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Summary of our market study
As of 2020, the global accounting services market has been experiencing a steady growth, with particular emphasis on the increasing demand for chartered accountants. Despite country-specific regulations such as GAAP in the US or the Plan Comptable Général in France, the global market for chartered accountancy firms mainly services companies within their own country borders. A significant demand driver for chartered accountants comes from SMEs (Pymes), with 55.7% of such businesses undergoing audits in 2020; 71.7% did so out of compulsion, while 28.3% acted voluntarily. Regulatory changes, the growth of digital tools, and the presence of French companies are also shaping the dynamics of the market. Notably, the Big Four accounting firms dominate the Spanish market, holding 60.34% of the total audit sales in Spain as of 2021.
Market Dynamics and Trends in the Spanish Accounting Sector
The Spanish accounting sector, though not officially recognized by the state, has seen remarkable growth in the presence of chartered accountants. With the adoption of international accounting standards like IFRS, the global market for accountancy services has expanded significantly, and Spain is no exception. The number of chartered accountants in the country saw a substantial increase of over 50% from 2016 to 2023. Despite the growth, the profession remains somewhat compartmentalized within national borders, with firms primarily servicing domestic companies. Nevertheless, the evolution of legislation is prompting businesses to seek out qualified professionals to ensure compliance and accuracy in their financial reporting. From a global perspective, accounting services have seen a steady rise in demand, moving from approximately $488 billion to well above $570 billion over several years. The anticipated compound annual growth rate is set to skyrocket over the coming years, potentially reaching a staggering value between $1200 billion and $1300 billion by the end of the decade. In Spain, the market has demonstrated resilience, recovering from a sales dip caused by the Covid-19 crisis to experience an impressive growth rate of over 13% between 2019 and 2021.
Notably, the audit sector within the country has prevailed, suggesting a robust future for the industry. When delving into the different clientele of chartered accountants, we find that large companies are frequently compelled to perform audits due to regulatory mandates, especially if they align with certain financial thresholds or conditions. In contrast, small and medium-sized enterprises (SMEs), or Pymes as they are referred to in Spain, represent a critical segment that often chooses to audit voluntarily. In 2020, close to 2 million SMEs underwent audits, whether due to obligation or choice. The primary draw for SMEs to engage in auditing services is to comply with legal mandates. However, many firms also recognize the value in demonstrating transparency to financial institutions or enhancinc their market perception through audited accounts. Regarding the French presence in Spain, it's particularly noteworthy in the corporate sector. Over 2,000 French entities are spread across Spain, contributing significantly to employment and the local economy. The economic distribution varies, with a significant French corporate presence in Madrid and Barcelona. Additionally, the French population had surged by almost 20% between 2017 and 2022, after a period of decline linked to political uncertainties in Catalonia.
Prominent Players in the Spanish Accounting and Auditing Landscape
The Spanish accounting and auditing market boasts a dynamic array of established and emerging players that cater to a diverse set of industries and clientele. Navigating through the market, one encounters a handful of companies that have carved out their niche and command considerable attention.
- Among the titans that dominate the sector, known colloquially as the Big Four, stand Deloitte, EY (Ernst & Young), KPMG, and PWC (PricewaterhouseCoopers). These multinational giants not only hold substantial market share in Spain but also worldwide. They're acclaimed not just for their auditing prowess but also for their extensive range of professional services, including advisory, taxation, and consulting, serving the top echelons of public and private enterprises.
- The landscape also features specialized firms like ETL Global, which extends its professional services through various cities in Spain. With a keen focus on localized expertise, ETL Global caters to a broad spectrum encompassing industries such as finance, legal, and tax advisory, making them a versatile choice for businesses.
- We also see Bové Montero y Asociados, a firm known for its tailored approach to auditing and consulting services, making significant strides in Madrid and Barcelona. They leverage local insights and industry expertise to offer nuanced services that resonate with regional business needs.
- Soreco, another notable firm, distinguishes itself through its international presence. With offices in strategic locations like Madrid, Milan, Lisbon, and Barcelona, they provide cross-border accounting expertise that appeals to businesses with a global footprint.
- Furthermore, the Spanish market is enriched by entities such as Michael Page, which specializes in recruitment and strategic human resource services, reflecting the inherent connectivity between financial expertise and talent acquisition.
- Other prominent names such as Welex and Brugueras & Garcia Bragado Abogados add to this diverse professional ecosystem.
- Welex, with a stronghold in Marbella, is a beacon for legal and financial advisory, while Brugueras & Garcia Bragado Abogados offers comprehensive legal services, reinforcing the importance of legal prowess in financial matters.
