Ten per cent of them have no formal commerce, economics or business degree.

Instead, they sport qualifications in range of areas from environmental science and Mandarin, to counter terrorism and social work.

"The challenge now is making sure that because they are different they don't slip between the cracks," Mr McLennan said.

"We need different training, to interact and support them differently."

Accounting firms’ 2016 graduate intake

The number of graduates employed by large accounting firms dipped marginally this year, by five per cent. The nation's biggest firms on revenue have, or expect to, make offers to just over 2000 graduates in 2016.

However, the number of graduates recruited by the big four firms - PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG - surged by 10 per cent.

KPMG upped its intake by 88, while EY boosted its graduate numbers by 64, to 450.


Deloitte is the only Big Four firm expecting to hire less graduates this year than last.

Duncan McLennan, KPMG head of audit says there is more scope for staff to innovate in large firms these days.

Big four accounting firms rank among the country's largest graduates employers. Any one of them alone hires almost as many as the next seven largest accounting firms combined.

KPMG has deliberately sought out graduates with stronger mathematics and information technology skills, as data analytics becomes central to the audit process.

"The auditor of the future is going to need a lot more of that," Mr McLennan said.

The shake-up in graduate recruitment is the latest in a series of radical changes in KPMG's audit division in recent years driven by continued margin pressure.

PwC's Tom Seymour says 55 per cent of revenue raised comes from personal or corporate taxes. Dominic Lorrimer

"The way we conduct company audits today is completely different from five years ago," KPMG head of innovation Ken Reid said.


Audit is a black box at the best of times. But big audit firms are quite secretive about new developments in an effort to prolong any competitive edge.

The shift in hiring practices was first identified in The Australian Financial Review's Accounting Partnership Survey.

Technology replaces offshoring

New demands and consumption patterns are forcing a lot of professional services organisations to transition their workforces.

PricewaterhouseCoopers added a new module to its tax training in January in a bid to improve staff's technology skills.

"Taking our entire workforce up the technology skills set is a key challenge," PwC head of tax Tom Seymour said.

Mr Seymour expects automation to replace a significant number of man hours on Australian tax jobs performed offshore.

"The real game is technology, automation and data analytics. That's rapidly going to replace offshore centres and better suits our model," Mr Seymour said.


About 10 per cent of total man hours in PwC Australia's tax division are performed offshore. A substantial proportion of expat tax returns are done off shore.

However, Mr Seymour said the great constraint with offshoring is that the information is sitting on clients' enterprise resource management technology systems, on their desk, or in their minds.

"You can only achieve so much efficiency because you need it connected with a client," he said.

"You need a really tight process to offshore. If you have that, you can automate it using technology and do it at the geographical site of the client."

The movement of audit into the technology space is one of the most disruptive factors facing the profession.

"Our young people are more capable of being innovative generally than older partners like myself," Mr McLennan said.

Similarly, there is more scope within the Big Four accounting firms for staff to be innovative and experiment, he said.

"There is a lot of change, and we're up for hearing new ideas," Mr McLennan said.