Japanese Audit Market Squeezed by Corporate Push for Lower Fees

The Japanese auditing industry is being squeezed by a decline in hourly fees as companies switch to less expensive accounting firms.

Publicly listed Japanese companies that hire auditors to review their financial statements have been shifting away from the four biggest firms—which have been raising their fees—to small and mid-sized auditing outfits that charge lower fees.

Japan’s audit market includes local units of the Big Four accounting firms: KPMG, Deloitte, Ernst & Young, and PricewaterhouseCoopers. Another five second-tier auditing firms and 124 small and mid-sized sized auditing firms are registered with the Japanese Institute of Certified Public Accountants, the industry’s ...