INDUSTRY PROFILE

Industry Insights
The global financial auditing professional services market size was valued at USD
109.21 billion in 2017. It is anticipated to progress at a CAGR of 7.4% from 2018 to
2025. Stringent regulations regarding disclosure and reporting of financial details are
projected to provide an upthrust to the market over the forecast period. With new
businesses getting established, new companies getting listed publicly, and conducting
internal audits becoming a common practice among private companies as well as
public companies, the market is poised to witness significant growth.
Enterprises, particularly large companies, are confronting growing volumes of data.
Moreover, stringent regulations, such as a mandate for listed companies to appoint an
external auditor to audit their books and publish financial figures at the end of a
financial year, are adding to the complexity. As a result, financial audit professional
service companies are opting for cloud-based infrastructure and focusing on
integrating digital technologies, such as data analytics. These technologies can
facilitate collection, analysis, and reporting of financial data. Digital technologies can
also help auditors gain actionable insights into an enterprise’s financial figures.

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The U.S. has well-established regulatory scenario. Moreover, companies based in the
U.S. are proactively adopting internal auditing policies. Resultant increase in
corporate spending on financial auditing and reporting is encouraging new auditing
companies to consider making a foray into the market, which in turn, is intensifying
the competition. In order to defend their current market share and expand their
business operations in emerging economies, particularly in Asia Pacific and Latin
America, key market players have started offering consulting services to their existing
customers and are also acquiring smaller companies.
Auditing companies are offering integrated and elaborate audit reports by adding new
performance indicators to conventional operating metrics related to production
capacity, production volumes, and operating expenses, among others. Integrated
reporting envisages combining financial and sustainability data with information
about intangible wealth that is mostly unreported so that stakeholders can gain more
comprehensive insights into company’s performance.
Comprehensive financial statement audit reports enable customers to address
operational issues and identify opportunities that can enhance performance of the
organization in long term. These reports also help businesses in making strategic
decisions related to capital allocation, operational efficiency, and business expansion.
Auditing firms are continually focusing on improving their service delivery models in
line with evolving business environment. As such, they are combining incumbent
delivery models, including shared services delivery model, offshore development
center model, offsite delivery model, and onsite delivery model, to develop new
service delivery models.
Report Coverage & Deliverables
PDF report & online dashboard will help you understand:
 Competitive benchmarking
 Historical data & forecasts
 Company revenue shares
 Regional opportunities
 Latest trends & dynamic

Type Insights
On the basis of audit type, the market has been further bifurcated into internal and
external. The external segment dominated the market in 2017 and accounted for just
over 66.0% of the overall revenue. The internal segment is likely to post a higher
CAGR over the forecast period as organizations focus on effectively managing risks
related to frauds, protecting business interests, and enhancing business performance.
Meanwhile, an internal financial audit is gradually gaining importance. Primary
function of an internal financial audit is not only to monitor and detect misreporting,
but also to conduct a detailed investigation of fraudulent activities. Such internal
analysis allows companies to accurately ascertain financial position and help
management in making strategic decisions on business expansion and diversification.
On the other hand, an external audit provides an independent, third-party assessment
on whether or not the company is complying with regulations and adhering to
generally accepted accounting principles (GAAP) while maintaining its books.
Service Insights
Based on service, the financial auditing professional services market has been
segmented into due diligence, employee benefit plan, financial statement, service
organization control (SOC), and others. The financial statement audit segment
represented the leading share of more than 60.0% in 2017. It is expected to exhibit the
highest CAGR over the forecast period due to stringent regulations governing
financial auditing and reporting by enterprises.
Apart from ensuring compliance with regulations and standards, continuous financial
audits also enable top management to track risk controls, accounting practices,
information technology (IT) systems, compliance, and business procedures of a
company on real-time basis and aid in strategic decision-making. Continuous audits
are usually technology-driven and are designed to automate real-time error detection
and data verification. Financial audit functions also help companies in managing risks
and preventing misreporting, thereby reducing vulnerability to fraud.
End-Use Insights
On the basis of end-use, the market has been divided into BFSI, government,
manufacturing, healthcare, retail & consumer, IT & telecommunication, and others.
The BFSI segment commanded approximately 21.0% of the overall revenue in 2017.
The segment is estimated to expand at the highest CAGR during the forecast period.

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Growing digitization in the sector, stringent regulatory scenario, and proactive internal
auditing practices being adopted by banks, financial institutions, and insurance
companies are supporting the dominance of the segment. The healthcare sector is also
anticipated to witness an upswing in the adoption of financial audit services in line
with the continued rollout of healthcare facilities in semi-urban and rural areas of
developing economies.
Regional Insights
North America will remain at the forefront of the global arena in terms of value
throughout the forecast horizon. Stable regulatory scenario, presence of several
multinational corporations (MNCs), and voluntary adoption of efficient internal
auditing and reporting practices by companies based in the region are contributing to
the growth of the market.
Markets in North America and Europe are relatively mature. Organizations in these
regions remain keen on complying with stringent regulations and also happen to be
early adopters of emerging best practices and technologies.
Asia Pacific is projected to emerge as the fastest-growing regional market during the
forecast period. While MNCs are expanding aggressively in Asia Pacific in order to
capitalize on rapid industrialization and flourishing consumer market, any such
expansion in new geographic markets is exposing these companies to newer risks and
regulatory scenario is evolving accordingly.
Over the last decade, several MNCs have established subsidiaries in emerging
economies, such as China and India, to cater to spiraling regional demand. In addition,
levels of foreign direct investment (FDI) have also increased substantially, as a result
of which, companies are focusing on complying with various regulations.
Financial Auditing Professional Services Market Share Insights
Key industry players operating in the market include PricewaterhouseCoopers (PwC),
Deloitte Touche Tohmatsu Limited, KPMG International, Grant Thornton
International Ltd., Ernst & Young (EY), Binder Dijker Otte (BDO) Global, Mazars,
Nexia International Limited, RSM International Association, and Moore Stephens
International Limited. All these companies are focusing on developing shared service
delivery models in order to improve their business performance and expand their
clientele.
Shared service delivery models are potentially allowing financial audit service 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 for revenue generation that can
complement core business of auditing companies.
In 2016, KPMG International partnered with IBM Corporation to integrate latter’s
Watson cognitive computing technology with its professional services offerings. In
2017, KPMG International collaborated with Microsoft Corporation to introduce
KPMG Clara, a new smart audit platform and an automated, intelligent, agile, and
scalable solution capable of providing data and analytic capabilities in a single
interface. In 2018, PricewaterhouseCoopers (PwC) Hungary Ltd. acquired Data
Solutions Kft. to focus on development of new data-based products and solutions and
integrating them with existing portfolio.