Audit & Tax

The audit and tax market in Germany is characterised by a large number of companies and a diverse provider structure. The respective chambers currently comprise nearly 3,000 auditing firms and over 10,000 tax consulting businesses. The market volume, which includes significant revenue from annual audits and audit-related consulting, amounts to around 17 billion euros. Audit service providers can be segmented into five groups: the Big Four; medium-sized national audit firms, including the Next Seven or Next Ten; medium-sized regional audit firms; small firms and international networks/alliances.

Audit & tax: a differentiated range of services

Since 2006, Lünendonk has been producing a dedicated Survey of the audit and tax consulting market. Over time, audit firms have diversified the range of services they offer considerably. While the majority of revenue still comes from auditing and tax advice, audit revenue is slowly but steadily declining in relation to other services. In addition to audit and tax, advisory services including corporate finance (including M&A), business consulting and IT consulting are playing an increasingly important role, especially at larger audit firms. As digitalisation increases the need for transformation and consulting, large audit firms are strengthening their range of services with expertise in digital customer experience, data analytics, AI, the cloud, cybersecurity, digital content services and forensics. Legal advice, accounting, tax declarations and transaction consulting also remain relevant fields in audit firms’ service portfolios.

Challenges: digitalisation, ESG, internationalisation, recruitment and regulation

The auditing business is highly dynamic. Issues such as internationalisation and recruitment have long been on audit firms’ agendas alongside management reports. Digital transformation is also fundamentally shaping and changing the business. On the one hand, new business areas and competitors are emerging, including around big data and business analytics. On the other hand, new challenges are emerging from regulation (e.g. rotation) and the discussion surrounding the separation of audit and consulting and joint audits. Given the new legislation, ESG will be a new megatrend in auditing, especially in sustainability reporting.