It is always exciting to see when the new yearly intake of junior audit trainees joins audit firms, as for many this is the start of their careers and the first time stepping into the work force after completing their degrees. When I first found out that in the UK that one could start your articles with either a relevant or non-relevant degree it blew my mind. This is because in South Africa one would need a relevant degree to be able to start their articles and at the Big four firms at the time I started my CA journey, they were only accepting individuals that had completed their Honours (CTA). I could not imagine starting my career at the big blue without having my post grad degree and successfully completing my first board course. I am always intrigued when it comes to finding out what our clients experiences are with the current students going through the process of obtaining their professional qualifications.
Last month we were discussing this exact point with a number of clients as the new intake of audit trainees had just started, specifically across the UK. Many were saying how they had some of their largest intakes of audit trainees ever this year. This was great to hear for the profession, however the conversation did turn towards the progression of the students and how there was a common trend that many of these intakes in the past few years were not completing the study qualification or their training contracts. There seemed to be many reasons for this, from not adapting to working in the accounting field especially for those had never done accounting before, those not progressing in their studies and others that found more lucrative work in the corporate space.
We had a look at the recent financial reporting Council highlights for the trends within the UK market and there are some really positive trends highlighted. These include the increasing number of members in all accounting bodies and the increasing number of offices offering the ability to complete a training contract. However, there are some concerning trends from the report which included the declining number of students enrolling each year from 2018 to 2022, the declining number of students becoming members of the profession each year and the decreasing number of firms along with signing partners from 2018 to 2022.
It was interesting to see the correlation between our discussions with our clients and those in the industry and the data from the FRC highlights. Some of the frustrations experienced on the sudden decline in student numbers were students not having a complete understanding of what they were signing themselves up for when starting their training contract and others who did not have the aptitude and only found out this was the case 12 months into their training contracts.
However, it may not just be soley on the shoulders of the Gen Z’s entering the accounting profession, could it not be the profession itself? With the regulators rolling out reforms and becoming a lot more stringent, is the risk of becoming a signing partner worth the reward? Are current signing partners wanting to take on more of this regulated work where experience in this space could be limited? This is clearly reflected in the decrease in the number of signing partners, as mentioned in the FRC report there was a decrease of 20% of these signing partners. This reflects the reluctance of those to become principal members in the industry, therefore it would stand to reason that the number of students choosing this as a career would decrease as well.
There may be a lot of other factors at play, like firms deciding to consolidate within the medium size industry space resulting in the smaller regional firms no longer requiring the same number of signing partners as economies of scale are being applied. Apart from the above, audit firms are still feeling the aftermath of the COVID Pandemic. As the industry slowly starts to normalise over the coming years, we still may start to see a better forward look on how the industry will come back and possibly change to what we have seen over the last decade.
