Accounting firms foresee high sales due to IFRS

Korea’s big three accounting firms were projected to report higher sales for fiscal year 2009, primarily due to a decision to adopt the International Financial Reporting Standards.

According to industry sources yesterday, Deloitte Anjin LLC, the Korean unit of Deloitte Touche Tohmatsu, was estimated to see the biggest rise of 13.8 percent from a year earlier to post estimated sales of 237.7 billion won ($194 million) in fiscal year 2009, which ran from April 2009 to March 2010.

Samil PricewaterhouseCoopers, the local unit of PricewaterhouseCoopers, was projected to see a 9 percent rise on-year to estimated sales of 428.9 billion won. Samjong KPMG Inc., a Korean unit of the global service firm KPMG, was expected to tally 174.4 billion won in sales, up 7.4 percent from a year earlier.

“Demand for IFRS-related services has gone up for the last two years,” said an official at Deloitte Anjin. “Most large firms already completed their preparations earlier last year, while a lot of small and midsized firms began preparatory procedures for adoption of IFRS [in the second half of 2009].”

Accounting firms generate sales through four main services: audit and assurance; financial advisory services; performance and process improvement; and tax. According to major accounting firms, the introduction of IFRS has especially boosted demand in the former two categories.

Experts from the accounting industry believe domestic companies will be ready to adopt IFRS by 2011. Jung Do-sam, executive director at Samil, said, “Firms that are not yet prepared for the new system are mostly small and midsize ones, but those companies would take a shorter period of time, probably around two to three months.”