photo: sca.gov.sg


SAC: Accounting Entities sector sees good growth despite challenging market conditions

Against the backdrop of Singapore’s slower than expected growth in the business environment in recent years, the Accounting Entities (AE) segment saw healthy growth in revenue, productivity, job creation, employment outlook, professionally qualified workforce, diversity of services offered and volume of work performed overseas.

This is according to the AEcensus2016, a national census conducted by the Singapore Accountancy Commission (SAC) for Accounting Entities (AEs) which comprise accounting firms, accounting partnerships and accounting corporations, SAC said in its release on 31 March.

Summary source: SAC

Market Revenue

In 2015, the AE segment’s total market value surpassed $2 billion for the first time, an increase of 9 percent over 2014. Estimated total market value stood at $2.062 billion in 2015, an increase of $169 million over 2014.

The Big 4 AEs generated 66 percent of the revenue at $1.367 billion with the remaining 685 AEs generating an estimated $695 million in 2015.

The Big 4 AEs in Singapore in 2017 are still KPMG, PwC Singapore, EY (Ernst & Young), and Deloitte & Touche.

Diversity of Services Offered 

Audit and assurance services continued to be the primary sources of revenue with 51 percent of the estimated total market revenue being generated from these services.

However, the Big 4 AEs’ businesses were more diversified than others with business advisory and tax related services contributing 52 percent of their revenue while audit and assurance revenues made up 47 percent.

The other AEs are also developing their capability for new services to move away from relying on audit as their main revenue driver. In 2015, 62 percent of AEs rely on audit and assurance services compared with 65 percent in 2014.

Regionalisation 

There is also growth in the sector’s regionalisation efforts with respondents reporting an 8 percent increase over 2014 in revenue coming from work performed outside Singapore. This regional work comprises 12 percent of total revenue.

Job Creation and Productivity

The sector employed a workforce of more than 17,800 in 2015, a 2.4 percent increase over 2014. More than 400 jobs were created amidst the challenging business and employment conditions.

Productivity had also increased with average revenue per employee increasing by 2.5 percent over 2014.

A noteworthy observation is that the larger AEs saw higher levels of productivity possibly due to the increased use of technology and the provision of higher value accounting services.

64 percent of AEs expect positive growth in their headcount in 2017.

Better Skilled Workforce

The accounting workforce also became better skilled with 43 percent having professional qualifications, a 6 percent increase over 2014.

Although more than 80 percent of the workforce are graduates, career pathways in the accounting entities is diverse as accounting entities are open to hiring non-graduates with diplomas and accountancy related qualifications.

“AEcensus2016 has revealed heartening findings on how the sector is progressively renewing itself to develop new growth opportunities. More AEs are offering a wider diversity of services, looking beyond Singapore shores for work, embracing technology and developing their workforce with deeper skills - initiatives that reflect the recommendations of the Committee of the Future Economy. The Singapore Accountancy Commission will use the findings to develop new growth strategies and roadmaps, and work closely with our stakeholders to develop Singapore into a leading global accountancy hub,” said Mr Evan Law, Chief Executive, Singapore Accountancy Commission.

The AEcensus

SAC launched the AEcensus in 2015 to have an in-depth view of the accountancy sector as it plays an important role in the growth of the Singapore economy with its large workforce generating high total revenues and its high growth rate.

AEcensus2015 showed that the accountancy sector grew significantly over the years with total receipts and total employment increasing about 60 percent and 45 percent respectively since 2008.

AEcensus2016 was conducted from 15th June to 15th July 2016 involving a sample size of 400 AEs. 170 AEs responded including a 100 percent response rate from the Big 4 AEs.

The census categorises AEs into five major groups based on the number of employees to have a good insight of each category.

  • Big 4 AEs: Headcount of at least 1000 employees
  • Large AEs: Headcount of between 101 to 999 employees
  • Medium AEs: Headcount of between 31 to 100 employees
  • Small AEs: Headcount of between 10 to 30 employees
  • Micro AEs: Headcount of less than 10 employees

AEcensus2016 is supported by the Accounting and Corporate Regulatory Authority, the Ministry of Manpower and Workforce Singapore, SAC informed. The full AEcensus2016 report can be viewed here.

 

This entry was posted in Business.
This entry was posted in Business.