The trouble the big four accounting firms are having in China is hurting both turnover and their rankings, accounting professor Paul Gillis from Peking University writes on his weblog. “The Big Four had better find their game soon.”
The CICPA has issued their annual rankings of Chinese CPA firms for 2013. It is bad news for the Big Four. BDO’s Chinese affiliate Lixin jumped over both KPMG and EY to kick EY out of the Big Four in China. RSM and Crowe Horwath’s shared affiliate Ruihua pushed KPMG out when it passed both EY and KPMG last year. PwC continues to be the largest CPA firm in China, extending its lead over Deloitte. PwC’s growth was a modest 4%, while Deloitte actually shrunk by 5%.
Here are the top ten CPA firms in China in 2013:
…The future does not look bright for the Big Four in China. I expect capital markets to continue to migrate to the Chinese stock exchanges, meaning fewer U.S. and Hong Kong IPOs that the Big Four historically dominate. Other than dual listed companies, the Big Four have a nearly insignificant market share of domestically listed companies. Multinationals, which the Big Four dominate, are also taking a beating in China, likely making it harder for the Big Four to make up the difference from their core international clients.
The Big Four had better find their game soon. If the trends of the past five years continue, China may be the place where the Big Four are beaten by the second tier.
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