Accounting Industry Opens Era of 4 Trillion Won in Sales

[Asia Economy Reporter Ji-hwan Park] A total of 195 domestic accounting firms, including the Big Four accounting firms (Samil, Samjong, Han Young, Anjin), achieved sales exceeding 4 trillion won last year.

According to the Financial Supervisory Service on the 28th, the sales revenue of domestic accounting firms for the 2020 fiscal year was 4.364 trillion won, an 11.3% increase compared to 3.9226 trillion won in the previous year.

By service type, sales were 1.4838 trillion won from audit services, 1.4362 trillion won from management consulting, 1.2662 trillion won from tax services, and 177.8 billion won from others. In particular, sales in the audit sector increased by 202.3 billion won from 1.2815 trillion won in the previous year due to an increase in audit hours. Sales in the management consulting sector continuously grew through M&A advisory and valuation services, increasing by 122.5 billion won (9.3%) from 1.3137 trillion won in the previous year.

The Big Four accounting firms recorded sales of 2.1617 trillion won, an increase of 182.1 billion won (9.2%). Their share of total accounting firm sales slightly decreased to 49.5% compared to the previous year. Among the Big Four, Samil had the highest sales at 763.3 billion won, followed by Samjong with 620.2 billion won, Han Young with 403.6 billion won, and Anjin with 374.6 billion won. Samil also had the highest increase in sales amount and growth rate, with 78.6 billion won and 11.5%, respectively.

As of the end of March this year, a total of 195 accounting firms were registered with the Financial Services Commission, an increase of 10 firms compared to the previous year. All were newly established firms.

By size, there were 19 large firms with 100 or more registered accountants, 25 medium-sized firms with 40 to 99 accountants, and 151 small firms with fewer than 40 accountants. A total of 40 firms (18 large and 22 medium-sized), including the Big Four, were registered as auditors for listed companies. Unregistered auditors for listed companies included 1 large firm, 3 medium-sized firms, and 151 small firms.

The total number of registered accountants was 22,861, an increase of 5.1%. Accountants affiliated with accounting firms numbered 13,004, accounting for 56.9% of the total, which is an increase of 6.2 percentage points compared to the previous year.

The number of registered accountants affiliated with the Big Four accounting firms (Samil, Samjong, Han Young, Anjin) was 6,135, a 4.9% increase, but their share among all accounting firms decreased by 0.6 percentage points to 47.2%. Samil had the largest number of accountants at 2,198, followed by Samjong with 1,845, Han Young with 1,100, and Anjin with 992. Samjong increased by 1.5%, Han Young by 0.4%, while Samil decreased by 1.2% and Anjin by 0.6%.

The total number of audit engagements by all accounting firms was 26,969, a decrease of 973 compared to the previous year. The average audit fee for companies subject to external audit under the External Audit Act was 46.3 million won, showing a clear upward trend recently. It was 29 million won in 2017, 31.4 million won in 2018, and 38.2 million won in 2019.

An official from the Financial Supervisory Service stated, "The overall increase in average audit fees is due to factors such as the expansion of standard audit hours and internal accounting control audits, and the increase in audit input hours resulting from the rise in the number of designated companies."