Nothing new here. Big 4 will still see thousands of applicants and will have no issue getting new staffs. I don't have exact numbers but ratio is around the rule of 5. 1 partner with 5 manager and 5 staff for each manager. Bigger clients will have different compositions.

I think all big 4 wants to reduce low quality clients and keep the big ones. Clients like Maybank and Petronas easily eats up 50 staffs (audit, tax and consultancy).

Most consulting/ project have this issue. Budget will depends on the charge rate of the staffs. Let's take example of:
Associate: RM100 per hour
Manager: RM500 per hour
Partner: RM1000 per hour.

So if the audit fee is only RM10k and assuming 20% margin/ consistency. We are looking at:
Partner: 2 hour (RM2000)
Manager: 5 hour (RM2500)
Associate: 35 hour (RM3500)

That's average of 1 week job? Most big4 rarely charge full OT to the time charge as most clients won't pay.

And for some reason, on paper it sounds like they assume a manager can do 5 associate workload.

I do believe that there is a calculation model for Any Audit firm in earning the expected Profit Margin (Those Big Boss mind set or event Global Partnership Requirement)

Extracted from MIA Accountant Today



By the way, the data is related to the FY 2019.

If Based on this calculation, if a audit firm need to have at least 25% Net Profit Margin, they will need to take into account of their own Costing (Staff cost, rental, Leasing of printing machine/laptop, water, electricity and etc).

Bigger firm might have much more complex model and based on this in calculating the Charge out rate as per above mentioned.

For example, the charge rate of below:

Junior Associate RM 150 per hour
Senior Associate RM 250 per hour
Assistant Manager/Manager RM 400 per hour and etc.

Noted that in Big 4 or even Mid-Tier, the boss or Manager don't even tell you the target Revenue needed, you just do the work as per instructed. (Perhaps you generated more than the Revenue that you are really targeted for).

From my Senior Manager from one of the Big 4, "Audit Industry is not a place that you come to earn a lot of Salary unless you sit inside the Room (Partner/Director)".

In the end, Audit is also a business where you boss want their Profit Sharing, low recoverability rate from the engagement will cause less profit sharing. (Somehow unhealthy for long term, that why i would foresee that less applicant will join into Audit, its just a matters of Time.

Look at KPMG Singapore increase the Paid scale of Fresh Graduate by 20% as i think that no 1 wish to join into Big 4 anymore.

Comparing western and Asia is not easy and there are many factors.

My perspective it's easier to budget due to:
1) In the west, clients quality are generally better. Clients are bigger and can afford to pay more audit fees. This leads to more resources from audit firm and client with higher profits are also easier to audit due to higher materiality. Audit staffs can focus on analytics than manual work.
2) Currency exchange is better leading to easier targets
3) Audit staffs also higher quality coming from better schools
4) As most western clients have higher standard of governance and culture, the audit work is easier too. Eastern culture tend to be harder for auditors

Asia is developing country as compared to mature western so there are many other aspects. A key development is that in the west, only the bigger companies need to be audited so all the audit work monopolised by big4. In Asia or Malaysia for example, even small sdn bhd needs to be audited. This creates a lot of job for smaller audit firms. There is a law not too long ago that provided some exemptions but tax law may be contradicted. I don't really follow the news anymore but in Asia the focus is still more on quantity than quality.

Another point to note is that people who started the career or trained in Asia environment find that the western audit processes/works are relatively more lenient as compared to Asia counterparts simply because Asian is more kiasi and want to check everything if not most of the thing to be safe 

Then the Asia boss will argue that you can see we dont have major fraud cases here whereas you would have seen a lot of cases elsewhere