Accountancy hires to slow in 2013
Sharp drop in new stock offerings means there will be no increase in the number of recruits joining the industry next year, says trade body
The accountancy sector, which has recruited aggressively in recent years, is expected to slow down its hiring next year.
"As there have been far fewer [initial public offerings] this year, the recruitment in the industry will remain flat next year," said Keith Pogson, the president of the Hong Kong Institute of Certified Public Accountants, the city's industry body which has about 33,000 members.
Pogson told the South China Morning Post that the Big Four accounting firms - PwC, Ernst & Young, Deloitte and KPMG - together would hire about 1,000 fresh graduates in Hong Kong and about 7,000 to 8,000 on the mainland next year.
These numbers are similar to those last year, a reversal of the trend in past years when the industry has had to increase hiring levels every year in step with the growing demand for audit work as a result of a deluge of initial public offerings.
For the past three years, Hong Kong Exchanges and Clearing has been the world's largest listing market in terms of the amounts raised. But it is likely to drop out of the top 10 this year. In the first eight months of this year, new listings raised less than HK$45 billion, compared with HK$190 billion in the same period last year, marking a 10-year low.
Brokers blame economic uncertainties in Europe and the slowdown in mainland China for the weak investment sentiment that has resulted in fewer listings.
But Pogson is still upbeat. "Mainland China's economic growth may slow down slightly but it is talking about 7.5 per cent growth a year, which is still much higher than many countries," he said.
He said the institute had been working closely with the government to transfer its power of conducting practice reviews of auditing firms to the Financial Reporting Council. Practice reviews refer to inspections of audit firms aimed at ensuring their procedures and internal controls are in order.
Inspections are now conducted by the HKICPA, which licenses and regulates accountants. But in advanced markets such as the US and Britain, independent bodies are tasked with the job. Hence the government now wants the Financial Reporting Council to take over the practice review power from the HKICPA and a proposal to change the law will be submitted to the Legislative Council next year.
The Financial Reporting Council was set up in 2006 by the government to conduct investigations into auditing failures of listed companies.
"I think the HKICPA has done a fine job on the practice review. However, it is highly likely that we will have to pass it on to the Financial Reporting Council as we have to catch up with the international trend. Otherwise, it may affect Hong Kong's position as an international financial centre," Pogson said.
According to Pogson, the institute would also continue to promote gender equality. The HKEx has been urging listed companies to adopt policies to achieve a more balanced gender composition on their boards. There are equal numbers of male and female accountants. But when it comes to partners, only 30 per cent in the Big Four firms are women.
"This will change in the future as 65 per cent of the young accountants are female. This means in 20 years, the industry may be dominated by women," Pogson said.