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Dnkt Has The Largest Number Of Employees In Vietnam In 2018



Figure 4.4: Number of DNKT branches over the years

Source: VACPA, 2019

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In terms of scale, according to VACPA statistics in 2018, the auditing service market has 10 auditing firms with the largest number of employees ranging from 165 to 1,168 employees; 15 auditing firms with from 100 to less than 165 employees; 28 auditing firms with from 50 to less than 100 employees and the remaining 123 auditing firms with less than 50 employees. This shows that although the number of auditing firms has been increasing continuously over the years, the size of the companies is still relatively small. Figure 4.5 below shows the 10 auditing firms with the largest number of employees in Vietnam in 2017 and 2018. Topping this list are still the four largest auditing and financial consulting firms Big4 and there is a relatively large difference between Big 4 and the remaining companies in the top 10 in terms of number of employees.



Figure 4.5: 10 Auditing Companies with the Largest Number of Employees in Vietnam in 2018

Source: VACPA, 2019

The number of practicing auditors of auditing firms as of 2018 was recorded by VACPA as follows: There are 10 auditing firms with the largest number of practicing auditors, from 31 to 75; 28 companies have from 15 to less than 31 practicing auditors; 12 auditing firms have from 10 to 15 practicing auditors; 64 auditing firms have from 6 to 9 practicing auditors and the remaining 62 firms have only 5 practicing auditors. Specifically, the firms with the largest number of practicing auditors (from 31 to 75) are shown in the following figure:


Figure 4.6: 10 auditing firms with the largest number of practicing auditors (31-75 people)

Source: VACPA, 2019



Figure 4.7: 10 accounting firms with the largest number of customers

Source: VACPA, 2019

With the above characteristics of the number of employees and practicing auditors, NCS studied the number of clients of auditing firms. Also according to the VACPA report in 2018: There were 10 auditing firms with the largest number of clients (from 968 to 2,638 clients); 47 auditing firms had from 300 to less than 968 clients; 55 auditing firms had from 100 to less than 300 clients; and 64 auditing firms had less than 100 clients. Data on the 10 companies with the largest number of clients are shown in Figure 4.7. When looking at the graph of the top 10 auditing firms with the largest number of professional employees (Figure 4.5) and the graph of the top 10 auditing firms with the largest number of clients (Figure 4.7), we can see that, with the top 3 auditing firms belonging to Big4, E&Y, Deloitte, PwC, the number of professional employees and the number of clients holding the largest positions, but with the 4th position in these 2 tops, there is a change between KPMG and AASC when AASC had the number of professional employees in 2018 of 409 employees (5th position) but the number of clients was up to 1,889 clients (4th position) while KPMG had 525 employees (4th position) with the number of clients being 1,594 (5th position) with the number of clients of AASC being 259 more than KPMG while the number of employees was 116 less than KPMG. And if looking at revenue, KPMG's revenue was more than twice as high as AASC's in 2018 and 2017. For the remaining auditing firms, there is a large difference between the firms in terms of the number of professional staff and the number of customers.


Regarding the total revenue of the industry over the years from 5,129.57 billion VND (2015) to 7,783.92 billion VND (2018), specifically shown in Figure 4.9. In which, in 2018, the revenue structure of financial statement audit services accounted for 67%, revenue from project completion report audit services accounted for 33%. If only calculating the revenue structure of financial statement audit, in 2018, the group of 4 Big4 companies accounted for 55% of total revenue (in 2017 it was 50%). Specifically, the revenue of enterprises in 2018 is as follows: top 10 enterprises with revenue from 113 billion VND or more; 50 enterprises with revenue from 20 to 113 billion VND; 18 enterprises with revenue from 15 to 20 billion VND; 19 enterprises with revenue from 10 to 15 billion VND; 33 enterprises have revenue from 5 to 10 billion VND and the remaining 46 enterprises have revenue under 5 billion VND. Regarding the classification by revenue in 2017, specifically: there are 10 enterprises with the highest revenue from 90 billion VND or more; 49 enterprises have revenue from 15 to 90 billion VND; 27 enterprises have revenue from 10 to 15 billion VND; 36 enterprises have revenue from 5 to 10 billion VND and the remaining 44 enterprises have revenue under 5 billion VND. Figures 4.8a and 4.8b show the Top 10 auditing enterprises with the largest revenue in 2018, 2017, 2016.


Figure 4.8: Top 10 accounting firms with the highest revenue in 2017, 2018

Source: VACPA, 2019



Figure 4.9: Top 10 accounting firms with the highest revenue in 2016, 2017

Source: VACPA, 2019

Through the graphs summarizing the number of employees, the number of practicing auditors and the number of customers along with the revenue data of the top 10 auditing firms according to each corresponding criterion, it can be seen that: for the group of Big4 companies, revenue always accounts for over 50% of the total revenue of the whole industry and the corresponding number of employees and practicing auditors in these companies is always in the top.

Figures 4.10 and 4.11 show the revenue structure by service type over the years and the revenue structure in 2018 by service type.

Figure 4.10: Industry revenue over the years

Source: VACPA, 2019



Figure 4.11: Revenue structure by service type over the years


Figure 4.12: Revenue structure in 2018 by service type

Source: VACPA, 2019



Figure 4.13: Revenue structure in 2017 by service type

Source: VACPA, 2019

The revenue structure by business type in 2017 and 2018 is shown in Figures 4.12a and 4.12b.


Figure 4.14: Revenue structure in 2018 by business type

Source: VACPA, 2019



Figure 4.15: Revenue structure in 2017 by business type

Source: VACPA, 2019

Through analysis of the Vietnamese auditing market in recent years, it is possible to see a clear differentiation between international auditing firms, especially the Big4 group compared to the remaining auditing firms in terms of staff size, number of clients and revenue. Although the Vietnamese auditing market is still quite young compared to other countries, there is fierce competition between small or medium-sized auditing firms. Because of the huge competition in the market between groups of companies of the same size and number of employees, there have been many cases of lowering audit fees to too low a level, and in reality, many companies do not or do not seriously research and plan the audit time before offering audit fees, because the basic goal of many auditing firms is to get clients. The data collected shows that for the Big4 group, the number of employees in relation to the number of clients is much more reasonable than for many local auditing firms because international firms must comply with the rules and auditing procedures in accordance with global firms and have strict auditing quality control procedures. For local firms, especially those that are not members or networks of international firms, there are still many problems with auditing quality control. When comparing the number of clients with the revenue of many local auditing firms, it can be seen that in many cases, the number of clients is large, but the total revenue of the auditing firm is much lower than that of other firms with fewer clients. Or in many cases, the number of professional employees is low but the number of clients is large. This leads to increased pressure on auditors on audit time for clients, and as a result, the limitations on auditing quality control due to insufficient time to

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