Auditing and consulting services

In recent years, the auditing and consulting services market in Russia in general — and particularly in Moscow — has continued to be one of the most dynamically developing markets with great potential: according to experts’ estimates, the total revenue of 150 of the largest auditing and consulting groups is rising 30% annually. And even better yet, the top ten Moscow-based companies have been ensuring higher growth for the entire industry.

According to data provided by Expert RA Rating Agency, Moscow companies are among the most successful auditing and consulting groups, and ten of them provide more than 60% of Russia’s auditing and consulting services.

Since most of Russia’s auditing and consulting services are provided in Russia, the capital’s companies operating throughout the country are the true leaders in this sphere and, therefore, determine the trends and changes in the structure of the Russian market.

Experts project significant changes in the Russian auditing segment in the near future, related to the abolishment of licenses on auditing activities and the transfer of some functions of state control over such services to self-regulated organizations.

The consulting services segment is expected to demonstrate further improvement of efficiency and a higher quality of services, and, as a result, higher competitiveness on the market, as well as the consolidation of companies that will retain or even boost their share on the market.

The economic conditions in Russia have been favorable for the development of auditing and consulting businesses. Economic growth, the desire of businesses to float shares, and the inflow of foreign investor funds in recent years have all boosted demand for auditing and consulting services. However, the financial crisis is likely to change the situation: high revenues in most industries was ensured by high raw material prices and the availability of foreign loans. Meanwhile, neither one of these two factors are true in the current situation, and there is a good chance that it will remain this way at least in the near future.

Participants of the auditing and consulting market will be forced to bring down expenses, because the alternative is boosting the price of services, which is highly unlikely to prove successful due to lower demand. With this in mind, the auditors and consultants who will be capable of strengthening their positions will be those whose activities are the most efficient during the crisis, even in terms of recalculating the income rate per specialist. The world’s top four companies in this sector are most likely to benefit in the present situation. In light of the shrinking demand, they are likely to expand their presence on the Russian market, as the difference in efficiency between the top four companies and national enterprises is still too obvious.

Meanwhile, the crisis does not only limit opportunities for auditors and consultants, but provides new ones as well. The most obvious one is the inevitable increase in demand for anti-crisis management consultations. Consulting services aimed at providing emergency help to companies — cutting costs and boosting management efficiency, as well as optimizing production without capital investments — are likely to enjoy the greatest demand.

At the same time, industries that are less dependable on foreign loans are expected to demonstrate a relatively stable demand for auditing and consulting services. Among them are chemical and petrochemical industries, food production, mechanical engineering and pharmaceutical industries.

Auditors and consultants have yet another opportunity to make a profit during the crisis — thanks to the more stringent crediting policy of banks. The borrowers have already been forced to prepare more qualitative loan applications, and the analysis of projects to be financed will also become more thorough.

Meanwhile, auditing and consulting services will be in greater demand in strategic industries with significant state participation, as part of state corporations’ projects, federal target programmes, and regional authorities’ projects.

Based on data provided by Expert RA Rating Agency