As per the ELINT Market Research report, what is the estimated growth rate of the external audit services procurement market?
The market is predicted to hold the most significant growth rate during the forecast period and is estimated to reach $115 billion in value by 2023, projected with a CAGR of 5%.
What are the significant dynamics influencing the growth of the external audit services procurement market?
Several factors are attributed to the market growth because of a fair globular economic ambiance, raised scrutiny, changed regulatory frameworks, and the need for accurate financial reporting across different industries, to name a few.
Which central regions foster exponential growth for the external audit services procurement market?
On a geographical basis, North America accounts for 39% of the global market share, 15% is from the Asia-Pacific, while EMEA accounts for 40%. From the three geographic areas, it is statistically exhibited that there are noticeable uptakes of external audit hiring in these regions, indicating the growing market.
DESCRIPTION
External Audit Services Procurement Market Size
According to data from ELINT Market Research’s most recent analysis, the external audit services procurement market is expanding in a promising manner. The global external audit services market has been steadily expanding; projections show it will reach $115 billion in 2023 from $110 billion in 2022. The growing trend indicates that the environment favors businesses purchasing external audit services. The research report also covers an in-depth study on the upward trajectory of such services with substantial growth at a CAGR of 5% from 2027 to 2022. The presented statistics suggest favorable business environments backed by a supportive regulatory landscape.
As the global market expands, companies dealing in the external audit services market also have numerous opportunities for clients and reach expansion. For a first business to use external audit services, it may prompt market competition, working towards improvement in the quality and pricing of the services. Findings in the external audit services procurement market research report prove that changing regulatory requirements and increasing emphasis on financial processes are the two reasons that give evidence that dependence on external audit services is still relevant. Market stakeholders can benefit from this crucial insight from ELINT’s latest procurement market intelligence.
Market Definition
An external auditor is an accredited entity that conducts an independent inspection and assessment of an entity’s financial reports and documentation as internal control. In this respect, through the contract, an entity would want to assure stakeholders, who may encompass shareholders, investors, and even regulatory authorities, of the ownership, soundness, and appropriateness of the financial information.
External Audit Services Procurement Market Drivers
- Regulatory Compliance: The landmark laws have brought clauses for businesses, calling for external audits, thus escalating the demand for auditing services.
- Globalization: Global competition is considered to control the high costs of attaining external audit services and standardize financial reporting requirements.
External Audit Services Procurement Market Challenges
- Complex Regulatory Environment: Audit companies must overcome challenges in the ever-changing regulatory landscape to guarantee compliance and deliver top-notch audits.
- Staffing Issues: Maintaining audit quality and meeting client expectations may be challenging due to high staff turnover rates.
Audit Services Procurement Market Opportunities
- Emphasis on Certain Industries: Businesses can gain a competitive edge by differentiating their service offerings. They can work on more specific services to target particular specializations.
- Building Strategic Alliances: Audit firms should build strategic alliances with IT firms or any other professional service providers with the expectation of helping make their market representations and service owners’ extensions.
External Audit Services Procurement Market Segmentation
- Industry Vertical: Based on the industry vertical, the procurement market research report divides the market into Financial Services, Healthcare, Manufacturing, Technology, and Retail.
- Service Type: According to service type, the procurement market research report classifies the market into Financial Statement Audits, Compliance Audits, Operational Audits, and Integrated Assurance Services.
- Organization Size: As per organization type, the procurement intelligence market research report segments the market into Small and Medium Enterprises and Large Enterprises.
Regional Outlook of the External Audit Services Procurement Market
The regional procurement market analysis projection provides a nuanced overview of the global environment for procuring external audit services across North America, Asia-Pacific, Europe, the Middle East, and Africa. Given that EMEA holds 40% of the market, it is clear that the region has a significant demand for external audit services. In contrast, a mammoth 39% of it has come from North America, offering tough competition. It is a close follow-up of 15%, with which the APAC market has done very well for itself if the response indicates that the region’s demand is on a growth path.
