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FINANCIAL SERVICES | Staff Reporter, Hong Kong
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Hong Kong's largest accounting firms in 2017

There is a huge demand for trust-related services due to looming data risks.

Our annual accounting survey revealed that PwC, EY, Deloitte, and KPMG cemented their positions last year, with PwC taking the lead with a total number of employees at 4,000, up 100 from last year’s figures. EY comes at second with 3,000 employees, also up 100 from last year’s 2,900. Deloitte Touch Tomatsu grew the most with 235 new recruits to add to its 2,265 employees in 2016. KPMG and BDO retained their fourth and fifth places with steady 2,200 and 1,100 employees, respectively.

Deloitte’s global workforce increased by 70,000 new recruits in 2017 to meet the ever-expanding scope of the company’s work. The increase is 8% higher than that of the previous year, considering that Deloitte China is now 13,000-strong across 21 offices, with 2,500 based in Hong Kong.

As the age of big data continues to transform business and recruitment models across sectors, the accounting industry has already stepped up to the challenge by revolutionising traditional tasks such as bookkeeping, tax, and audit. To attract top talent, top accounting firms have also added more recruitment benefits such as flexible work schedules, health and wellness programmes, diverse interest classes, and mobile apps for work.

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Over the next few months, the accounting sector expects a huge demand for trust-related services as a result of uncertainties in information security, data privacy, corporate culture and governance, risk management, and regulatory compliance. Major areas of public concern such as food safety, climate change, and sustainability are also expected to be on accounting executives’ recruitment agenda. 

Wong Poh Weng, chairman, RSM Hong Kong, believes that the biggest change in the industry during the year were the changes in auditing and accounting standards. According to him, significant provisions relate to the auditing standards requiring an extended format of audit reports and extending the auditor’s responsibilities to cover other information.

Furthermore, the accounting sector may have a breakthrough in terms of audit regulatory reform. “The Financial Reporting Council (FRC) have already taken over the investigation of listed company audit failures from the Hong Kong Institute of Certified Public Accountants (Hong KongICPA), but the industry body still retains the duties of routine inspection and disciplinary roles. The reform will make FRC a fully independent audit industry regulator. We envisage the draft legislation may finally find its way to the Legco in the latter part of 2018,” said Johnson Kong, managing director of non-assurance, BDO. 

China’s Belt and Road Initiative will also remain a top consideration as it is expected to rake in huge profits from investments and developments. China’s new cybersecurity law will also have a significant impact on network operators and firms with operations in the mainland. Nevertheless, Hong Kong is set to benefit from China’s economic resilience, particularly from the Belt and Road Kong-Macao Big Bay Area.

Innovation is key
PwC has begun focussing on recruiting talent with backgrounds in science, technology, engineering, and mathematics (STEM) as well as new blood skilled in food supply and integrity and cybersecurity. Raymund Chao, chairman, PwC Asia Pacific, said that PwC has also instituted flexible work schedules with emphasis on work results and not the number of hours clocked in. Furthermore, its employees can access a suite of online applications and services through which they can work from home more efficiently.

“With today’s technology advancements and disruptive forces, professional services providers play a bigger role in facilitating business transformation—helping companies
reconsider business models, either to establish new revenue streams, radically reduce their cost base, or diversify their business by entering new growth markets,” Chao added. Dennis Chow, southern region managing partner, Deloitte China, said that Deloitte has recently established an innovative Asia Pacific Blockchain Lab in Hong Kong. The Lab aims to support clients across the region in solving various business problems through the application of Distributed Ledger Technology. 

He added that Deloitte has also launched Deloitte Technology Fast 20 programme in Hong Kong, a programme which seeks to acknowledge fast-growing companies with viable business models and to encourage the development of innovative and promising local industries. Amidst all these developments, Chow said that what matters most for the accounting profession is how they help clients tackle the challenges and opportunities that arise from present economic initiatives from China and Hong Kong. Deloitte, in particular, has recently unveiled a strategic investment program of US$200m, wherein US$40m will be earmarked to help Chinese companies capture and capitalise on the benefits of the Belt and Road project.

For PwC, the Belt and Road Initiative has enabled it to serve 36 Belt and Road projects in 20 countries, with a total investment value of US$43b. The company also launched the  Belt & Road United in September this year. Belt and Road United is aimed to be a membershipbased platform that promotes the exploration of business opportunities along the Belt and Road.

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Deloitte’s astounding staff growth is also a result of the company’s goal to improve service capabilities in the technology, consulting, and advisory areas. With millennials comprising an increasing share of the workforce, Deloitte also ensures that this generation’s personal values and career expectations are prioritised Chow said that it has been necessary for them to devise new human resource strategies and initiatives to accommodate millennials’ needs by offering flexible work arrangements with good investment on technology—from telecommuting to nursing rooms for working mothers—based on the needs of the individual, the team, and the client.

BDO’s Kong said that its decision to retain staff numbers over the past year is part of its strategy to accommodate staff needs with a more comprehensive package. BDO offers services from learning and development, career advancement, and staff wellness for work-life balance.Moreover, BDO encourages longer staff retention by offering a clear career path for the first five grade levels, with promotions expected every year. According to him, many of BDO’s fast trackers can be promoted to managerial grade within four to five years, with the possibility of being a director at a young age of 33.

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