- For those seeking a French connection, there are firms like Llobet y Beirat Abogados and C. Torres A., which offer services that bridge the gap between the Spanish market and French-speaking clientele, highlighting the growing internationalization of the industry.
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Summary and extracts
1 Market overview
1.1 Introduction
A chartered accountant is a professional accountant. In Spain, unlike other countries such as France, the profession of chartered accountant is not recognized or regulated. " El registro de expertos contables" (Register of Chartered Accountants, henceforth abbreviated as "REC") was created in 2008 and by 2023 boasts over 4,000 members, making it the country's professional network. The network was created to harmonize standards for accountancy professionals within the European Union.
In the interests of regulation and harmonization, the Institute of Chartered Accountants of Spain offers several ways for established professionals to become chartered accountants. Chartered accountants, business graduates or economists who are members of the official register of account auditors (Registro oficial de auditores de cuantas - ROAC ) and have professional experience in auditing the accounts of large companies may apply for membership of the REC without taking an examination. Non-practicing auditors can apply for accreditation following a 20-hour training course. Other professionals must pass an examination after demonstrating a minimum of three years' professional experience.
Obtaining official status for Spanish chartered accountants from the government is a priority for the Institute of Chartered Accountants of Spain. However, given the growth in the number of chartered accountants since the creation of the register in 2008, it's easy to see that the profession is bound to expand, in a move similar to the harmonization of standards within the common market represented by the European Union.
1.2 The global market
The profession of chartered accountant is governed by standards specific to each country (***) in Canada. At the very least, you need to be familiar with the legislation in force in the country where you will be practicing.
Despite the development of IFRS standards, the profession of chartered accountant is still relatively compartmentalized by borders, and the majority of chartered accountancy firms will work with companies based in their own country.
However, it may be interesting to observe global demand for accounting services, which appears to be growing steadily. Between **** and ****, the market grew at a CAGR of *.**%, from $***.* billion to $***.* billion. The global accounting services market is expected to grow at a CAGR of **.*% over the next few years, reaching a value of $****.* billion in ****.
France, ****-****, in billions of dollars Source: ****
The main opportunity for chartered accountants and related services lies in the evolution of legislation, which is encouraging companies to call on professionals to guide them and validate their accounts. In Spain in particular, this private title is seeking recognition from the Spanish state in order to standardize this function, as is already the case in France, for example.
1.3 The Spanish market
given that the title of chartered accountant is not recognized by the Spanish state, there are few auditors with this private title. Nevertheless, the number of chartered accountants rose between **** and ****. This increase of **.**% between **** and **** is in line with the ICJCE's efforts to obtain recognition of this private title from the Spanish government.
Growth in the number of chartered accountants since the creation of the REC in **** Spain, ****-****, number Source: ****
In ****, the share of chartered accountants among Spanish auditors was **.**%. That's around *,*** people among **,*** auditors.
Share of auditors holding the private title of chartered accountant in Spain Spain, ****, % (***) Source: ****
As for sales, there was a **.**% increase in sales in **** and *****. The sector has thus overcome the ordeal of the covid crisis, which led to a *.**% drop in sales between **** and ****. It is therefore a growth sector.
Sales trends for the account auditing profession Spain, ****-****, billions of euros Souce : Datos Gob de España
2 Demand analysis
2.1 The different clients of chartered accountants
First of all, it is compulsory for certain types of company to carry out audits. This is the case if a company meets two of the following * conditions for at least * consecutive accounting years:
If the company's total assets exceed €*,***,*** If net annual sales exceed €*,***,*** If the number of employees exceeds **.
certain companies are also required to carry out audits under the following conditions:
If the company issues bonds as part of a public offering. If the company is an issuer of securities admitted to trading on secondary markets or multilateral trading facilities. If it carries out financial intermediation on a regular basis. If its corporate name relates to activities subject to the revised text of the Law on the Regulation and Supervision of Private Insurance. If it receives aid, subsidies or supplies services or goods to the State and other public bodies within the limits set by the relevant Royal Decree. Credit cooperatives. Housing cooperatives. If their articles of association require an audit. If the company's contracts with public authorities exceed ***,*** euros and represent more than **% of sales.
The table below shows the different clients of chartered accountants from the private sector. Out of total sales from the private sector ...
2.2 Demand drivers for SMEs
Large companies meeting the conditions outlined above are therefore subject to regular auditing. SMEs - known as Pymes in Spain - arethose categories of company that do not necessarily require systematic auditing. In order to understand the interest of these consumers in auditing, and therefore of chartered accountants, it is necessary to study the demand from SMEs.
