The Chinese Ministry of Finance (MoF) has published key details
about its plan to develop 5-10 ‘super big’ domestic public
accounting firms within the next decade to challenge the position
of the Big Four in China.
The MoF aims to create three different firm sizes: ‘super big’,
‘big’ and ‘small to medium’, to help bridge the gap between Big
Four revenues and the rest.
According to the MoF, the average audit income of the Big Four in
2008 was about CNY2.4 billion ($352 million).
The Chinese Institute of Certified Public Accountants estimated the
next largest firm in terms of audit revenue was BDO member Shu Lun
Pan on CNY666 million. In 2008, the annual income for the whole
public accounting sector was CNY31 billion, with the Big Four
consuming a third of the pie.
The ultimate aim of the proposals is to double the size of the
public accounting industry to CNY60 billion within the next
It is planned that ‘super big’ local firms would each grow to
annual audit income of CNY3 billion and have strong international
reputations, competitiveness and the ability to offer cross-border
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They would provide the backbone of the industry to serve growing
foreign investment and be supported by up to 100 smaller accounting
The MoF estimates there are more than 7,200 accounting firms in
China employing more than 85,000 practising accountants. The growth
strategy calls for an expansion to 200,000 licensed accountants and
500,000 firm employees within a decade.
Chances for the mid-tier
The proposals indicate global mid-tier networks have a bright
future in China.
Speaking before the announcement, BDO International chief executive
Jeremy Newman said the MoF was pursuing a policy of developing
large Chinese firms in partnership with established mid-tier
networks. This was a departure from the Ministry’s earlier policy
to create 10 domestic Chinese firms that could establish their own