I am back from a great summer in California and will be paying more attention to my neglected blog.
For the past several years I have been reporting on changes in the rankings of leading accounting firms in China (2011, 2012, 2013) based on the CICPA’s annual rankings. The data is incomplete, since it only includes the audit firms, not the consulting practices run by most of the firms in separate entities.
The 2014 rankings are out. The Top 7 remain in the same position, with some shuffling below. UHY Vocation replaced Daxin in the Top 10.
EY grew at almost 20%, putting it within a pencil’s reach of BDO which had earlier displaced EY from the Top Four in China. #6 KPMG had a horrible no-growth year, probably because it was the big loser in mandatory audit rotation.
Overall the accounting market in China for the Top 100 firms grew at 13%, with the Big Four growing at 10% and local firms growing at 15%. All of those growth rates exceed GDP growth, indicating that accounting is playing a more significant role in China’s economy.
The Chinese accounting market, already highly competitive, has become slightly more competitive. The Herfindahl Hirschman Index (HHI), used to measure market concentration, dropped to 446 from 460 indicating a highly competitive market. The US, by comparison, has an HHI of 1458 for accounting. The US Department of Justice considers an HHI less than 1000 as indicating a competitive market.