Sales from the consulting institutional sector of major accounting firms in Korea were found to account for a larger share than the audit institutional sector. Sales at each network accounting firm responsible for consulting over the past five years also increased sharply.
According to materials Rep. Kim Hyeon-jeong of the Democratic Party of Korea on the National Policy Committee received from the Financial Services Commission and the Financial Supervisory Service on Oct. 19, in the 2024 fiscal year, management consulting accounted for 49.75% of sales at Samjeong Accounting Corporation. Audits accounted for only 32.46%.
At Anjin Accounting Corporation, in the 2024 fiscal year, management consulting also accounted for 49.09%, or about 1.5 times the share of audits (30.38%). Samil Accounting Corporation (as of 2023) likewise had a higher management consulting share at 39.41% compared with audits at 35.20%. Among the Big Four accounting firms in Korea, only EY Hanyoung had a higher share for audits (45.98%) than for management consulting (40.83%) during the same period.
Consulting sales themselves also jumped significantly. Under 2024 accounting standards, Samil's management consulting firm sales were 395.2 billion won, up 80.9% from five years earlier. Samjeong (29.1 billion won), Anjin (151.9 billion won), and Hanyoung (300.5 billion won) also surged by 42.6%, 87%, and 179.7%, respectively, over the same period.
Rep. Kim plans to point out at this year's National Assembly audit that although the Certified Public Accountant Act prohibits conducting audit and non-audit services in parallel, some large firms performed high-profit non-audit work through separate "network firms."
Rep. Kim said, "The more an accounting firm becomes financially dependent on high-profit consulting, the more an auditor cannot help but abandon independent judgment to retain clients and fall into a 'self-review threat,'" and noted, "Measures are needed to strengthen auditor independence so that audit accountants can faithfully serve as public watchdogs."