Number of accountancy firms contracts nearly 2% in a year
High street audit firms disappearing following FRC changes to audit threshold
THE NUMBER OF ACCOUNTANCY firms in the UK has fallen by 136, nearly 2% in a year.
According to statistics published by Syscap 1,335 accountancy firms have left the high street in the last five years equivalent to a 15.5% drop.
The disappearance of high street audit firms has been attributed to the relaxation of audit thresholds on businesses, meaning smaller companies can now choose whether or not they wish to be audited.
Research from the Financial Reporting Council showed that 69.1% of all companies were audit exempt in 2007/08 compared to 71.4% in 2011/12 – coinciding with a decrease in the number of registered audit firms.
Philip White, (pictured) chief executive Syscap, said: “The relaxation of audit thresholds means that more and more businesses can opt out of being audited. This has been extremely problematic for accountancy firms, as auditing is a business they rely on for their bread and butter.”
“Other areas of high margin work, like corporate finance, have been weak since the credit crunch.”
