IBISWorld for Audit Professionals

How audit professionals can utilize IBISWorld reports.

Updated over a week ago

Note: this article and video predate our Modern Research Experience. We're working on bringing you the most up-to-date training that aligns with our enhanced platform and products.

For a video tutorial, watch IBISWorld for Audit Professionals.

Which industry report sections are most useful for audit professionals?

Let’s get started, using the Coffee and Snack Shops in the US industry report as an example.

Industry at a Glance

Right away, you’ll get a quick overview of the industry and its major trends by clicking into Industry at a Glance. These key statistics give you an idea of the industry’s recent performance or help pinpoint trends that you’d like to investigate further. Maybe, like in the Coffee and Snack Shops industry, the consumer confidence index is down, and you’d like to find out what that means for industry players. Perhaps profit has declined and you want to understand why. That’s the kind of information you can dig into in our later chapters.

An example of the Industry at a Glance page, with the chapter outlined in the navigation menu

In the Industry at a Glance chapter, you’ll also find a summary of Key Trends that give you a high-level overview of the industry, while the Executive Summary breaks down where the industry has been, where it is now, and where it’s heading.

Industry Performance

Once you’ve got a good idea of what’s going on in the industry, head over to the Industry Performance chapter to dig into more detail.

First, you’ll see a breakdown of Key External Drivers, which are factors outside of a business’s control that may present risks or opportunities to its operations. In the Coffee and Snack Shops report, for example, we track factors like consumer spending and confidence, which you can compare against the change in industry revenue from year to year.

An example of a Key External Drivers chart, with the Industry Performance chapter outlined in the navigation menu

Jump into the Current Performance section to look at metrics like industry revenue, employee numbers and number of establishments in both value and percentage change terms to better understand market size and industry performance. You’ll also find detailed analysis of the industry’s performance, and the reasons behind the statistics you see on the chart below.

An example of the Industry Performance chart, with the Current Performance section outlined in the navigation menu

You’ll also have access to Historical Financial Data, which includes raw data from the past 20 years so you can see how the industry has responded to major external pressures, such as the 2008 Global Financial Crisis or the COVID-19 pandemic.

Industry Outlook

The Industry Outlook chapter looks ahead to the next five years in the industry, using our proprietary forecasting model. In this chapter, you can take projections from the businesses you’re auditing and compare them to IBISWorld’s forecasts. Do they match? Are they totally different? What does that mean? These questions give you a great jumping off point in your research, and you’ll have the percentage change, raw data and industry ratios to work with as you dig deeper.

An example of the Industry Outlook chapter, with the types of data used in the Performance Data Outlook outlined

Products and Markets

The Products and Markets chapter is a favorite among audit professionals.

Scroll down to the Products and Services data, and you’ll be able to benchmark the various segments that your client is involved in. A few useful questions to ask while looking over this section include:

  • What percentage of my client’s revenue does each product or service make up?

  • Is it a larger or smaller share than the industry average – and if so, what does that mean?

  • Are they a specialist in their field or operating in a niche market?

  • Does the business have an opportunity to evolve a product or service within their existing space?

  • Is my client missing out on a market opportunity?

The Products and Services section gives you a quick visual overview of the important data, before diving into the analysis on each product or service segment. The product breakdown for coffee and snack shops is pretty straightforward, but this segment also provides insights into more complex segmentation in other industries.

An example of the Products & Markets chapter, with the Products & Services section outlined in the navigation menu

This chapter also covers Demand Determinants, giving you an understanding of why people are purchasing from this industry. Breaking down the factors that push demand one way or another gives you deeper insight into the influences that set the playing field for your clients.

You’ll also find Major Markets in this chapter, which is particularly useful for audit professionals. Understanding the major markets gives you insight into your client’s key markets, so you can ask:

  • Which markets are my client targeting?

  • How well does my client understand their market?

  • Are they aligned to their key markets?

  • Are they missing opportunities?

    An example of the Products & Markets chapter, with the Major Markets section outlined in the navigation menu

Geographic Breakdown

This chapter offers a state-by-state breakdown of revenue, employment, wages and establishment numbers and growth rates, which lets you hone in on information about your client’s industry, whether it’s operating across multiple states or just one. Use the drop-down menu to select establishment, revenue, employment or wage data and hover over a state on the map for a quick look at its share of the industry in that category, or scroll down to the table to see all of that data in one place.

An example of the interactive map of the US in the Geographic Breakdown chapter

If you need to take an even closer look, click on a state to go straight to the corresponding industry report. For example, clicking on California would take you to the Coffee & Snack Shops in California report. These State and Provincial Reports will let you get really granular, breaking down revenue, establishment, employment and wage figures at a county level and offering further insights into local industry operations.

An example of a State Industry Report in the US State Reports

Competitive Landscape

Let’s take a look at the Key Success Factors.

