Offshoring of audit work in Australia: Preliminary insights from literature and interviews

Research output: Book/ReportCommissioned reportResearch

Abstract

Addressing a gap in research, this study explores the issue of offshoring audit work in Australia. We conduct a review of extant US-based literature and interviews with auditors at Australian firms to understand the extent of offshoring activity, the drivers of the decision to offshore audit work, the perceived benefits, the risks and the impact upon audit quality. We find that offshoring is pervasive amongst large audit firms in Australia, but that smaller audit firms are not engaging in the activity due to lack of expertise. The main drivers are cost savings and staff availability, stemming from the underlying pressure to maintain audit fees while continuing to deliver excellent service. While the quality of work performed offshore is considered to be of lower standard, this risk is outweighed by the cost savings as they enable the firms to increase the review of work performed offshore while still improving profitability.
Original languageEnglish
PublisherCPA Australia
Number of pages28
Publication statusSubmitted - Jul 2017

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Audit
Offshoring
Cost savings
Audit firms
Perceived benefits
Staff
Auditors
Profitability
Audit fees
Audit quality
Expertise

Cite this

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abstract = "Addressing a gap in research, this study explores the issue of offshoring audit work in Australia. We conduct a review of extant US-based literature and interviews with auditors at Australian firms to understand the extent of offshoring activity, the drivers of the decision to offshore audit work, the perceived benefits, the risks and the impact upon audit quality. We find that offshoring is pervasive amongst large audit firms in Australia, but that smaller audit firms are not engaging in the activity due to lack of expertise. The main drivers are cost savings and staff availability, stemming from the underlying pressure to maintain audit fees while continuing to deliver excellent service. While the quality of work performed offshore is considered to be of lower standard, this risk is outweighed by the cost savings as they enable the firms to increase the review of work performed offshore while still improving profitability.",
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Offshoring of audit work in Australia : Preliminary insights from literature and interviews. / Duncan, Keith; Hasso, Tim.

CPA Australia, 2017. 28 p.

Research output: Book/ReportCommissioned reportResearch

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