Annual Survey of Accounting Services

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The Canadian accounting industry enjoyed another prosperous year in 2006. Operating revenues climbed to $11.1 billion in 2006, up 12.1% from a year earlier. This increase follows a substantial increase of 13.7% in 2005.

In 2006, as in previous years, the bulk of industry revenues came from traditional accounting services. Audit and assurance services accounted for 30% of total industry operating revenues, followed by taxation services (25%), compilation and review services (16%) and bookkeeping and payroll services (11%).

Firms in Ontario still accounted for the largest portion (44%) of industry operating revenues, followed by firms in Quebec (19%), British Columbia (14%) and Alberta (14%). Quebec's share has remained steady in recent years, while Ontario's share has been shrinking slowly and the shares of Alberta and British Columbia have been growing.

Although operating revenues in 2006 were up substantially from 2005 in most provinces, the largest increases were posted by businesses in Alberta (+25%), Newfoundland and Labrador (+17%) and British Columbia (+14%). By comparison, Quebec (+11%) and Ontario (+9%) showed smaller increases.

The accounting industry is composed of a small number of very large firms with very high revenues and a large number of small firms earning much more modest revenues. In 2006, the 20 largest companies generated almost half of the industry's operating revenues and operating profits, proportions that have remained steady since 2004. However, the 9.1% growth in operating revenues of the 20 largest firms in 2006 was appreciably lower than the 15.1% growth rate posted by the rest of the industry.

Wages, salaries and benefits paid to employees is the industry's single largest operating expense. This expense accounted for just over half of total industry operating expenses in 2006. The total labour cost would be much larger if it also included the remuneration of partners and owners working in their enterprise.

While it has been relatively steady since 2001, the industry's operating profit margin before taxes edged down from 30.1% in 2005 to 29.6% in 2006.

Results from the 2006 Annual Survey of Accounting Services are now available.

Definitions, data sources and methods: survey number 4716.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Luc Provençal (613-951-1960; fax: 613-951-6696; luc.provencal@statcan.gc.ca), Service Industries Division.