Many companies doing business in Malaysia find themselves having to choose between the Big 4 audit firms or mid-tier audit firms as a providers of professional audit services. “Big 4” globally refers to Deloitte, PwC, EY, and KPMG, which monopolize the global audit industry. On the other hand, the mid tier audit firm in Malaysia are highly competitive in their pricing and, as such, make them highly popular among businesses. In this blog, we will break down the seven key differences between these types of firms to help you in choosing.
1. Firm Size and Global Reach
The obvious first difference that could be noticed between the Big 4 and mid-tier audit firms is in their respective firm size and global reach.
- The Big 4 firms are huge, with almost all parts of the world having branches. They have practically almost all countries around the globe and boast wide networks in other countries. Their respective clients can range from small companies to big multinational companies.
- Medium-tier audit firms, on the other hand, are smaller in scale but focus more locally or regionally. These are good firms that could also provide service for local clients, not as globally connected compared to the Big 4 firms.
Therefore, if your business operates internationally, you may want to go for the Big 4. To the local firms, however, a mid-tier auditing company in Malaysia can be a better and less costly alternative.
2. Variety of Services
The second most important difference between the Big 4 and the mid-tier firms is the range of services given.
- Big 4 firms have a variety of services besides audit and assurance, including consulting, risk management, and even forensic accounting. They can handle complex financial services for large corporations.
- Mid-tier firms tend to have more specialization in core audit services, tax, and advisory. While they may offer additional services, their range is typically narrower compared to the Big 4.
In other words, if your company requires services more than audit-related, Big 4 will be more appropriate. In the case of specialized audits, mid-tier audit firms can fulfill all the needs at much more attractive pricing.
3. Cost of Services
Cost of services is one of the most considerable factors businesses take into consideration when choosing between Big 4 and mid-tier audit firms.
- The Big 4 firms charge a premium due to their brand name, expertise, and global coverage. This means that their services are more expensive, especially for smaller organizations.
- Mid-tier audit firms were founded based on more affordable rates. They can offer great quality services at a fraction of the cost.
Therefore, if your business is on a shoestring budget, opting for a mid-tier tax audit firm in Malaysia could save your organization a significant amount, without sacrificing too much in terms of quality.
4. Base of Clientele and Focus
A difference can be seen in the nature and type of client a particular firm has dealings with.
- The Big 4 firms have amongst their clients very large corporations, multinational companies, and government agencies. They would therefore, quite naturally, focus on big clients requiring more widespread services.
- Whereas the mid-tier firms have a greater and stronger focus on SMEs, family businesses, and growing businesses; personal services are therefore afforded much more, and time and attention might be granted to each client.
A mid-tier audit firm might give smaller or growing companies more attention than a Big 4 firm, as Big 4 firms often prioritize their larger clients.
5. Personal Attention to Client Relationships
When discussing the debate between Big 4 vs. Mid-Tier Audit Firms comes to client relationships and personal attention, there is a different story altogether.
- Big 4 firms are more corporate in structure. With larger teams and multiple clients, your business may not get the one-on-one attention that you may want. However, the structured process ensures standardized work quality.
- Mid-tier firms pay more attention to details. They build good relationships with their clients because the partner is often directly involved in the audit process. You will be more likely to get in contact with senior professionals if you go into a mid-tier firm as opposed to a Big 4.
If you value personalized service and continuity with experienced professionals, a mid-tier firm might be your best choice.
6. Audit Complexity and Expertise
Complexity and expertise are two of the significant considerations that have to be made especially for such businesses that usually operate under very complex financial conditions.
- Big 4 firms tend to excel in handling complex audits. Their teams are made up of highly qualified professionals, and they employ the most advanced technology and techniques. For this reason, they are usually the go-to for audits needed by listed firms or those with large and complex financial structures.
- While competent, mid-tier firms do not have the same level of experience or resources to handle very complex audits. However, such entities are more than capable of dealing with audits that are less complicated and small to medium-sized businesses.
On the whole, if your business enjoys a straightforward financial structure, a mid-tier audit firm in Malaysia might offer the right level of expertise at a lower cost.
7. Reputation and Brand Value
The reputation and brand value of an audit firm could also affect a company’s decision.
- Big 4 firms do have huge brand value. Being audited by one of the Big 4 firms may add credibility and prestige, especially if your business is looking for investors or is considering going public. Their reputation often speaks volumes about them in terms of trust and recognition.
- While middle-market firms lack the brand name recognition of the Big 4, they have often built solid reputations within specific markets. In Malaysia, various middle-market firms stand out for their high quality, especially in terms of industry specialization.
Thus, from a prestige standpoint, many organizations will find that a middle-market audit firm in Malaysia provides all the reliability and value-add.
Conclusion
The choice between the Big 4 and mid-tier audit firms in Malaysia depends on factors such as the size of your business, budget, and complexity of the audit. From the Big 4 versus Mid-Tier Audit Firm comparison, it would appear that both have their advantages; however, this decision would rest fully on what your company’s needs are. For a small business, desiring affordable and personalized services, a mid-tier audit firm in Malaysia often proves to be the fittest option. If your firm needs international expertise, has complicated finances, or needs a recognized brand, then the Big 4 might be the best choice.
