The so-called Big Four, Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers, audit 40% of publicly traded companies in Vietnam. As of last year, Vietnam’s three stock markets, HoSE, HNX and UPCoM, had over 1,600 firms listed, and the four companies audited 664 of them.
Their total revenues in 2021 were nearly VND3.76 trillion (US$160.2 million), and profits were VND235 billion. The profit margins in the industry are generally low compared to others, with PwC having the highest rate of 15.4% and KPMG the lowest of 0.4%. PwC also had the highest revenues of VND1.12 trillion followed by Deloitte with VND1.06 trillion. The latter’s revenues have increased for four straight years.
Ernst & Young (EY) saw revenues decline for a third consecutive year. In the last five years KPMG’s annual revenues have always been less than VND600 billion, the lowest of the four. Industry insiders said business results in the last two years were somewhat affected by the Covid-19 pandemic as customers cut costs and businesses only wanted to keep mandatory audit services and cut others such as consulting and tax advice.
A deputy general director of a Big Four firm said that auditing is a highly professional field that is completely different from normal production, business and service enterprises.
“Unlike a public company, an audit firm does not have any external shareholders except partners who both run it and are its shareholders.”
EY performed the most audits last year, nearly 330, or the same as the other three combined.
However, revenues do not come just from auditing.
A senior official at a Big Four company said that auditing might be the core activity but has the lowest profit margin.
Consulting has a higher profit margin, and the highest is the tax segment.
“That is also the reason why many auditors actively seek to boost revenues from other segments.”
But for EY, auditing remains the backbone, accounting for nearly three-quarters of its total revenues last year. Some of its major clients include Vingroup, Bao Viet, The Gioi Di Dong, Agribank, Vietinbank, Sacombank, VnDirect, and SSI.
Auditing accounts for nearly half the revenues for Deloitte with its major clients being Vietnam Airlines, FPT, Sun Life, and Wooribank.
PwC and KPMG are more into non-audit services, with auditing only accounting for 4.3% and 14% of their revenues last year.
PwC provides some 10 non-audit services including operation consulting, business consulting, legal advice, tax advice, and private business support.
It is a major player in business consulting and operation consulting.
KPMG is known for business consulting, tax consulting and law and legal services.
In Vietnam, it regularly issues reports on corporate activities, human resource management, startups, and consumer behavior.