The under-fire Asian finance function where jobs face a serious new threat

If you’re an accountant at the Big Four in Hong Kong, now is a good time to start planning how you might move to the banking sector or transfer to mainland China.

China’s Ministry of Finance announced a draft new law earlier this month that would severely limit the popular practice of Hong Kong-based accountants working with Chinese companies.

The proposed rules are currently out for consultation until the end of the month, but if implemented as planned later this year, they would force international accounting firms in Hong Kong to partner with domestic accounting firms when auditing mainland companies. They would also ban Hong Kong number-crunchers from working in the mainland under temporary licences.

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Recruiters in Hong Kong expect the Big Four will need fewer auditors in Hong Kong and more in mainland China if the law comes into force.

“The Big Four will shift more resources to the mainland,” says Pallavi Anand, managing director of recruitment agency Robert Half in Hong Kong. “They will also have more people on dual contracts so they can still work on assignments in China – this is happening already: accountants are ‘based’ in Shenzhen, in southern China, according to their contract, but actually commute there from HK on a daily basis.”

For junior accountants in Hong Kong, who typically won’t be experienced enough to warrant dual contracts, the employment outlook is less certain. The Big Four have traditionally taken on legions of Hong Kong graduates, tasking them to help Chinese companies with overseas listings and annual audits.

“The proposed law would particularly affect junior auditors as a large segment of the Big Four’s clients here are from China,” says Marc Burrage, regional director of recruitment firm Hays. “Hong Kong by itself isn’t big enough to provide enough external-audit engagements, so there will be an oversupply of candidates for the jobs available.”

Shifting sectors

Big Four bean-counters in Hong Kong who are worried about their jobs might want to make an early exit into the city’s banking sector. “They will be attracted to banks, in particular Asian banks, due to competitive salaries and the fact that Asian banks tend to offer more stable employment,” says Anand from Robert Half.

But making such a move isn’t easy. “Banks do consider candidates straight from accounting firms at a junior level, but only if they have covered financial-services clients,” says Amy Ho, director, financial services, at recruiters Ambition in Hong Kong. “This experience gives them inside knowledge of the banks’ products and internal processes,” adds Burrage from Hays. “They will likely also need sound IFRS and US GAAP knowledge.”

Internal audit provides the most obvious route into a bank and, as we reported in March, the function is short of talent right now in Asia as banks implement Basel III and other new regulations.

Compliance, financial reporting, tax, product control, operational risk and credit risk are other alternatives, although Big Four accountants will be very much third-choice options behind experienced candidates and internal transferees. “These are all roles that require some accounting, control and audit skills, which accounting-firm trained professionals would possess,” says Ho.

Recruiters also say some accountants in Hong Kong may ponder a permanent move to the mainland should the new auditing restrictions come into force. Most will need to take a pay cut – an accounting manager can earn up to $US80k in China and $103k in Hong Kong, according to the 2014 Robert Walters Salary Survey.

But accounting compensation is on the rise in China. A global report released earlier this month from Robert Half says 70% of finance leaders in China plan to increase base salaries for finance and accounting roles this year, while 61% expect to increase bonuses – the largest proportions of any country surveyed. Any forthcoming surge in vacancies from the Big Four is likely to fuel further salary inflation.