Quote:
Originally Posted by Unregistered
So yes, 4k for scrubs to do work monkey can do is alright. But we dont want to be a profession that does things even monkeys can do. But in order for us to improve, it becomes a chicken and egg problem. Raise salaries > entice more ppl to join > quality improve. But the first thing that needs to be done is raise salaries for these monkeys before it can attract better people.
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Not possible. This is structural in nature, due to the mandatory and backward looking nature of audit work. It is not advisory or value creative. It is there to tick a regulatory checkbox.
The only way to increase margins for the top earners is to keep the cost of services low. That means auditors' pay.
Other professional services charge based on percentage of transaction value, or unit of time cost. Clients are willing to pay for these, because the end product is bespoke, unlike audit services, which is commoditized.
If you hire a lawyer to solve a legal trouble, you hope for some favourable outcome but you never know what it will really be. Same with consulting. Hence, there's bargaining power on the service provider's part. But if you hire an auditor, you know and expect exactly what product or outcome he's supposed to deliver. The bargaining power is on service purchaser's part.
Big4 engagement fees are stuck in a weird place because there's external pressure on overall audit fees, and internal pressure to keep cost low.