Another week another crisis

19 August 2014

Anton's Account: Effective audit can provide assurance in these uncertain times.

These are troubling times. Just looking back over the past month, we have seen escalations in conflicts in Ukraine, Gaza and Iraq. These are conflagrations which have ripple effects far beyond national and regional borders. They have the potential to affect us all in a variety of ways - in our economies, our politics, and in the safety and security measures we must adopt on a daily basis. 

Last week, I read a report by the Institute for Economics and Peace which found that, of 162 countries assessed (including the UK), only 11 of these were not involved in conflict of some sort. More worrying still, the researchers said that the world has become gradually less peaceful since 2007.

While the UK has been largely free from internal conflict in recent years, involvement in Afghanistan and Iraq places it in the at-risk list. Even for those 11 countries like Brazil and Switzerland with low external risk, the potential for internal conflict and armed violence in Brazil and Switzerland's high rate of arms exports reduces their scores on the world peace index.

Add to this the potential for cybercrime and failures in our IT and information security systems in these increasingly connected times and we have a landscape that presents many challenges.

So what part can accountancy play in redressing the balance?

One of our main defences is an effective audit process, providing assurance over the risks and current issues facing modern business.  However, with the risks to which these modern businesses are exposed becoming more complex and diverse, how can we be sure that the current audit and assurance model is fit for purpose?

The Financial Reporting  Council recently issued its insight report Towards Clear and Concise Reporting encouraging the production of more succinct and relevant annual reports in recognition that users are placing greater emphasis on the front-half of the annual report, in other words, the narrative section.

This is helpful guidance but one must also ask, do we also need to push the boundaries of audit beyond the current accepted scope to take into account the many diverse and emerging factors which can affect business?

The credibility of these reports and stakeholder decision making will be enhanced significantly,  the more we allow the audit process to be applied vigorously and give it the prominence it deserves.

A huge call, you might say, but audit is an area of practice which has positive impact and effect in business, in politics and in many other areas of our public life, and it must be given its place.

We can and should apply the principles and practice of audit in everyday life and if we are to maintain clarity and respond appropriately to the many challenges we face, we must support and listen to what the auditors are telling us.

Audit is about keeping an eye on tomorrow. If we do that, we can be safer today.


  • Political landscape
  • Audit and Assurance

Previous Page