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Accounting firms in Singapore see staff growth in 2017, albeit at slower pace: survey

Singapore's accounting sector is expected to increase its headcount this year, albeit at a slower pace than the previous year.

SINGAPORE'S accounting sector is expected to increase its headcount this year, albeit at a slower pace than the previous year.

According to AEcensus2016 - a survey conducted by the Singapore Accountancy Commission from June 15 to July 15, 2016 - about 64 per cent of the accounting firms that responded expect positive growth in their headcount in 2017.

This is, however, slightly lower than the previous year when 67 per cent expected headcount growth. Based on the responses, the accountancy workforce will increase 4.5 per cent in 2017, lower than the 5.8 per cent estimated for 2016. Some 17,812 people were estimated to be working in the sector in 2015.

Large, medium and small accounting entities (AEs) - which hire anywhere from 10 to less than 1,000 employees - are generally more positive about headcount growth in 2017, compared to the Big 4 and micro AEs. The Big 4 AEs are defined as those which has a headcount of at least 1,000 employees. They are Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP. Micro AEs are those with less than 10 employees.

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The survey showed that while audit and assurance services remained the key source of revenue for AEs, the Big 4 AEs' businesses appear to be the most diversified. Audit and assurance revenues accounted for less than half of their revenues, or 47 per cent, while business advisory and tax related services contributed 52 per cent, or 29 per cent and 23 per cent respectively.

Despite the challenging market conditions, the sector generated about S$2,062 million in revenues in 2015, an increase of S$169 million, or 9 per cent, from the previous year.

"Many non-Big 4 AEs have also intensified capability building efforts to move up the value chain to diversify into new services while moving away from relying on audit as the main revenue driver,'' Singapore Accountancy Commission noted.

The Big 4 AEs - which posted the highest revenue growth at 12 per cent - were estimated to have generated S$1,367 million, some 66 per cent of the total market revenue. The other 685 AEs generated an estimated S$695 million in 2015.

Traditional services, namely, audit and assurance, corporate support services and tax-related services, contributed about 77 per cent of the sector's revenue. The remaining 23 per cent of the revenues were generated from varying types of advisory services, such as business valuation and risk management.

Interestingly, the census revealed a slight decline in the proportion of AEs relying on audit services as their main revenue driver, from 65 per cent in 2014 to 62 per cent in 2015. It also showed that AEs generated about 12 per cent of their annual revenue from work performed outside Singapore, an increase from 8 per cent reported in 2014.

"As corporates continue to look towards growth beyond Singapore shores, AEs should also consider growing and strengthening partnerships within and across their networks to support their clients as effective business advisers,'' the accounting body said.

The survey also showed that the percentage of locals being employed in AEs also improved to 74 per cent. The median annual salary of accountancy graduates from the local universities stood at around S$37,000.

AEcensus2016 is supported by the Accounting and Corporate Regulatory Authority, the Ministry of Manpower and the Workforce Singapore.