SMEs
In ****, SMEs accounted for *,***,*** of Spain's *,***,*** companies, or **.*% of the Spanish business fabric[***]. Of these *,***,*** companies, **.*%, or *,***,***, had carried out an audit in ****. **.*% had not.
Percentage of Pymes having carried out an audit in **** Spain, ****, % (***) Source: ****
**.*% of these companies have carried out an audit for compulsory reasons. By ****, only **.*%, or ***,*** companies, had carried out an audit on a voluntary basis.
Audit carried out according to whether compulsory or not Spain, ****, % (***) Source: tqt ctrl C ctrl V other source c same Similarly, for **.*% of the companies concerned, the audit concerned the current year-end. **.*% of the companies audited had scheduled an audit during the year. This indicates a greater demand for auditing and accounting firms at the end of the year, when the accounts are closed. Nonetheless,the **.*% of companies planning to be audited during the course of the year means that the chartered ...
2.3 Why use a chartered accountant?
Auditing is compulsory for large companies, but not for Pymes. A study carried out by "el Instituto de los censores de cuentas de España" among Spanish Pymes tells us more about why these companies use auditors. The obligation to do so appears to be the main reason for auditing, with a score of *.**/*. While legal compliance dominates the use of this service,offering transparency to credit institutions and improving the company's image are also decisive reasons for PYMES owners .
Reasons why PYMES calls in auditors Spain, ****, rating out of *
conversely, we see thatprice is the main blocking factor for companies not using an auditing service. Companies also do not consider other auditing services to be useful, with a score of *.** out of *, while others do not use auditing because of the critical role it plays in their internal management. We also note that auditing is unknown to some Spanish SMEs, with a score of *.** / *.
Reasons for non-use of auditing for PYMES Spain, ****, score out of * source : tqt However, we can see that auditing is a service that is considered useful not only for companies that carry out audits, but also for those that do not. For audited companies, this service ...
2.4 The French in Spain
Businesses:
The French Embassy in Spain reported in **** that the French economic presence in Spain is reflected in the presence of more than *,*** French companies, employing over ***,*** people, not to mention the many French start-ups, the vast majority of which are based in Barcelona and number *** according to Les Echos.
While the main French companies are based in Madrid and Barcelona, the distribution of the economic fabric differs:
Distribution of French companies in Madrid Spain, ****, % of total Source: ****
Breakdown of French companies in Barcelona Spain, ****, % Source: ****
people:
In terms of the number of French people living in Spain, there have been two trends in recent years with regard to their location. While their numbers have been rising steadily since ****, representing an increase of **.**% between that year and ****, this increase follows an opposite movement of decline in the French population in Spain between **** and ****. This **.**% decrease in the number of French people between these two years is linked to the Catalan independence process, initiated by Arthur Mas when he was President of the Generalitat from **** to ****; a pro-independence process that reached its climax - to this day - on October **, **** with the declaration of independence by former Catalan president Carles Puigdemont. The ...
2.5 French companies in Spain
Of the more than *,*** French companies based in Spain, **.**% operate in a wide variety of sectors. Companies specializing in new technologies account for **.**%. Banking and insurance are the *rd most represented sector, with *.**% of French firms in Spain. Finally, auditing and accounting firms, where French chartered accountants or Spanish auditors are employed, are the *th most represented sector, with *.**% of French companies in Spain.
Main sectors of French companies in Spain Spain, ****, % of total Source: ****
In terms of headcount, while companies with more than *** employees tend to dominate, there are differences between companies based in Madrid and Barcelona, the two Spanish cities with the highest concentration of French companies. Madrid seems to concentrate more large companies, with **.*% of French companies in Madrid having more than *** employees. Barcelona, on the other hand, seems to have a more balanced business fabric, with only **.*% of companies having more than *** employees.
Size of French companies in Spain by number of employees Spain, ****, % of total Source: ****
Sales are also a good indicator for assessing the French industrial fabric in Spain. The network of French start-ups concentrated in Barcelona can be seen in the high percentage (***) of companies with sales between * and * million euros. conversely, **.*% of French ...
3 Market structure
3.1 The Spanish audit and accounting network
Evolution of CNAE code **** :
In Spain, the CNAE code groups together auditors, accountants, accounting professions and tax and advisory consultants. The graph below shows that the number of people working in this professional category remained relatively stable between **** and ****, with an increase of *.***% in the number of auditors. Nevertheless, these professions recorded a decrease in the number of active members between **** and **** of -*.**%.
