The FRC’s key facts and trends in the accountancy profession report shows audit fee income for Big Four firms increased by 2.7% in 2015/16 compared to 4.6% in 2014/15, whilst audit fee income for audit firms outside the Big Four increased by 5.4% over the same period compared to 2.7% in the previous year.

Total fee income for all firms surveyed increased in 2015/16. The increase for the Big Four firms was 7.6% compared with an increase of 4.8% for firms outside the Big Four that are included in the FRC report.

FRC’s analysis suggests the percentage of total fee income derived from audit work has been relatively constant for the Big Four firms, but has been steadily falling for all other audit firms over the last few years. From 2014 to 2016, the percentage of fee income derived from non-audit clients has remained fairly consistent for the Big Four and the other audit firms alike.

The average audit fee income per responsible individual for 2016 remained the same as in 2015, at £1.23m.

The number of firms registered to carry out statutory audit work in the UK and Ireland continues to fall according to the FRC. The number of registered audit firms fell by 5.1% in 2015/16 compared to 4.6% in 2014/15. Between 2003 and 2016 there has been a continuous decline in sole practitioners by almost 37%.

While the total fee income of the audit firms which audit PIEs has grown in 2015/16, there has been a decrease in growth rate of audit fee income for the Big Four firms.

Fee income from non-audit work to audit clients continued to see the greatest percentage increases for audit firms outside the Big Four (19.5%) in 2015/16, compared to 13.2% in 2014/15, whilst the Big Four experienced a slower growth rate in this area (2.6%) in 2015/16 compared with 5.5% in 2014/15.

The FRC report shows the number of audit firms continues to decline. The overall number of registered audit firms was 6,010 as at the 31 December 2016, a fall of 17% since 31 December 2012. The number of members holding audit qualifications also dropped (129,509 in 2016 compared to 140,135 in 2014).

However, membership of the accountancy bodies continues to grow. The seven bodies (excluding AAT) in the report have over 350,000 members in the UK and Ireland and over 515,000 members worldwide. The compound annual growth rate from 2012 to 2016 is 2.4% in the UK and Ireland and 3.2% worldwide.

There are over 164,000 students in the UK and Ireland (up by 0.7% during the year) and over 576,000 worldwide (up 2.9%). The FRC says there was an increase in the number of approved training offices in the UK and Ireland, with an upward trend in the number of students choosing audit as a route to qualification.

The total percentage of female members and students worldwide has increased between 2012 and 2016 and is now 49%, significantly higher than the average percentage of female members which has increased from 33% in 2012 to 35% in 2016. ACCA recorded the largest proportion of female members (46%), while ICAEW has the lowest (28%).

There are significant differences in the age profiles of worldwide members of the seven accountancy bodies, but overall 75% of members are between the ages of 25 and 54 with 52% under the age of 45. CAI has the largest percentage of members under the age of 34 at 33%.

In 2016, 38% of students from the seven accountancy bodies were under the age of 25 compared with 29% in 2012. ICAEW, CAI and ICAS have the highest percentage of students aged 34 or under at 97%, 89% and 85%, respectively.

Melanie McLaren, FRC’s executive director for audit and actuarial regulation, said: ‘A thriving accountancy and audit profession is in the UK public interest. The talent pool in, and diversity of, the accountancy profession continues to grow. The FRC plans to gather richer data on diversity in future editions of key facts and trends and is seeking views on how to do so. The FRC uses the data from this report to inform its views in developments in audit.’

The FRC’s key facts and trends in the accountancy profession report is here.