Oversupply of accountants looms over Big 4

Certified public accountants (CPAs) hold a rally in front of the Government Complex in Seoul to protest the increase in the number of new CPAs, in this January file photo. / Yonhap

By Park Jae-hyuk

A record-high supply of newly certified public accountants (CPAs) this year has become a major headache for the so-called Big Four accounting firms here which need fewer workers due to digitization and the COVID-19 pandemic.

Industry insiders said the four firms decided to reduce hiring this year and to delay promotions of some of their employees, as part of efforts to cut payroll costs amid the oversupply.

According to industry officials, Tuesday, Samil PwC, Samjong KPMG, EY Hanyoung and Deloitte Anjin will collectively hire around 770 new CPAs this year, far fewer than 1,060 in 2019.

This decision was made despite their solid earnings last year and huge salaries given to executives.

The four were able to offer jobs to all 1,009 new CPAs last year, when they collectively posted nearly 2 trillion won ($1.7 billion) in sales due to growing demand for external audits and consulting. Their 38 executives also earned annual salaries of over 500 million won each that year.

These factors led more CPAs to stay at the Big Four, rather than moving to smaller firms or other industry sectors.

The unprecedented COVID-19 crisis, however, has caused a sudden contraction in the tax accounting and consulting markets. The continuous digitization drive in the accounting industry has also lowered demand for new accountants.

As a result, the four firms have been unable to guarantee all 1,110 new CPAs jobs this year.

Samjong, which hired 380 last year, recently recruited 267 new CPAs. Samil decided to reduce the number of CPAs to hire to 220 this year from 279 last year, citing its digitization. Anjin and Hanyoung each plan to hire less than 200.

Sources said one of them even postponed promotions of senior associate-level employees who receive relatively higher salaries.

“They joined the firm when CPAs were in demand,” an industry insider said. “Their employer seems to have made the decision because it is difficult to cut their salaries.”

As concerns have grown throughout the industry, Korean Institute of Certified Public Accountants President Kim Young-sik said he would call on the Financial Services Commission (FSC) to reduce the supply of news CPAs.

The financial regulator said it is considering reducing the supply from 2022, taking into account the decline in population of those in their 20s and 30s. Some industry officials expect the number of new CPAs will decrease to 1,050 next year.