Certified public accountants lose former prestige in S. Korea

Certified public accountants lose former prestige in S. Korea

Yong Hwan-jin

2014.02.14 17:58:34

South Korea is about to have 20,000 certified public accountants (CPAs). The country has 16,000 CPAs in total now, according to the Korean Institute of Certified Public Accountants. The number of accountants more than tripled from 5,000 CPAs in 2004. Given that the number of CPAs rises nearly 1,000 every year, 20,000 people are forecast to have the CPA licenses in 2016. 
CPA licenses have lost their earlier charm. An entry-level CPA earns about 38 million won ($35,802), lower than 40 million won a counterpart earns at Samsung Electronics. In the 1990s, an entry-level CPA made 40 million won, overwhelmingly larger than 18 million won a counterpart received at the tech company. 

Companies now hire about 1,000 CPAs a year, far higher than before. As the pool of CPAs expands and the accountants enjoy a less splendid standing, a fewer number of people take tests to win the license. 16,014 people applied to take the test for 555 available licenses in 2000, meaning only one out of 30 people made the cut. Last year, 10,630 people took the test for 904 available licenses, suggesting the competition has loosened to one-to-12. 
The biggest portion of accounting firms’ sales comes from consulting, not accounting and audit. For Samil PricewaterhouseCoopers, Korea’s largest accounting firm, audit services took up only 34.4 percent of sales as of late March last year. The country’s other four major accounting firms now bring in more proceeds from consulting than from auditing. According to officials at accounting firms, corporations find consulting services provided by accounting firms far more feasible, because their recommendations are based on numbers from financial statements. 
This has made it imperative for accountants to develop their own expertise areas to gain an edge in competition. More accountants work in specialized industrial areas such as the construction and electronics. “The perception is spreading that accounting and audit teams need to set expertise industrial areas to deliver a more precise service fast during a short auditing season,” said Bae Hong-gi, senior executive at Samjong KPMG. 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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