Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Over 1,000 accountants enter market every year; does Korea need more?
Applicants for the Certified Public Accountant exam line up to enter a test site at Hanyang University in Seoul, in this February 2020 photo. Newsis
By Lee Yeon-woo
Since the government increased the yearly certification quota for accountants to more than 1,000 in 2019, over 1,000 newly certified accountants have entered the Korean market annually.
Yet, the government still believes that the number of lifetime license holders is insufficient.
On Nov. 23, the Financial Services Commission (FSC) finalized the minimum quota for accountancy certification, commonly known as Certified Public Accountant (CPA) here, at 1,250 for 2024. This represents an increase of approximately 14 percent compared to this year.
"We have considered demands from non-accounting firms such as corporations and public institutions, along with accounting firms this year," the FSC announced.
Corporations are welcoming the decision. Faced with a surge in accounting tasks due to changes in the relevant law, institutions and businesses are frequently advertising for accountant positions. Despite this, they are finding it challenging to attract qualified accounting professionals.
Even though the accounting industry does not fiercely oppose the decision, it remains skeptical. The argument is that merely increasing the number of accountants isn't enough — they also need to receive appropriate training.
"The human resource needs of corporations can't be met by rookie accountants. These tasks require someone who has years of work experience in accounting firms," said a Seoul-based accountant who asked to be identified by her surname Jeon.
CPA-accredited people are required to complete over a year of practical training at accounting firms or similar institutions to become official registered accountants. Traditionally, the training is offered primarily by the top four accounting firms here — Samil PwC, Samjong KPMG, EY Hanyoung and Deloitte Anjin.
Accountants hold a rally to oppose the government's plan to increase the Certified Public Accountant quota, in front of the Government Complex in Seoul, in this November 2018 photo. In 2018, the Financial Services Commission decided to raise the CPA exam quota for the 2019 exam to 1,000 from 850. This was the first time that the quota had been increased since 2006. Yonhap
"They function as the training grounds for accountants. If someone initially chooses an institution other than the big four, which is a very rare occasion, it's perceived as if they are discarding their qualifications," Jeon added.
After gaining years of experience there, accountants transition to roles in other corporations or institutions.
However, as the number of new entrants continues to rise, the backlog of people waiting to join the top four continues growing.
"This is concernable as accountants who began their work without adequate training might contribute to substandard audits in the future," an industry official said.
Some attribute the departure of experienced accountants to a personnel shortage.
"In this unrewarding environment, those who have recently entered the industry are also likely to leave when they gain years of experience. Prioritizing improvements in the work environment to attract those who have left and retain the remaining accountants should be the primary focus," the official added.
The development of AI is also a burden on the expansion of the accounting workforce, according to the industry. Already, large accounting firms are managing routine tasks with AI. An increasing number of accountants could result in an oversupply of accountants at risk of unemployment in the near future.
"Accountants, once they gain their credentials, have a career span of 40 years. Given the anticipated changes in the future, expanding the number of accountants may not be a prudent decision," said Kim Young-sik, president of the Korean Institute of Certified Public Accountants.