"Big Four Accounting Firms Near 3 Trillion Won in Revenue, Mixed Results as Market Share Slightly Falls"

Last year, the combined revenue of South Korea's four largest accounting firms approached 3 trillion won. While consulting businesses such as management advisory and tax services showed signs of recovery, Samil and Samjeong achieved positive growth, whereas Anjin and Hanyoung experienced negative growth, resulting in a divergence in performance among the firms. The share of these four firms in the total accounting firm revenue also slightly decreased.

According to the "2024 Fiscal Year Accounting Firm Business Report Analysis" released by the Financial Supervisory Service on November 24, the four major firms recorded approximately 2.9568 trillion won in revenue, accounting for 49.0% of the total revenue of all accounting firms. Breaking down the revenue by company, Samil posted 1.1094 trillion won, an 8.4% increase from the previous year. Samjeong also saw a 2.7% rise, reaching 875.5 billion won. In contrast, Anjin and Hanyoung reported declines of 1.5% and 3.3%, with revenues of 507.4 billion won and 464.5 billion won, respectively.

While the combined market share of the four major firms in total accounting firm revenue fell from 49.5% to 49.0%, their audit revenue share (50.6%) remained at the previous year's level. A Financial Supervisory Service official stated, "Due to competition focused on audit fees, the average audit fee growth across all accounting firms has continued to slow, and the four major firms also saw a 4.4% decrease compared to the previous year."

Last year, the total revenue of all accounting firms reached 6.0281 trillion won, a 3.8% increase from the previous year. By segment, audit services accounted for 2.0904 trillion won, management advisory for 1.9789 trillion won, and tax services for 1.7797 trillion won. While the growth rate in audit revenue slowed to 3.2%, non-audit revenues such as management advisory and tax services rebounded compared to the previous year. Management advisory services shifted from negative to positive growth (3.1%), and the increase in tax revenue (6.6%) far exceeded the previous year.

During the same period, the total number of external audits performed by all accounting firms was 36,756, up 6.1% from the previous year. Of these, the four major firms conducted 4,844 audits, accounting for 13.2%. The audit market share for listed companies remained unchanged at 37.1%.

The average audit fee decreased by 4.5% from the previous year to 46.8 million won, continuing a downward trend since the 2022 fiscal year. The average audit fee for the four major firms was 184.7 million won, for registered firms 71.6 million won, and for general firms 15.2 million won.

A total of 229 directors from 41 firms received compensation of 500 million won or more, an increase of eight from the previous year. Of these, 139 directors (60.7%) were from the four major firms, with an average compensation of 820 million won. By firm, the average amounts were 860 million won at Samil (79 directors), 840 million won at Hanyoung (13 directors), 760 million won at Anjin (6 directors), and 740 million won at Samjeong (41 directors).

As of the end of March this year, there were 254 accounting firms, with the increase centered on smaller firms. The number of registered accountants affiliated with accounting firms was 16,422, up 593 (3.7%) from the previous year. This represents 60.4% of the total 27,211 accountants registered with the Korean Institute of Certified Public Accountants. Among registered accountants, those affiliated with the four major firms increased by 156 (2.1%) to 7,600, accounting for 46.3% of the total.

The Financial Supervisory Service urged these accounting firms to prioritize audit quality over competition focused on audit fees, and to be mindful of threats to auditor independence arising from non-audit services. The agency also announced plans to strengthen inspections of audit quality in the future, including ensuring sufficient time is spent on external audits and maintaining auditor independence through future auditor reviews.

This content was produced with the assistance of AI translation services.