An explanatory review of audit market concentration and auditor workload in Malaysia

Abstract

The purpose of this study is to provide updated information and facts about the Malaysian audit market concentration and auditor workload. The global auditing services market is presently dominated by a group of four audit firms which known as Big 4; namely Deloitte, PriceWaterhouseCoopers, Ernst & Young and KPMG. The audit industry in Malaysia offers several exemptions, as observed that two of non-big 4 audit firms succeeded to make their place into the Malaysian top 4. The study examined the audit firms share based on the number of audits and included all Malaysian public listed companies from 2012 to 2016. The findings indicate that the Malaysian audit market falls into the category of loose oligopoly and controlled by 8 audit firms. It is noted that the market share of the Big 4 in Malaysia have been reduced over a five-year period 2012-2016, and these firms mainly focusing more on large or more established clients. The examination related to auditor workload suggests that there is a decreasing trend in the workload of individual audit partners; on average the Big 4 firms staffing ratio is lower as compared with non-big 4 which may indicate that Big 4 partners have less workload. The study is useful for policy makers and regulators to better analyze the audit market concentration and workload in Malaysia.

Accounting firms’ talent management practices: perceived importance and its impact on auditors’ performance

“…The key challenge faced by the profession in Malaysia is many practitioners have difficulties in complying with increasingly complex audit performance standards coupled with high staff turnover due to high demand from non-public accounting sectors [Malaysian Institute of Accountants (MIA), 2018]. This shortage of manpower has led to high workload for existing auditors (Raza et al , 2019). A joint study by the Association of Chartered Certified Accountants (ACCA) and AOB in 2013 found that many auditors in Malaysia want improvement where remuneration and WLB are concerned.…”