Talent crunch hits Big Five audit firms as CAs opt for safer avenues
The Big Five audit firms in India are facing a talent crunch. A regulatory clampdown and a higher number of “relatively safer” career opportunities elsewhere are pulling chartered accountants (CAs) away from the audit profession.
A senior partner at a Big Five firm told FE that the auditing verticals in top firms are operating with 20% lower staff than the required strength. At present, the top five firms have around 12,500 people in their audit function.
“The amount of work is increasing every year but the staff strength is not growing as fast. Although we need to increase the capacity to handle the additional work and deal with the regulatory oversight, getting the right workforce has certainly become a challenge,” said audit vertical head at a Big Five firm.
Another partner in the same firm said that the talent crunch is largely due to heightened regulatory scrutiny and because of the expanding opportunities beyond the traditional audit. “When I completed my CA in 1980s, there were fewer avenues. But young CAs today have a vast number of opportunities, and unless somebody is passionate about auditing, most of them usually land up somewhere else,” he said.
What makes the matters worse for large audit firms is that the country is now producing more CAs than ever. For instance, the number of CAs who cleared the final exam in 2023 stood at 12,326, which denotes a pass percentage of 13.8% – much higher than 2% pass percentage a few years ago. “The pass percentage for CAs has improved considerably but we are not just looking for simple CAs. We want CAs who have the right aptitude and highest ethical standards,” said a partner at another Big Five firm.
In terms of all companies whose equity shares were listed on NSE (main board) as on March 2024, the Big Five Indian audit firms handled 580 assignments of 1,961 companies (for which auditor details were available for 2023-24). The number of assignments were 3.2% higher than the previous financial year.
Despite the inhibitions in joining audit firms, a partner quoted above said that a large proportion of CAs are still opting to audit work during their articleships. “The challenge also brings significant opportunities for young auditors. The increased investment by large firms in technology and upskilling reflects a commitment to future growth. Being an auditor is not just a career but a calling — we are an extension of the law, offering unique chances to engage with top management, board members, and audit committees,” the partner at the second firm said.
Source: GWFM Research & Study