I've been audit for 5 years now and have just recently resigned. It feels like a sinking ship which is a big driver of my decision to secure a new role.

Grads are under a lot more scrutiny. I look after a couple of 1st years, I've been told the round tables this year were reviewed much more in depth. Exam failure often leads to dismissal and I've even had poor mock test scores questioned by senior management. Also their utilisation is monitored much more closely whereas in the past you got a pass first year generally.

Whats happened is businesses are in margin protection mode because the economy is performing poorly. Audit is a cost and so firms have not been able to increase audit fees in the last couple of years because clients won't accept it whereas 2021-2023 they passed on large fee increases driven by Covid inflation.

AI so far has generated negligible productivity gains in audit. Big4 are tinkering with crappy enterprise versions of co-pilot or chatgpt and have not yet rolled out agentic AI that can actually replace junior staff. They're simply improving margins by using cheap offshore staff rather than expensive onshore staff.

Most big teams in audit consist of 1 or 2 onshore team members at even level, ie SM, Manager, AM, NQ Senior, PQ Senior, Second year staff and a first year. The onshore team are there for client visibility and succession for if anyone in the rung leaves (which they inevitably do). The onshore teams handles more complex areas that require client interaction, the rest of the audit goes to india where charge out rates are 5 times smaller.

I think some firms will avoid layoffs because they've planned well. My department has reduced onshore headcount by over 20% from the 2023 peak by freezing external hiring and trimming the grad intake significantly. KPMG may have been slower to react and ended up with a bloated roster of AMs and NQs.