The UK audit market has seen a decline in the number of registered audit firms as it waits for clarity on the direction of audit reform, according to the latest Key Facts and Trends in the Accountancy Profession report from the Financial Reporting Council (FRC).

The number of statutory audit firms registered with recognised supervisory bodies (RSBs) fell by 6.9% in 2024. While new applications to become registered auditors increased by 25.5%, that growth was outpaced by the number of voluntary surrenders in the same period.

Overall fee income also experienced a slowdown. After experiencing 11.9% growth in fee income in 2022 and 11.1% in 2023, UK Big Four audit firms’ fee income increased by just 1.2% in 2024. Growth was better outside of the Big Four, with fee income increasing by 9.8%. However, that was still slower than previous years – fee income grew by 18.5% in 2022 and 13.2% in 2023.

Nevertheless, income from audit specifically was one of the best-performing areas for all firms. Big Four firms increased audit fee income by 9.9% in 2024 – lower than the 19.5% increase in 2023, but higher than 2022, when audit income rose by 7.6%. Non-Big Four audit firms increased audit income by 15.4% in 2024, which is a decline from 23.3% and 23.2% in 2022 and 2023 respectively.

There was also some improvement when it came to upselling services to audit clients. Non-audit work to audit clients increased by 2.5% for the Big Four UK firms, compared to the 8.9% decrease in 2023. Firms outside the Big Four did better, increasing non-audit work to audit clients by 8.2% in 2024 – up from -4.5% the previous year .

Non-UK Big Four firms increased audit income as a proportion of total fee income to 32.3%, up from 29.9% in 2023. Non-audit work for those clients fell slightly, from 8.8% in 2023 to 8.7% in 2024. Non-audit work overall declined from 61.3% to 59% from 2023 to 2024 as a proportion of total fee income.

Non-Big Four firms also increased the number of public interest entity (PIE) audits they completed in 2024. The top five audit firms below the Big Four audited 13.2% of FTSE 250 companies, up from 11.6% in 2023. Below them, firms audited 5.2% of FTSE 250 companies, a 1.2% increase compared to 2023.

Increasing members and students

Membership of accountancy bodies across the board grew again this year, increasing by 0.8% in the UK and Republic of Ireland (ROI) and 1.1% worldwide.

For ICAEW specifically, membership increased by 7.7% between 2020 and 2024 and by 1.4% between 2023 and 2024 in the UK and ROI, and 9.2% and 1.5% across the same time periods worldwide. Student numbers have risen by 26.4% in the UK and ROI and 20.7% worldwide between 2020 and 2024. This growth outperforms the sector average.

“It’s pleasing to see that the number of ICAEW members and students has grown, demonstrating that chartered accountancy remains a popular career path,” says Will Holt, ICAEW’s Managing Director, Education & Training. “We know that the nature of work is changing, and that’s why we’ve invested in our Next Generation ACA qualification, which we’ve future-proofed with the biggest changes in 30 years to give future Chartered Accountants the skills to lead now and in the future.”

“Meanwhile, it’s clear from the data that the audit market is stuck in a holding pattern as the profession waits for reforms to pass through parliament. We urge the Government to bring this legislation forward at the earliest opportunity.”