The emerging practice of sending audit work to low-cost overseas firms is giving corporate audit committees yet another question to ask their external audit firms: Who’s actually doing their audits.
The Big 4 firms are increasingly—but quietly—sending low-risk, mechanical tasks associated with the audits of public companies to overseas affiliates, where labor is cheaper. The practice isn’t prohibited per se, but auditing experts say it raises numerous questions about exactly who is doing what work, the control and oversight over such work, the cost savings it generates, and the transparency of such work to regulators and the client companies themselves.
