Certified public accountants lose former prestige in S. Korea
February 16, 2014 Leave a comment
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.
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