Big 4 accounting firms losing clout

Samil PricewaterhouseCoopers CEO Kim Young-sik

By Jhoo Dong-chan

The country's big four accounting firms are losing shares in domestic market.

According to the Korean Institute of Certified Public Accountants (KICPA), Wednesday, the number of registered accountants in the big four accounting firms is 5,196. The figure is 26 percent of the total accountants registered with the KICPA

As of the end of last year, Samil PricewaterhouseCoopers had 9.8 percent with 1,965 accountants; Samjong KPMG had 6.8 percent with 1,365; Deloitte Anjin, 5.1 percent with 1,021; and EY Han Young, 4.2 percent with 845.

The market share of the big four in the number of accountants peaked with 35.5 percent in 2009, and has since declined reaching 29.5 percent in 2014, 27.2 percent in 2015 and 26.8 percent in 2016. It marked 26 percent last year.

The nation's largest accounting firm Samil PricewaterhouseCoopers peaked at 17.7 percent in 2009, but declined to 9.8 percent last year. Deloitte Anjin also dropped to 5.1 percent from 7.8 percent.

EY Han Young CEO Suh Jin-sug

Samjong KPMG and EY Han Young, however, slightly expanded their shares to 6.8 percent and 4.2 percent from 6.3 percent and 3.6 percent, respectively.

The decline of the big four is attributed to the growth of medium-sized firms in the period, according to the KICPA.

“One of the reasons is that an increasing number of small- and medium-size accounting firms are entering into the market with cheaper fees compared to the big four,” said a former Samil PricewaterhouseCoopers accountant who recently quit the company.

“After developing their careers at the big four, a large number of accountants with more than five years of experience decide to leave the company to open their own firm or transfer to others that offer better salaries. Only three out 13 accountants in my tier are still working with Samil PricewaterhouseCoopers now.”

New accountants, however, still prefer working at the big four believing it's more helpful in developing their career.

“Everybody wants to work for the big four at the beginning. However, the workload is unbearable. An increasing number of the younger generation care about the balance between work and life. Obviously, the big four aren't the place for that,” said an EY Han Young accountant asking for anonymity.

The KICPA said a total of 174 accounting firms were registered with the group as of the end of last year. Also, 271 auditing firms were registered in the period.

Sixty-four accounting firms registered between 2009 and 2017, up 58.2 percent. The number of auditing firms increased by 19, or 7.5 percent.

There were only three medium-size firms with more than 100 accountants in 2009, but this rose to nine last year.

Of the medium-size accounting firms, Nexia Samduk had only 209 accountants in 2009, but nearly doubled this to 394 in 2017.