Big 4 Firms' Offshore Shared Service Center Labor and the Demand for U.S. Auditors
| dc.contributor.author | Salome, Sabrina Summers | en |
| dc.contributor.committeechair | Stein, Sarah E. | en |
| dc.contributor.committeemember | Pittman, Jeffrey Arthur | en |
| dc.contributor.committeemember | Vance, Marshall David | en |
| dc.contributor.committeemember | Acito, Andrew A. | en |
| dc.contributor.department | Business, Accounting and Information Systems | en |
| dc.date.accessioned | 2026-05-27T08:01:37Z | en |
| dc.date.available | 2026-05-27T08:01:37Z | en |
| dc.date.issued | 2026-05-26 | en |
| dc.description.abstractgeneral | The largest four U.S. accounting firms, commonly referred to as the "Big 4," have increasingly shifted portions of the audit work they perform for U.S. public and private companies to offshore shared service centers (SSCs). Employees in these offshore SSCs, which are owned and operated by the firms, perform audit procedures under the supervision and direction of U.S.-based audit teams, which retain responsibility for the overall audit. Although offshoring has become an integral part of the Big 4's audit service delivery model, little is known about these offshore workforces or the extent to which they are used in U.S. audits because firms provide limited public disclosure about their offshore operations. In addition, it remains unclear how firms' growing use of offshore labor affects the employment and wages of U.S.-based auditors. In this study, I use employment data for auditors working within the Big 4 firms to document substantial growth in offshore SSC labor between 2010 and 2023. Specifically, I find that offshore SSC employees accounted for less than four percent of Big 4 firms' total audit labor in 2010 but nearly nineteen percent by 2023. I also find that, within Big 4 firms, greater use of offshore labor is associated with lower employment of U.S. auditors, particularly among lower-ranking employees and in U.S. audit offices that perform less specialized audit work, consistent with more routine audit tasks being most vulnerable to offshoring. Finally, I find that offshoring is associated with higher wages for some U.S. auditors, but not the lowest-ranking auditors. While offshoring likely shifts the workloads of auditors across all ranks toward more skill-intensive and value-added tasks, not all auditors appear to be compensated for these increased skill demands. These findings contribute to our understanding of the growing role of offshore labor in U.S. audits, an area that has received little attention because of limited disclosures by firms. They also contribute to ongoing discussions regarding the U.S. accounting pipeline, which has become an important concern for practitioners, regulators, and educators because the number of accounting graduates and CPA candidates has declined substantially over the past decade. My findings suggest that this decline may, in part, reflect reduced demand for certain types of domestic audit labor due to offshoring. In addition, the findings suggest that not all auditors are compensated for the increased skill demands associated with offshoring, which may further discourage entry into a profession in which low pay is already frequently cited as a deterrent. | en |
| dc.description.degree | Doctor of Philosophy | en |
| dc.format.medium | ETD | en |
| dc.identifier.other | vt_gsexam:46881 | en |
| dc.identifier.uri | https://hdl.handle.net/10919/143160 | en |
| dc.language.iso | en | en |
| dc.publisher | Virginia Tech | en |
| dc.rights | In Copyright | en |
| dc.rights.uri | http://rightsstatements.org/vocab/InC/1.0/ | en |
| dc.subject | auditing; shared service centers; offshoring; accounting labor markets; Big 4 | en |
| dc.title | Big 4 Firms' Offshore Shared Service Center Labor and the Demand for U.S. Auditors | en |
| dc.type | Dissertation | en |
| thesis.degree.discipline | Business, Accounting and Information Systems | en |
| thesis.degree.grantor | Virginia Polytechnic Institute and State University | en |
| thesis.degree.level | doctoral | en |
| thesis.degree.name | Doctor of Philosophy | en |
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