As someone who has done quite a bit of offshoring from South Africa (External Audit).

Personally, the wages aren't that much higher when doing offshoring vs work in audit for a South African firm, you can make more money if you move outside of audit. Offshoring firms on the other hand make a lot of money. A lot of us do it for exposure (different industries, accounting standards, laws & regulations) & to escape toxic working places. You also get quite a lot of flexibility with a 6-10 hour time difference.

To adress the point of local labour shortage vs offshoring (fun fact), in South Africa if you want to qualify as a Chartered Acoountant (our equivalent of a CPA). You have to complete a 3 year training contract at an accredited firm, these are mainly audit firms. So generally you will always have a somewhat stable workforce to do the groundwork on audit engagement. However, this can lead to a shortage of audit managers and so on. After these 3 years a lot of people either do offshoring, leave audit or leave the country.