An example of the Key Success Factors section in the Competitive Landscape chapter

These short, sharp insights act almost like a checklist for the business you’re auditing. While some of them go beyond numbers, they can also prompt some really useful questions, like:

  • How does the business’s inventory control stack up?

  • What cost controls do they have in place?

  • Does the client have a strong market understanding?

  • Are they keeping up to date with the latest technology?

  • What is the business’s research and development spend?

If you find that the business doesn’t measure up to some of these factors, you’ll know to start asking questions around those points and digging further into the numbers.

The second key section in this chapter is Cost Structure Benchmarks. This section breaks down the industry’s average profit margin and spending on wages, purchases, utilities, rent, marketing, depreciation and other costs. Hovering over each section of the chart will show you the percentage of revenue the segment accounts for. The chart also tracks the cost breakdown over the past ten years, so you can compare indicators like profit margins or wage costs over the period.

An example of the Cost Structure Benchmark interactive chart in the Competitive Landscape chapter

Scrolling further down, our analysts break down each segment and explain recent key trends, as well as the wider factors that caused them. For example, the Coffee & Snack Shops industry’s average profit margin has declined over the past five years, due to factors like rising input costs and strong competition.

Operating Conditions

Let’s skip ahead to the Operating Conditions chapter, where you’ll get an overall picture of how the industry responds to external factors like technology change, the level of industry assistance, and the regulatory environment. The sections also include a low, medium or high-level indicator, and whether the level is increasing, decreasing or stable.

Revenue Volatility is a particularly useful section for audit professionals. The chart shows how the industry’s level of volatility vs. revenue growth compares to other industries in the country, while the analysis breaks down the reasoning behind the volatility level. In our example, the Coffee & Snack Shops industry has a medium level of revenue volatility, partly due to its exposure to broader trends such as consumer spending and health consciousness.

Key Statistics

The Key Statistics chapter offers 20 years of historical data and five years of projections across a range of metrics. Click the download symbol to export the data to excel, which lets you break it down, find exactly what you’re looking for, and use it in your own analysis.

Audit professionals also love the Financial Ratios section. Here you’ll find 45 different financial ratios and can compare performance across recent years, as well as the three-, five- and ten-year figures.

Click on Calculations in the top right corner for definitions and calculations. Use the drop-down menu at the top left of the table to break down the data by the size of businesses in revenue terms.

An example of the Industry Financial ratios section, outlining Calculations' button and the drop down menu in the Industry Financial Ratios table

Which other IBISWorld collections are most useful for audit professionals?

If you’re looking for information that is outside the standard scope of our reports, chat to your Client Relationship Manager to see if you have access to the following collections:

Risk Ratings

Our additional collection of Risk Ratings Reports offer the numerical values that you need to back up your findings – after all, accounting is all about the numbers. These reports rate different structural, growth and sensitivity risk factors from 1-9, with 1 being the lowest risk and 9 the highest, and weight them according to their influence on the industry.

To quickly access the Risk Ratings for the industry, click on the lightning bolt icon at the left side of your screen. Right away, you’ll see any recent developments highlighted at the top of the page, and the Risk Overview will give you a quick breakdown of the risk scores for each category, as well as the industry’s overall rating.

An example of the Risk Overview chapter in the Risk Ratings reports

Click on the risk component in the navigation panel for a breakdown of each score, including a detailed analysis of each factor. For example, the Coffee & Snack Shops industry’s highest risk component in 2022 is structural risk at 5.96.

By clicking on the Structural Risk tab, we see that barriers to entry, competition and level of assistance all score 7 and above, making them high or very high-risk factors. We generally recommend taking a closer look at any risk component that scores over 6.

An example of the Structural Risk chapter in a Risk Rating report

Segment Benchmarking

When you’re ready to take all this data one step further, click on the Segment Benchmarking chapter in the left-hand navigation bar. Segment Benchmarking is an additional collection that you can add on to your IBISWorld subscription, and allows you to break down our industry data based on business size. Each segment reflects the business size in terms of the number of employees, giving you a closer look at the performance of players in the same segment as your client. With a more granular breakdown, you can benchmark the business you’re auditing against its peers, rather than the overall industry averages, for a clearer view of its performance in key areas.

An example of the Segment Benchmarking chapter

Call Preparation Questions

Earlier in the article, we looked at report sections like Key Success Factors and Key External Drivers, and the questions that they might prompt. For a head start on taking those questions to the client, click on Call Preparation Questions in the left-hand navigation bar.

An example of the Call Preparation chapter, showing the Role Specific Questions section

These call preparation questions are broken down into specific roles, as well as internal and external influences. These questions give you a great jumping-off point to get thinking about areas to explore. They also help you to focus your research in preparation for the audit, structure conversations with staff members, get the data you need, and shape your analysis.

For additional questions regarding IBISWorld for Audit, please contact your Client Relationship Manager. If you don’t have an IBISWorld account, please contact us to learn more about our membership options.

Did this answer your question?