Change in the number of account auditors Spain, ****-****, thousands of auditors Source: ****
The number of ICJCE-accredited auditors in Spain has risen steadily since ****. From **,*** professionals in ****, their number has risen to **,*** professionals in ****, an increase of *.**% in * years. However, there has been a decline in the number of practicing auditors, as well as in the number of salaried auditors. Between **** and ****, these two professional categories saw their numbers fall by -**.**% and -**.**% respectively
Change in the number of auditors in Spain Spain, ****-****, in thousands of individuals Source: ****
The number of auditing companies has been trending upwards. While **** companies were counted in ****, there were **** in ****.
Number of auditing firms in Spain Spain, ****-****, number source :
The map below shows the geographical distribution of Spanish auditors. The number of companies is estimated at ****, since unlike the ...
3.2 A concentrated market :
This market concentration is further illustrated by an analysis of the market shares of the various Spanish players. Of the *,*** companies in Spain in ****, the Big Four (***) accounted for **.**% of total audit sales in Spain. Groups of companies with sales in excess of €* million account for **.**% of market share, although they represent only *.**% of Spanish auditing firms.
Number of companies by sales figures Spain, ****, number of companies source: Informe auditoria ****
Market share of Spanish audit firms by sales figures Spain, ****, % of sales Source: ****
Pymes:
In ****, the big four accounted for **.*% of the sector's market share. While independents accounted for **.*% of auditors, it was the other intermediate-sized firms that held **.*% of the sector's market share.
Market share of audit firms in Spain versus PYMES Spain, ****, % Source: tqt Source: ****
4 Offer analysis
4.1 Services offered by chartered accountants
The following table lists the different services offered by auditing firms, where auditors and certain auditors who have obtained the private title of chartered accountant in Spain work:
Source: ****
Some accounting firms also offer consulting services within specific industries. Below is a non-exhaustive list of these services:
Source: ****
4.2 Accounting services prices
The cost of an accounting audit - which represents the work of a chartered accountant - is difficult to estimate, as it is tailor-made to suit different company characteristics. The average hourly rate charged by auditing firms, however, is €**, although this varies according to the following points:
Company size. Company status (***). Complexity of operations. Experience of the chartered accountant. Company activity. Sales figures.
Source: ****
The average salary for a chartered accountant ranges from €**,*** to €**,***, including bonuses and depending on the accountant's experience [***].
The table below shows the prices of external accounting services for companies and self-employed professionals. It should be rememberedthat it does not concern chartered accountants, as the latter are employed in Spain by auditing firms. It may nevertheless be useful for observing the prices charged by outsourced accounting firms.
[***]
4.3 Development of digital tools
Digital transformation and the mastery of new digital tools is a major challenge for the development of the accounting and auditing sector in Spain. The following table summarizes the benefits that these new tools could have on the accounting profession:
[***]
The challenge for the profession remains to learn about these new tools, master them and implement them within the company in order to become more competitive. The following key skills are also relevant to the auditing and accounting professions:
Note: benefits shown in grey indicate a benefit half as greatas those shown in black.
[***]
Digital consulting and accounting tools for the self-employed:
The company e-me gestión offers a service totally dedicated to self-employed workers to help them manage their business. This all-digital service enables workers to use digital tools to carry out their accounting independently, for a subscription fee of €** per month . This service also enables these workers to access their data on multiple media (***) and from anywhere, thanks to the storage of their data on a cloud. This service also enables them to edit and declare their invoices, and follows one of the trends driven by ecology, namely the elimination of paper - although data also has ...
4.4 Directories of French-speaking accountants in Spain
Below is a non-exhaustive directory of auditing companies with franchises:
5 Regulations
5.1 Regulations governing the profession of chartered accountant in Spain
Originally, the"Real Decreto Legislativo */****, de * de julio" regulated auditing activities in Spain. This activity is now regulated by the following legal texts:
The Law of **/**** on Audit of Accounts The Development Regulation of the Law of **/**** on the Audit of Accounts. Regulation (***) N°***/**** of the European Parliament on specific requirements of statutory audit for public interest entities.
Changes brought about by"Ley **/****, de ** de julio, de Auditoría de Cuentas":
This law has primarily impacted public-interest companies. Below is a list of the main changes caused:
Change of auditing company every ** years. Change of auditors every * years. Creation of an audit committee within all public-interest companies, responsible for checking the value of the audit carried out. Audit firms may no longer perform other audit-related services when auditing a company. Issuance of more information, such as identified risks, auditor transparency and improved language for a better understanding of the audit.
Source: ****
6 Positioning the players
6.1 Segmentation
- Deloitte France
- KPMG Expertise et Conseil
- PwC Audit
- EY Parthenon France
- Mazars Forvis Groupe
- Grant Thornton France
- RSM
- Alpha Groupe
- BDO
- ETL global edit
- ETL Global- European Tax and Law
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