Audit concentration in Bangladesh: global norms, local realities

Recent observations in an article regarding the Bangladesh audit market indicate that the top 100 audit firms conduct approximately 87 percent of audits—an overwhelming majority of statutory audits—with individual partners at leading firms reportedly signing off on as many as 388 audits per year.

At first glance, these figures may appear concerning to those unfamiliar with the operational realities of audit practice.

However, when viewed in light of global audit market norms, this phenomenon is neither unusual nor indicative of systemic weakness or regulatory failure.

Rather, it reflects the concentration of audit engagements within established firms that possess the expertise, resources, and quality control mechanisms to manage large audit portfolios effectively.

It is important to note that the article focuses specifically on statutory audits, rather than on tax or regulatory audits.

Under Bangladesh’s legal framework, tax audits are not conducted by chartered accountant firms as part of the statutory audit regime, and no formal category of “regulatory audit” exists.

In exceptional circumstances, regulators may appoint auditors to examine specific matters; however, such appointments do not constitute an institutionalised regulatory audit framework.

Audit concentration at the top tier is a universal feature of modern audit markets, not a regional anomaly.

In mature markets such as the USA, UK, and Malaysia, a small cohort of leading firms—most notably the Big Four—conducts the majority of audits for listed and high-value entities.

This concentration reflects a deliberate market alignment: clients with complex financial structures, high public visibility, or greater regulatory scrutiny naturally gravitate toward firms with proven capability, technical expertise, and established global methodologies.

A review of several countries, as shown in the table below, demonstrates the global dominance of the Big Four (KPMG, Ernst & Young, PwC, and Deloitte).

A recent academic study, cited in a 2020 PhD thesis from the University of Warwick, examined the Bangladeshi audit market and found significant concentration among leading firms.

Three of the Big Four—KPMG, Ernst & Young, and Deloitte—operate in Bangladesh (PwC is absent), collectively serving 16 percent of clients but accounting for 33 percent of audit fees, reflecting the complexity of their clients.

The remaining 256 firms serve about 84 percent of clients but only 67 percent of fees, as many engagements involve smaller organizations with lower fees.

Audit services in Bangladesh are presently governed strictly by professional ethics and regulatory requirements. Promotional activities are prohibited, and auditors are formally appointed at company annual general meetings under the Companies Act 1994. Consequently, the concentration of audits among KPMG, Deloitte, and leading local firms is transparent, ethical, and client-driven.

In conclusion, this concentration should not be interpreted as a monopoly or market distortion. It reflects a rational, quality-oriented market structure consistent with global audit practices, where clients naturally select firms capable of delivering the highest assurance and technical excellence.

The writer is a fellow member of ICAB and partner at Basu Banerjee Nath & Co., Chartered Accountants.