Korea’s major accounting firms are seeking to reinforce their overseas businesses, as the nation’s accounting transparency and auditing skills have approached international standards after years of efforts by financial regulators and businesses.
Samil PricewaterhouseCoopers has initiated the movement to make inroads into overseas markets while its competitors such as Deloitte Anjin, Samjong KPMG and Ernst & Young Korea are poised to follow suit.
Samil, the Korean member firm of London-based PwC, said it has dispatched skilled staffers to 26 cities in 16 countries under its road map to becoming a specialized global player.
Its staffers have participated in a Japanese project on the International Financial Reporting Standards since 2009 and took the initiative in offering consulting services for banking restructuring in Mongolia in 2010.
“Some 10 percent of our thousands of employees have the experience of working at overseas offices,” said company executive Jeong Do-sam.
He stressed that advancing into the global market is not an option but a requisite for the nation’s accounting sector.
Samil PwC, which holds about 35 percent of Korea’s auditing market, has also been the most active agent in providing accounting and consulting services for Korean companies seeking to list their shares on the U.S. stock markets.
Seven Korean companies have listed their shares on the New York Stock Exchange or the NASDAQ since 2000, and Samil PwC was in charge of auditing and related assurance services for six of them.
It offered all necessary consulting and audit services to the Korean companies to meet the stringent requirements of the U.S. Securities and Exchange Commission.
According to the Financial Supervisory Service, the three other firms ― Deloitte Anjin, Samjong KPMG and Ernst & Young Korea -― are also gaining momentum in Asian markets due to their expertise in new international accounting norms.
Samil and the three firms are estimated to have collectively grossed billions of won over the past few years by providing the newly implemented International Financial Reporting Standards services to major firms in Asia.
“As a growing number of countries are scheduled to adopt the IFRS in the near future, the four major firms expect their revenues in Asia and some other emerging countries to surge,” said an FSS official.
He said the Big Four have the upper hand going into the overseas market as they have formed close alliances with globally renowned accounting and consulting firms.
Deloitte Anjin is focusing on advisory services for overseas project financing and social infrastructure.
Anjin, the second-largest player in Korea with a market share of about 27 percent, is closely collaborating with New York City-based Deloitte Touche Tohmatsu on marketing in emerging countries.
Samjong KPMG, in coordination with KPMG in the Netherlands, is actively tapping some Asian countries including Japan, Indonesia and Malaysia.
As the IFRS is applied in a globally consistent manner, Samjong is running separated but unified teams for Japanese and other East Asian clients, said a company spokesman.
Ernst & Young Korea, whose global headquarters are located in London, is also carrying out strategies to attract Asian customers who want to benchmark upgraded auditing and consulting skills.
Regulatory officials at the FSS said the accounting skills and transparency of Korean companies has been upgraded drastically to the levels of European nations and the United States.
Starting in 2011, accounting firms and listed companies have adopted a new set of accounting standards to improve management transparency and attract more foreign investment into the country.
The FSS officials say that how companies prepare for changes to be brought about by the IFRS will change the global status of Korea and Korean companies forever.
Created by the International Accounting Standards Board to encourage countries to use a uniform set of accounting standards, the IFRS is being introduced among Korean companies.
By embracing the IFRS, the country is expected to see more cases of cross-listing, as managerial burdens on domestic and foreign companies wishing to list on bourses here and abroad will be significantly reduced.
Major accounting firms have played a great role in improving the transparency of corporate bookkeeping by introducing ethical standards.
By Kim Yon-se and Chung Joo-won