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Accountancy membership grows but student numbers fall

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Accountancy membership grew over the past year, with nearly 400,000 members in the UK, but the number of students fell by 3.5%.

17th Aug 2023
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The Financial Reporting Council (FRC) released the annual key trends and facts report this week, which outlines the makeup of the accountancy and audit profession. 

Audit firms also featured heavily in the report, with the watchdog highlighting that fee income for Big Four firms and non-Big Four firms increased in 2022 at a higher rate than the previous year.  

Growth in accountancy body members

The report charted the continued growth in members of the accountancy bodies. At the end of 2022, there were 397,587 members of the seven accountancy bodies. The lion's share of that figure was the 139,000 members of the ICAEW. 

The Institute was closely followed by ACCA, with its 109,625 members. Then in third place was CIMA with 85,953 members. 

Across the seven accountancy bodies, membership grew steadily by 2.1% from 2021 to 2022, which was the same growth as last year.  

Although ICAEW still commands the biggest membership, ACCA is gathering pace due to a larger number of students choosing it over the body that resides in One Moorgate Place. 

Registered members and students in the UK and ROI
FRC: Key facts and trends report 2023

The number of students falls

The total number of ACCA students for 2022 was 71,449, compared to 26,134. However, ICAEW saw a 4.5% growth in students, while ACCA saw its student numbers fall by 5%. CIMA was the second biggest student group with 43,947 members. 

However, the number of students overall fell by 3.5% in 2022 to just over 155,000. The ACCA, CIMA, CIPFA, ICAS and AIA all saw a decline in the number of students becoming members in 2022 compared to 2021. 

As for where these student members are qualifying, the report finds that 54% are employed in industry and commerce, with over three-quarters of students at ICAEW, CAI and ICAS in practice. 

The report also shows the gender balance in the profession is improving, with 50% of the students female - this number has steadily increased since 2018 when 38% of students were female. ACCA had the highest percentage of female students at 60%. 

However, this gender balance is not yet reflected in the membership of accountancy bodies - just 38% are female.

Let’s talk money

The section of the report that would probably be of most interest to accountants is the chapter on the seven accountancy bodies’ total income. At the top of the charts is ACCA at £220m. But whilst ACCA’s income has dropped since its peak in 2020, ICAEW has seen continuous growth in its income over the past five years. 

The report provides a breakdown of the income. For the majority of the bodies, the income is driven mostly through fees and subscriptions and education and exams. For example, just over 50% of ACCA’s income is through fees, with around 35% from education and fees - which tallies with the body’s high student intake. 

However, ICAEW is the outlier. Just under 40% of its income comes from fees and subscriptions, while it earns more from regulation and discipline (around 30%) than education and exam fees (around 12%). 

Breakdown of income, 2022
FRC: Key facts and trends 2023

This number makes sense if you factor in the big fines levied against firms for audit breaches as part of the accountancy scheme. ICAEW’s income last year would have included KPMG’s £14.4m fine for falsifying Carillion audit documents. This income stream is likely to diminish as the accountancy scheme winds down. 

Meanwhile, ICAS earns the highest average income per member and student population at £681 in 2022. 

Audit firms 

The accountancy watchdog also explored some of the key trends in the audit sector and firms with public interest entity (PIE) clients. The report said that the fee income for Big Four firms increased by 11.9% in 2022, which was up on the previous year’s 7.6% growth. 

Likely driven by the Big Four shedding clients, following moves from the government to reduce PwC, Deloitte, EY and KPMG's stranglehold of the audit market, non-Big Four firms saw their fee income grow 18.5%. This continues a trend seen last year of the audit market becoming more competitive, but the non-Big Four firm’s increase this year paled to the previous year’s 23.3% growth increase.

Growth of fee income 2021 and 2022
FRC: Key trends and facts 2023

The trend of non-Big Four firms outperforming their bigger peers was also seen in non-audit work. The Big Four’s non-audit work fee income dropped 16.4% in 2022, compared to the non-Big Four firms seeing an increase of 5.9% against the previous year. 

Despite the non-Big Four firms showing impressive growth in the audit sector, a vast gulf remains between those firms and the Big Four in terms of audit fee income per responsible individual. In 2022, this figure for Big Four UK firms was £2.45m compared to £1.21m for non-Big Four firms. 

That said, non-Big Four firms are gaining ground with 33 FTSE 350 audits now being undertaken by non-Big Four firms compared to 27 the year before. 

PwC leads the audit league table with 25 FTSE audit clients and 65 FTSE 250 audit clients. EY closely follows with 25 FTSE 100 clients and 50 FTSE 250 clients. KPMG and Deloitte are not far behind. To illustrate the gap between the Big Four and non-Big Four firms, KPMG Ireland is listed in fifth position, and then BDO takes the sixth position with one FTSE 100 audit client and 19 FTSE 250 audit clients, but it has the largest number of AIM audit clients at 165. 

The statistics come less than a month after the FRC recently revealed that for the year 2022-23, large accountancy firms racked up fines of £40.5m.

Replies (4)

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By taxdigital
18th Aug 2023 10:35

ACCA is a good global business (!) in education with an exceptional marketing model (in good old days members weren't allowed to advertise their services though!).

Members - I meant professional accountants

Thanks (1)
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By Hugo Fair
18th Aug 2023 13:18

Interesting examples from a bit of a ragbag of statistics which, as with so many of these reports, doesn't really 'join the dots' in search of any conclusions (or even pointers).

My takeaway?
ICAEW could be in trouble soon ... "it earns more from regulation and discipline (around 30%) than education and exam fees (around 12%)", and this is a source about to be closed to them!
Watch those 'fees and subscriptions' skyrocket - and wait to see how soon they hit the point where resignations follow suit?

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Replying to Hugo Fair:
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By taxdigital
18th Aug 2023 13:29

A fall in revenue for ICAEW is certain for two reasons:

a) FRC is staking claim to all the fines from audit failures!

b) the membership number is likely go down as they have a high number of aged members. If you see all the practice sales, most of them selling are ICAEW members.

So, it's ACCA business all the way!

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paddle steamer
By DJKL
18th Aug 2023 14:39

Do ICAS themselves still offer trainee education in house such that one attends block release in Edinburgh or Glasgow that is provided by ICAS? If they do this certainly would explain the much bigger percentage of income from education and exam fees compared with say ICAEW .

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