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Presenting… the IAB World Survey 2013

January heralds not only the start of a New Year at IAB, but also the busiest part of it. This month we have been beavering away on our annual IAB World Survey, comprising hours of data crunching (made possible by your kind contributions), interrupted only by one-to-one interviews with the industry's most senior leaders, eleven altogether this year.

While January is the busiest month for the IAB team, our work on the World Survey starts long before, and each year we strive to make it that little bit richer in data and analysis. This year we were conscious of some of your concerns about the data and the ranking process, especially in relation to non-exclusive, correspondent and alliance member fee income.

As a result, we have spoken to each network and association surveyed, asking for increased transparency in breaking up the results into full-member fee income and fee income coming from any non-exclusive/correspondent and alliance members. With networks especially, we've had considerable success in obtaining this data, and have managed to note most of the revenue portions not coming from full-member firms. Nevertheless, this year we've stuck to footnoting the amounts that came from non-full-member sources, but the transparency achieved in the survey process has given us a good base to build upon and consider how we can look to break down the data in coming years.

Enough about our methodology - let's move onto the results. Growth through M&A has emerged as one of the main trends this year and a major contributor to success among global organisations.

In general, networks performed much better than associations in 2012, with growth flat for the latter. Overall market growth among the 45 IAB surveyed international networks and association averaged 5%, down from last year's 8%.

Growth was hard to come by in the developed markets with revenue increases mainly attributable to M&A activity and changes in strategy to adapt to market conditions, such as increased audit efficiency and increased focus on market niches.

The emerging markets paint a different picture, with Africa singled out as an exciting expansion opportunity, as Chinese investors show appetite for the continent's natural resources and economic predictions look increasingly upbeat.

In terms of service lines not much has changed, but several pressures on audit have emerged: regulatory uncertainty, increased compliance requirements, fee pressure, deadlocked global adoption of IFRS and difficulties in attracting young audit partners, to name but a few.

With accounting market concentration still a hot topic across Europe - and with the US, India and some African countries looking at the issue, many firm leaders report a change in clients' behaviour. While pressure on fees is still very acute, most firm leaders say there's been at least a change in perception triggered by the market concentration debates, leading to clients asking more questions and looking more seriously at mid-tier alternatives to the Big Four.

With the outcome of the EU audit reform debate and the UK Competition Commission's final report still pending, some say the debate itself has moved the market a long way in the right direction, arguing that any intervention by regulators or politicians now could be counterproductive in efforts to create and sustain a more dynamic market.

What 2013 holds is hard to predict, but most of the industry's most senior leaders have given us their insights which we share with you in this issue, while interpreting the main trends of the past and current fiscal year. I hope you enjoy reading the survey and the data analysis and that the information is of value to you in your own businesses in the coming months.
Finally I'd like to thank the IAB team who've put such a lot of hard work into the World Survey: group editor Fred Crawley, our reporters Carlos Martin Tornero and Peter Johnstone, and cub reporter Jonathan Minter.

Ana Gyorkos
ana.gyorkos@timetric.com

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