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Perception vs Reality: Australia’s Stance on Offshoring Audit Work

Offshoring—the relocation of business processes to another country—has matured into a core strategy in the global business ecosystem. In Australia’s auditing industry, offshoring is increasingly used to expand capacity, address skill shortages, and contain operational costs.

A 2024 study by Bond University researchers Keith Duncan and Tim Hasso (the “Study”) offers a comprehensive, data-rich view of offshoring in the Australian audit sector. Based on survey responses from 368 senior auditors across firm sizes (Big Four: 30%; Mid-tier: 22%; Small firms: 48%), the findings highlight both the current state and the growing future of audit offshoring.

The executive summary as extracted from the Study:

Who’s Offshoring and How Much?
Offshoring adoption is closely tied to firm size. All Big Four firms engage in offshoring, compared to just 15% of mid-tier firms and 1.6% of small firms.

Among firms that offshore, an average of 12% of total audit hours are conducted offshore in 2023/24. This is expected to double to 25% within the next two years. While few small firms offshore (3 participant firms), those that do offshore up to 20% of their audit hours — and plan to grow that to 43%, outpacing larger firms. This suggests smaller firms view offshoring as a strategic lever for growth and efficiency.

What’s Being Offshored?

Tasks requiring lower professional judgment—such as substantive testing, account confirmations, and analytical procedures—are most commonly offshored. However, the trend is evolving. Firms are increasingly offshoring more complex tasks, including internal control testing and financial statement reviews. Still, risk assessment remains primarily onshore due to its judgment-intensive nature.

Why Some Firms Still Resist

Among those that don’t offshore, the top reasons include:

• Negative perception of offshore quality (49%)
• Client relationship seen as a competitive advantage (43%)
• Client preference for onshore audits (30%)

Is Quality Really a Concern?

The concern over offshore quality is not supported by the experience of firms that do offshore. The Study found that 82% of offshoring firms are satisfied with the quality of offshore work.

Satisfaction was rated highest in:

• Meeting deadlines: 4.5 / 5
• Team collaboration and work quality: 4.2 / 5

Interestingly, mid-tier firms reported the lowest satisfaction levels, potentially reflecting limited experience with managing offshore resources. Conversely, small firms—despite their limited exposure—reported the highest satisfaction, possibly due to careful task selection and scale.

Offshoring vs. Client Relationships: A Modern Perspective

It’s understandable that firms worry about weakening client relationships through offshoring. In the past, physical presence at the client’s office played a central role in building trust. However, today’s post-COVID, digital-first work environment has reshaped this dynamic.

With most client interactions now happening remotely, the distinction between onshore and offshore teams is blurred. Whether an auditor is in Sydney or Mumbai, they’re often on the same Zoom call. This reduces the relevance of geographic proximity in relationship-building.

Moreover, when routine tasks are offshored, onshore engagement leaders are freed up to focus on what clients value most: advisory insights, responsiveness, and strategic support. The right offshore partner, combined with thoughtful task delegation, can actually enhance client relationships, not hinder them.

Do Clients Really Prefer Onshore Work?

While 52% of firms have had clients preclude offshoring, none were from small firms. This suggests that client pushback is relatively uncommon—and when it occurs, it’s typically driven by data security concerns, not perceived quality.

To address this, many firms implement safeguards like remote desktop access and local data hosting to satisfy client and regulatory requirements. It’s worth noting that government clients do typically mandate onshore work.

Conclusion: Offshoring Is Strategic, Not Just Cost-Cutting

Offshoring in auditing is no longer just about saving money—it’s about unlocking capacity, adapting to talent shortages, and strengthening client service delivery. As firms refine their models through robust training, secure data practices, and strategic task allocation, offshoring is becoming more sophisticated and sustainable.

Still, the future of offshoring hinges on more than operational efficiency. It must also balance considerations around local job development, graduate training, and reputation management. The real shift is not just how much is offshored—but in how it’s done — and why.

About Us – GroWize: Your Trusted Offshore Audit Partner

If your firm is considering offshoring or wants to enhance existing offshore operations, GroWize is here to help. We offer tailored capability-building solutions to support high-performing hybrid audit teams:

• Pre-vetted Audit Professionals
  Access highly qualified, globally trained audit staff familiar with international standards.
• Customizable Team Structures
  Scale offshore teams flexibly to meet seasonal demand without compromising quality.
• Compliance & Data Security
  Built-in controls to ensure confidentiality, independence, and secure documentation.
• Continuous Upskilling
  Ongoing professional development in auditing standards, tools, and methodologies.

👉 Discover how GroWize can empower your audit practice: www.growize.co.uk

This article draws on findings from the report:

Duncan, K., & Hasso, T. (2024). Offshoring of Audit Work in Australia: Insights from Survey and Interviews. Bond University.