The International Accounting Bulletin (IAB) has published its 2024 World Survey and we are pleased to share that IECnet is ranked 26th in the global rankings based on revenue and headcount. Globally, we have recorded a revenue of US$230.4 million (up by 12.4% from prior year) and a headcount of 2,873 (up by 3% from prior year). A summary of IAB’s World Survey most important points:
International Accounting trends unveiled in IAB's World Survey
The International Accounting Bulletin (IAB) recently unveiled its annual World Survey, a comprehensive examination and ranking of organizations spanning 38 countries worldwide. This survey is made possible through the collaborative efforts of the industry, emphasizing support, transparency, and cooperation.
Survey Overview: A total of 50 organizations, comprising 32 networks and 18 associations, participated in the survey. Collectively, these entities reported a combined fee income of $307.2 billion, reflecting a slight increase from the previous year's $283.1 billion. The survey also highlighted a growing workforce, with 2.4 million people represented, up from 2.2 million in the previous year.
Audit & Assurance Landscape: The crucial role of auditors in maintaining trust in economies takes center stage in the survey. Growing attention is given to conflicts of interest in the accounting profession, prompting the implementation of conflict check systems in mid-tier organizations. Upholding ethical behavior, investing in quality and ethics, and adherence to the IESBA Code of Ethics are emphasized.
Notably, larger audit networks face conflict challenges, creating opportunities for mid-tier firms. The demand for assurance services is expanding to include non-financial information, particularly sustainability reporting, with a heightened focus on ESG (Environmental, Social, and Governance) information. The introduction of ESG legislation, such as the CSRD in Europe and California Climate Disclosure rules, presents a significant opportunity for audit firms.
Audit & Assurance Initiatives: Several initiatives are underway, including the establishment of a Global Quality Working Group to address conflict checking. Some organizations opt for specialist audit teams, while others focus on significant ESG assignments globally, aligning with the new California Climate Disclosure Bills. Organizations are keen on building sector experiences and enhancing services related to sustainability reporting, further strengthening Quality Management Systems.
Advisory Services in a Changing Landscape: In response to inflationary impacts on the supply chain and technological advancements, there is a growing need for risk advisory services. Advisory services are in high demand due to increasing regulatory complexities and the necessity for strategic guidance in a rapidly changing business environment.
Globally, a shift from audit to advisory is observed, especially in North America, with a focus on ESG assurance and increased involvement in digital consulting. Europe and North America prioritize sustainability and ESG issues, creating specialized niches for advisory services. Western Europe experiences a rise in interest in ESG assurance and M&A activities, driven by digital transformation as a primary catalyst for cross-border deals.
Tax Trends and Initiatives: The survey highlights a growing trend of increased demand for tax services and a reduction in the need for audit services. Post-pandemic, governments are raising taxes to alleviate debt, leading to heightened demand for tax advisory services amid political uncertainty.
Initiatives in the tax domain include significant investments in developing tax platforms, enhancing global portals, and embracing technology to navigate global regulations. Tax Transformation Groups aim to automate tax processes, reduce compliance costs, and invest in global software platforms, aligning with the evolving landscape of virtual transactions and legislation preventing jurisdiction shopping.
Recruitment, Retention, and Training Challenges: Globally, recruitment and retention challenges impact audit quality and limit the expansion of audit services. Firms are transitioning from audit to advisory services due to concerns about profitability, staff shortages, and regulatory burdens. Organizations actively work to build capabilities, create positive people experiences, and establish clear career paths.
Initiatives include investments in globally uniform training, support for audit teams, and offshoring parts of the audit to overcome staff shortages.
Private Equity Dynamics: The private equity sector, holding over $2.5 trillion in cash reserves, emerges as a growth accelerator in 2024. Private equity shows active interest in accounting firms, particularly in Asia Pacific. Increases in consolidation and external investors reflect the capital-heavy nature of Professional Services, offering an alternative to traditional business expansion funding.
Tech Stack Investment, AI/Gen AI, and Collaboration: Collaboration is deemed essential, involving the sharing of knowledge, best practices, and experiences within organizations. Open communication policies facilitate the development of common applications, training, and shared experiences, optimizing resource utilization and ensuring consistent service quality.
The transition to cloud-based AI audit software enhances efficiency, reconciling data to multiple standards and aligning audit evidence with working papers. Despite being in early stages, Artificial Intelligence is increasingly integrated into various business areas, expected to witness significant market growth. Technology investments focus on cybersecurity, dashboards for business insights, exception reporting, and the adoption of Robotic Process Automation (RPA), especially in Client Advisory Services. Tech investment is also growing to support ESG reporting in response to potential SEC requirements and new California laws on greenhouse gas emissions disclosure.