The external audit services procurement market analysis thoroughly comprehends buyer and supplier power dynamics. Suppliers in Asia, North America, and the EU are critical aspects of the procurement process in these regions. Of the influences that market conditions represent, this dominance, most conspicuously in the case of North America, Asia, and the EU, indicates that the factors are most notably a significant pointer. Although buyer power varies by region, the EU and North America have sizable buyer blocs that support fair contracts between suppliers and customers. Asia appears to have significantly less purchasing power in comparison, which points to a market structure where suppliers primarily control the purchasing process.
Cost Component in the External Audit Services Procurement Market
One important consideration is the cost of using outside audit services. Companies must be completely aware of all the costs related to these services, such as the fees audit firms charge, additional fees for specialized services, and chances to save money through negotiation or alternative sourcing methods. A thorough understanding of these costs is necessary to practice fiscal responsibility and maximize the advantages of using external audit services.
Sourcing Models in the External Audit Services Procurement Market
Organizations can choose from various sourcing options when acquiring external audit services, with global sourcing becoming increasingly popular. Employing global sourcing has several benefits, such as improved oversight of audit processes, increased expenditure transparency amongst multinationals, and access to a larger pool of skilled auditors with a range of specializations. Organizations can expedite their procurement operations and save costs by employing global sourcing strategies to match audit requirements with audit businesses’ capabilities and geographic reach.
Pricing Outlook in the External Audit Services Procurement Market
According to the pricing forecast for external audit services procurement market intelligence, audit service costs are expected to rise in 2023. Experts in the field predict a 5–8% increase in expenses due to the growing need for audit services, inflationary pressures, and the complexity of regulatory compliance requirements. Organizations should consider these pricing trends to prevent unforeseen costs and maintain cash flow when budgeting for external audit services.
Contract Period in the External Audit Services Procurement Market
A key consideration when purchasing external audit services is the length of the contract. Engagements lasting longer than five years are increasingly common. Long-term agreements give audit partnerships stability and consistency, enabling businesses to work more closely with audit firms and gain more from frequent audit engagements. Organizations can reduce the risks associated with frequent supplier transitions and use economies of scale to negotiate advantageous terms and pricing structures by entering into long-term contracts.
Engagement Strategies in the External Audit Services Procurement Market
Effective engagement strategies are critical to maximizing the value of audit engagements and building solid relationships with audit firms in the external audit services procurement market. Various engagement tactics are available for organizations, such as proactive communication, apparent collaboration, and matching audit objectives with business goals. Organizations may improve their audit procedures, enhance their financial reporting techniques, and achieve better compliance by cultivating a culture of cooperation and mutual trust.
Pricing Models in the External Audit Services Procurement Market
Regarding industry practices, time- and material-based agreements are the most commonly utilized pricing models currently available to procure external audit services. In this model, corporations pay audit firms according to the actual time that auditors spend on audit activities plus any additional supplies or equipment needed. Time and material pricing models are flexible and transparent, enabling businesses to reduce costs through efficient resource allocation and negotiation while customizing audit fees to the extent and complexity of mandatory audits.
Negotiation Factors in the External Audit Services Procurement Market
The involvement of large corporations in the procurement process greatly influences contract negotiations for external audit services. Big firms are commonly chosen as partners due to their strong reputation, industry expertise, and global presence. When negotiating terms with these firms, companies should consider factors such as compliance expertise, additional services offered, pricing models, and quality of service. By utilizing their bargaining power, organizations can enhance the results of audit engagements and secure favorable agreements.
Leading Players in the External Audit Services Procurement Market
Among the leading businesses in the industry are Mayer Hoffman McCann P. and Armanino LLP. C. Marcum LLP, CohnReznick, Deloitte, PwC, EY, KPMG, BDO, Plante Moran, HW Fisher and Company, Hazlewoods, Saffery Champness, UHY Hacker Young, Smith & Williamson, Ebner Stolz, DHPG Dr. Harzem & Partners, Berney Associés, Dornbach, FALK GmbH & Co KG, Solidaris, William Buck, Balmer Etienne, OBT AG, and Dryden ICS SA.
Cart is empty 
