Big shake-up for 'Big Four'

As the initial public offerings of large State-owned enterprises, on which the Big Four's revenues are largely dependent, have slowed since 2009, analysts said the Big Four will face tougher competition for smaller companies that are not so enthusiastic about hiring them because of their high charges.

Meanwhile, a recent report by the National Audit Office has uncovered a series of defects with the audit reports of a number of Central State-owned enterprises, most of which are clients of the Big Four, raising questions about the integrity of their services.

"The Big Four all have internal quality control and standards enforcement procedures designed to resist threats to their independence and other improper influences on auditing services," Univer said.

"However, no system is perfect," he said. "Every professional services organization must function in the local business and cultural environment."

As global firms strive to strengthen their footholds in China, Chinese firms are exploring international recognition via participation in global networks, but their local characteristics are still reflected via the number of local qualification holders.

BDO China Shu Lun Pan, the largest domestic accounting firm by revenue in 2011, has 1,431 Certified Public Accountant holders, nearly twice as much as the 771 at PwC.

Zhang Lianqi, a senior partner with RSM China, which was the first domestic firm to achieve annual revenues of more than 1 billion yuan, suggested that there are still challenges facing domestic firms, such as low brand recognition.

"Brand is a feature of a firm's value and behavior, as well as a key source of added value, but we have paid little attention to our brand promotion," Zhang said.

Another deficiency lies in the structure of revenue, as non-audit business makes up a large proportion of the revenue of the Big Four, whereas the Chinese firms are still heavily dependent on auditing transactions, said CICPA's Chen.

CICPA's data showed that non-audit business revenue of accountancy firms in China totaled 10 billion yuan by the end of 2011, and the proportion in total revenue has climbed to 28 percent from 16 percent a year before.

However, Univer is confident that China's domestic accounting firms can develop into world-class competitors. "They have to grow a generation of professionals who are comfortable operating at the top level in the international business environment," he said.

Once a dream destination for China's college graduates, the attraction of working at a Big Four firm is diminishing.

"The golden ages have past," said Ma Xiaolin, a young anditor who has just joined PwC.

"The average salary level hasn't changed much in the past decade, while everything else has increased so much in price," said the 28-year-old.

"Big Four employees used to be able to save enough money for the down payment on their first property purchase within two to three years, but now it's just mission impossible," she added.

"The Big Four used to be first choice for graduates but now it is more like a safety net," said Liu Yanning, a former employee of Deloitte, who quit her job during the 2009 global financial crisis when the businesses of the Big Four were heavily affected.

weitian@chinadaily.com.cn