managing fraud risks, defending company interests, and promoting business performance, the internal segment is predicted to grow faster over the projection period.

Auditing Services Market - By Service:

• Operational Audits
• Financial Audits
• Advisory and Consulting
• Investigation Audit

The market is bifurcated into Operational Audits, Financial Audits, Advisory and Consulting, and Investigation Audit. In 2017, the financial statement audit segment had a market share of more than 60.0 percent. Due to strict laws governing financial audits and reporting, businesses are predicted to grow at the fastest rate over the forecast period.

Auditing Services Market - By End-Use:

• BFSI
• Government
• Manufacturing
• Healthcare
• Retail & consumer
• It & communications

The market has been segmented into BFSI, government, manufacturing, healthcare, retail & consumer, IT & communications. In 2017, the BFSI category accounted for roughly 21.0 percent of total revenue. During the projected period, the segment is expected to grow at the fastest rate.

Auditing Services Market - By Region:

• North America
• Europe
• Asia-pacific
• Latin America
• Middle East and Africa

Because of the regulatory environment, the presence of many multinational corporations, and the rising adoption of efficient internal auditing and reporting practices by companies in various regions, North America is predicted to dominate the global auditing services market in terms of revenue during 2022 - 2027.

The Americas: The Auditing Services market in the United States is expected to be worth $62.8 billion by 2020. The country currently controls 28.85 percent of the global market. Canada is expected to grow at a 3.3 percent annual rate between 2021 and 2026. During the analysis period, Latin America will grow at a CAGR of 3.2 percent.

Asia-Pacific: China is expected to reach a market size of $50.3 billion in 2027, with a CAGR of 6.7 percent from 2016 to 2026, and Japan at 2.4 percent. In India, 70% of all statutory auditors operate with one of the Big 4, indicating that smaller auditors have difficulty breaking into the upper end of the audit market. Overall, the Asia-Pacific market is expected to reach US$38.5 billion by 2026, led by countries like Australia, India, and South Korea.

Europe: Germany is expected to increase at a 3 percent compound annual growth rate (CAGR), while the rest of Europe's market will reach $50.3 billion by 2026.

Leading Company

The four largest accounting companies in the World, based on revenue, are referred to as the "Big Four." Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG) are the names of the Big Four. The Big Four also provide tax, strategy, and management consulting, valuation, market research, assurance, and legal advising services in addition to auditing services.

Key Players

• ProtivitiRSM US
• Grant Thornton International Ltd.
• Moore Stephens International Limited
• Mazars
• Nexia International Limited 
• Ernst & Young
• Deloitte
• KPMG
• PwC

Impact of COVID-19 on Global Auditing Services Market

COVID-19 has considerably sped the evolution toward a "virtual" audit. While the audit process was already transforming due to the emergence of new technology and rising investor expectations, COVID-19 has significantly accelerated the evolution toward a "virtual" audit. Uncertainty has sparked innovation, aided by the rapid economic move to digital modes of operation. With the closing of offices and the need for physical separation, auditors combine old and new technology to conduct audits remotely, from remote data extraction and analysis to inventory counts using drones. In addition, artificial Intelligence has lately been included in the auditing process.