Accountancy sector sees 5% growth in 2020

Singapore

THE accountancy sector expects revenue growth of 5 per cent in 2020, based on a national census of registered accounting entities (AEs) by the Singapore Accountancy Commission (SAC).

Just over half of respondents - 52 per cent - expect revenue growth this year, with another 17 per cent expecting revenue to be flat. Based on weighted average responses, the sector's overall expected annual revenue growth for 2020 was about 5 per cent.

Big Four firms and large AEs were the most optimistic, with 11 per cent of large AEs expecting growth of 1 to 5 per cent, and another 78 per cent expecting growth of 6 to 10 per cent.

In contrast, nearly a third of medium, small and micro AEs expected declines in revenue, with another 18 per cent expecting no change.

Similarly, the Big Four and large AEs were optimistic about hiring, with all such respondents expecting manpower increases in 2020.

But nearly half of medium, small and micro AEs expected no change to manpower, while 17 per cent expected a decline in headcount and 36 per cent expected growth.

AEcensus 2019 was conducted in August and September 2019, regarding activities in 2018. There were 200 respondents, representing almost 89 per cent of the sector's total estimated revenue.

In 2018, the sector's revenue rose 8 per cent to S$2.53 billion from S$2.34 billion in 2017, outpacing the overall economy's 3.2 per cent growth rate.

Audit and assurance services remained the largest source of revenue, accounting for 48 per cent of the sector's total operating receipts, though this was down slightly from 50 per cent in 2017.

At a pace of 13 per cent, growth in non-audit revenues was more than three times that of audit revenues, which grew 4 per cent.

Business advisory services saw the highest revenue growth of 22 per cent, due largely to increased demand for IT advisory services in particular. IT advisory revenue rose 70 per cent to S$138 million, though this was still just 5 per cent of the sector's total revenue.

"Moving forward, we expect firms to continue diversifying their service offerings beyond audit," said SAC chief executive Evan Law.

The number of AEs rose 3 per cent to 721, from 698 previously.

Employment in AEs and related entities rose 7 per cent to 20,280, the highest annual growth since 2014, with an estimated 1,356 jobs created.

Advisory jobs rose 23 per cent, and accounted for 62 per cent of the jobs created in 2018. Said Mr Law: "This highlights the growing demand for employees with multi-disciplinary skills, particularly those with expertise in the high-growth areas."

Though the S$3,000 median gross starting salary of accounting graduates was lower than the S$3,792 median for graduates across all disciplines, "there was good wage progression" after five years, said the report.