As the impact of stricter regulations and slower economic growth continues to be felt, business research group IBISWorld said that the accounting profession (and the related fields of tax preparation, bookkeeping and payroll services) will continue to experience consolidation.
In a report released last week, IBISWorld said that the profession is now in a new phase of its development, with significant changes occurring due to the increased and tightened regulations governing its operations, structure and activities. Among other major developments, government regulators and Congress have forced accounting firms to separate themselves from their consulting arms, with many of those functions now considered part of the computer services and information technology industries.
Against that backdrop, the report said that slower economic growth in the United States this year will lead to reduced demand for both tax advice, as well as for advisory work connected to corporate mergers and acquisitions.
Those forces should be catalysts for midsized firms to merge over time in order to compete with the larger firms for a share of the auditing work for major public companies. The report expects the Big Four to seek growth opportunities internationally.
IBISWorld also estimated that in 2005 the "Accounting, Tax Preparation, Bookkeeping and Payroll Services" industry had revenues of $104.8 billion, generated by an estimated total of 454,831 establishments. The research firm expects that the industry's average annual real rate of growth will be about 3 percent through 2010.
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