The time has never been better for accountancy firms in Asia Pacific to capitalise on key opportunities arising out of a period of transformation, according to Market Demand for Professional Accountancy Services in the Asia-Pacific FY2021-2024, a new report from ACCA, the Singapore Accountancy Commission (SAC) and the Shanghai National Accounting Institute (SNAI).
At this year’s ACCA Singapore’s virtual conference, Joseph Alfred, ACCA’s head of policy – Singapore, Australia, New Zealand and Oceania, presented the report’s data and highlighted some of the key opportunities that firms could capitalise on.
Alfred noted the growing trend of companies looking to external advisers to help transform and grow their businesses. ‘The upsurge in demand for advisory and consultancy services has been triggered by growing demand from SME owners, as well as larger corporations, for advisory services to help them achieve a competitive advantage in a complex market,’ he said.
‘The emergence of advisory services has been triggered by growing demand from SME owners’
The survey, which featured a wide range of respondents from small to large firms, revealed that there is a substantial demand for professional accountancy services, with more than 40% of those surveyed across Asia Pacific allocating budgets of US$100,000 or more, and 14.2% US$1m or more annually for professional accountancy services over the next three financial years. The figure below shows the demand for specific categories of professional accountancy services.
In addition to the survey, roundtables were conducted in Singapore and China. IT advisory services is singled out as an area that accountancy firms would want to pay special attention to, with roundtable participants reporting that many IT companies lack the business intelligence required to help organisations reach their financial objectives.
However, professional accountants who can provide IT advisory services will be at a clear advantage (compared to IT companies) as they will be able to provide a more holistic service, combining it with their business and financial knowledge.
Participants noted that skilled talent that can deliver both IT and business advisory services is a rare find.
Another top-five service area is corporate support services, which had not featured in the previous 2018 survey. ‘Corporate support services, which includes legal services, outsourcing services and fund administration relating to asset management, has actually enjoyed an upsurge during Covid-19,’ said Alfred.
‘Many clients prefer interacting with SMPs as they would be interacting directly with the partners’
The services requested from the Big Four and SMPs for Asia Pacific, overall, are identical with slight differences in the intensity of the demand, and a preference for technology-related services from the Big Four (there are differences at the country level, though). It is clear that respondents are of the view that both the Big Four and SMPs should expand the supply of accounting advisory services (accounting advisory services are included under the service category ‘Audit and assurance’).
The trend that many corporates are turning to SMPs for services that they would previously source from the Big Four shows that SMPs, particularly the larger ones, are upping their game.
In addition to the cost advantage, Alfred highlighted the finding that respondents are looking to SMPs for more personalised attention. ‘Many clients prefer interacting with SMPs as they would be interacting directly with the partners,’ noted roundtable participants.
In terms of demand for sustainability and climate change services, Alfred noted this did not rank highly with respondents. Roundtable participants explained that this could be because companies currently do not associate professional accountants with these types of services.
This, he said, is a pity, as many people, including the virtual conference’s guest-of-honour, Grace Fu, minister for sustainability and the environment, see great potential in accountants and finance professionals leading the way in this area. Furthermore, these services are natural extensions of the professional accountant’s traditional roles in reporting, financing and assurance.
‘Accountants are in a very good position to advise on sustainability reporting and green financing,’ he said, ‘while auditors will do well in extending their services to sustainability assurance.’
Read our overview of ACCA Singapore’s virtual conference breakout session on sustainable finance and innovation.