Big 4 audit firms are quietly offshoring portions of the external audit work for publicly held companies, raising a bevy of questions about whether the work is visible to the companies themselves, their investors, and even regulators.
Brian Daugherty, assistant professor at the University of Wisconsin, says he first learned of the effort in 2007 when he attended a faculty forum at KPMG where he heard a description of a “pilot program” to begin moving low-risk, non-judgmental repetitive tasks to offshore offices. He and Denise Dickins, a professor at East Carolina University, decided to study the practice more closely. They interviewed audit partners at Big 4 firms and discovered that all four firms—Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers—engaged in such initiatives to some extent.
