단일법인 전환의 장애요인 번역(영어 번역본)
1. Obstacles to the conversion into a single firm
(1) Characteristics of the Korean accounting market * The mode of Non Big4 accounting firm: An alliance among people
* A ruthless, infinite competition market: Securing more clients is the first priority.
* No organization can make a client: Individuals with many clients are gathering to form a firm.
* People of like minds make a small group in a firm: The beginning of business division
* Most of the clients of Non Big4 are small and medium businesses: Personal connections play the greatest role.
* Influence of BDO: Not as big as CEO thought (the size of referrals is not big) (2) Inevitability of business division * Corporate expansion in size by merger: Continuation of distribution structure before merger
* Differences in configuration of business between divisions: Differentiation of distribution structure (3) Advantages and disadvantages of business division * Advantages:
A member can select an business division fit to him or herself.
Management can be distributed to lighten the burden of a corporate division.
Clear-cut line of responsibility can be established.
* Disadvantages:
CEO’s domination over a business division may be weakened.
Quality might be degraded due to division-oriented quality management.
An opportunity for matters which should be dealt with in time might be missed. 2. Details of conversion into a single firm (1) Matters that should be relaxed * Line of Service: Not available for Big 4 type of organization (requiring one-time service of small business)
* Age cut-off: Applied only to directors taking working responsibility into account
* Issues of business division:
– Basic matters such as accounting, HR, contracting, quality, etc. should be under integrated management.
– The current business division should be converted into line of service depending upon the weight of business.
– Distribution and business performance would have autonomy of business division.
(2) Fields available for immediate implementation of BDO Obligations
* APT: Entire education in the first-half and second-half year, to be applied to all firms by 2016 accounting year
* PII: From the portion started on August 1, 2015
* CVI: From the portion started on July 1, 2015 3. Issues related to NBDO (1) An issue of BDO allotment sharer * BDO allotment should be paid by NBDO but was shared by the division that took the business of BDO referrals.
* Originally, BDO was an individual’s business (Accountant Lee Doo-soon): He hired his staff under his own responsibility to deal with the business and profits except for expenses including allotment belonged to him.
* Division 5 took the implementation during 10 years when Baek Jin-hwan was ILP and annual deficit (total 2 hundred million won) was made up for by the firm.
* Organized into CEO’s direct control system during the days of Kim Cheon-soo ILP: BDO allotment was stipulated as a necessary expense of the international division (a division supervising the business for BDO Referrals) in the International Division Detailed Rules of Operation.
* The International Division was transferred to NBDO in line with the establishment of NBDO: Profits were realized in the BDO Referrals last year.
* There was no request to support allotment at the budget planning for 2015 accounting year but on December 8, 2014, the issue of who would share the BDO allotment was suddenly raised (corporate common expenses were also at issue).
* DAC suggested to discuss this issue after settlement but could not break NBDO’s obstinacy. When DAC made BDO known about it, NBDO could not overcome threats such as disciplinary action against interested persons and replacement of ILP and finally paid the allotment. (2) An issue of ILP replacement * There was no special plan. It was discussed in dispute over BDO allotment sharer.
* Ok Min-seok ILP has the problem of legitimacy (he is not a partner nor a director and was appointed by NBDO’s CEO unilaterally even without going through board of directors.)
* He is lack of knowledge as DAC ILP (he only speaks for the side of NBDO and receives the direction of NBDO’s CEO).
* Because BDO allotment sharer is problematic, a plan to reshuffle the organization into CEO’s direct control like before NBDO and share the allotment to the entire DAC is under consideration. 4. Opinions about the letter dated May 5, 2015 (1) Regarding the saying that those who cannot comply with BDO Obligations should go * BDO is not the master of DAC and DAC is not the subsidiary of BDO.
* From 1980s to 1990s, BDO moved from Samhwa Joint, Dongseo Accounting Firm, Seongjin Joint, Daongjae Accounting Firm, Seongjin Joint and Sejong Accounting Firm in Korea and in 1998 was settled in DAC. Therefore, DAC is credited with stably maintaining BDO in Korea.
* At present, leaders of NBDO are those who have joined DAC just 5 to 6 years ago and been seldom credited with growing Daeju. In terms of morality, a CEO should not say such words that the main room should be relinquished to novices ignoring those who have contributed to the growth of DAC for 20 to 30 years, before discussing obligations.
* DAC was a 4-division system when it concluded the member firm agreement with BDO in 1998 and an individual accountant belonging to one of the divisions managed it. If the business division system had such a great problem, the member firm agreement should not have been concluded.
* It was the resolution by the board of directors and general meeting of employees of DAC that the minority should leave the firm. BDO’s insist that the resolution of the general meeting of employees of DAC is not fair is a solemn interference in domestic affairs.
* The separation was decided by the board of directors in April, 2012 and the separation in such a manner that the minority would leave the firm was decided by the board of directors in April, 2014 and September, 2014. It is contradictory to push us to implement the decision when the separation was decided and to deny the decision itself at this belated time and what’s worse, to push us to act contrary to the decision of the general meeting of employees.
* If the brand, name and reputation of BDO are so great, we advise to dismiss an idea to lean on the organization made by others and go to a wilderness bravely and test yourself.
* If those who try to keep BDO obligations are so precious, admit the separation and put both organizations into competition with each other. Then a superior one would widen its influence. (2) Cases worthy of note * Except for Big4, accounting firms which advocated true single firm in Korea have disappeared or been at a standstill without exception. Recently, Howarth had held out for 10 years and merged with Hanul Accounting Corporation which was far beneath us and GT still has contained only 30 employees even after 10 years and BT or Yale which have able owners have not increased in size. In turn, it seems that the capacity of 80 persons of BT is the boundary line of true single firm.
* On the contrary, Nexia or RSM which were divided into an international division and a local division have so much grown that no one knows when they might get ahead of us. We have never heard of that separation caused any trouble. Hanul Accounting Corporation which recently merged with Howarth has been separated, too. | 