Big Accounting Firms in China

China’s accounting industry has evolved rapidly over the past few decades, shaped by globalization, regulatory shifts, and the country’s broader economic reforms. While the Big Four accounting firms (PwC, Deloitte, EY, and KPMG) remain dominant, the Chinese government has increasingly promoted domestic firms to reduce reliance on foreign auditors. The sector is highly regulated, particularly concerning the auditing of state-owned enterprises (SOEs) and publicly listed firms.

This article explores the landscape of accounting firms in China, highlighting the role of the Big Four, the rise of domestic firms, regulatory challenges, and future trends.

The Big Four in China

Despite government efforts to boost local firms, the Big Four remain influential due to their global expertise, strong reputations, and long-established relationships with multinational corporations, financial institutions, and major Chinese companies. Each firm has a significant presence in China, providing auditing, consulting, tax advisory, and risk management services.

PwC China (普华永道)

  • One of the largest and most established firms in China, with a strong market presence.
  • Heavily involved in IPO auditing, mergers and acquisitions (M&A), and SOE restructuring.
  • Has worked with major Chinese tech giants like Alibaba and Tencent.

Deloitte China (德勤)

  • Strong in financial services, particularly banking and fintech auditing.
  • Plays a major role in government-related projects, smart city initiatives, and digital transformation.
  • Has expanded consulting services, advising on risk and compliance issues.

EY China (安永)

  • Specializes in risk management, financial advisory, and tax consulting.
  • A key player in cross-border M&A deals and foreign direct investment (FDI) advisory.
  • Works extensively with Chinese companies expanding overseas.

KPMG China (毕马威)

  • Strong presence in banking, insurance, and corporate governance advisory.
  • Known for its expertise in compliance and regulatory issues, including U.S.-China audit tensions.
  • Offers consulting in ESG (Environmental, Social, and Governance) strategies.

Rise of Chinese Accounting Firms

Amid China’s push for financial self-reliance, domestic accounting firms have expanded significantly. Many of these firms have secured contracts with SOEs and major private corporations. The Chinese government is actively encouraging companies, particularly in strategic sectors, to work with local auditors instead of the Big Four.

Top Domestic Accounting Firms

BDO Lixin (立信会计师事务所)

  • The largest Chinese accounting firm by revenue.
  • An affiliate of BDO International, leveraging global expertise.
  • Audits numerous SOEs and financial institutions.

Pan-China (天健会计师事务所)

  • Among the fastest-growing firms in China.
  • Strong in IPO auditing, compliance, and consulting for listed firms.

Key Industry Trends

Government Push for Domestic Auditors

  • Chinese regulators have encouraged SOEs and tech firms to replace the Big Four with domestic firms.
  • Policies are designed to limit foreign influence in China’s financial sector.
  • Some multinational companies operating in China now face pressure to hire local auditors instead of global firms.

Future Outlook

Short-Term Predictions

  • The Big Four will retain a presence but may face increasing restrictions and reduced market share.
  • Domestic firms will continue to gain prominence, especially in SOE and regulatory-sensitive audits.
  • Cross-border tensions will shape audit practices, with firms navigating both U.S. and Chinese regulatory demands.

Long-Term Outlook

  • China may develop a “Big Four” of its own, replacing foreign firms in key financial audits.
  • The Chinese government will likely increase oversight on international firms operating in the accounting sector.
  • Advances in AI and fintech auditing will reshape the industry, giving firms that adopt new technologies a competitive edge.

China Accounting Market: Trends, Growth, and Future Challenges

China’s accounting sector is at a crossroads, with global firms facing regulatory headwinds and domestic firms rising in prominence. While the Big Four remain important, government policies and geopolitical shifts favor local auditing firms in the long run. The future of China’s accounting industry will depend on regulatory decisions, technological advancements, and international financial dynamics.

For businesses operating in China, choosing the right auditing firm will require navigating complex regulations and balancing global compliance requirements.