The future of Audit

July 2017

Part 3 of my trip to Russell Bedford firms in Asia took me to Kuala Lumpur. I was again welcomed with what has now become a continuing theme of superb hospitality. Their partners spared the whole morning to meet with me, highlighting my message of the value of personal interaction.

I learnt how they are the leading non-Big 4 service provider to the Japanese business community in Malaysia, & sat alongside the Big 4 in terms of IT systems.

With audit being mandatory in Malaysia for every incorporated company under Malaysia Companies Act, it was explained how this made the "audit" a commodity, with clients looking for the cheapest price. Russell Bedford firms promote quality, not 'cheapness'.

In areas where audit thresholds are increasing & audits are becoming no longer obligatory, accounting firms look to differentiate with other services, replacing lost revenue from previously provided audits. Here, in Malaysia, due to completely the opposite (audits being mandatory for corporations regardless of turnover), the problem is that the audit becomes a burden for clients & they shop for lowest prices -meaning quality accounting firms must replace audit work with other value-added services.

Author: Stephen Hamlet

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