Audit moves to the front of technology

By Jann Brown CA, ICAS President

13 January 2015

Who would have thought that the world of audit could be brought crashing together with the glamour and excitement of Formula One? Yet the link-up recently announced between McLaren and KPMG brings the learning of one of the world's leading motor racing teams to the forefront of the accounting profession.

The predictive analytic techniques from Jenson Button's pit stops will now be used to make audit more forward thinking than backward looking.

It is not just KPMG that is seeking a technology solution to transforming audit. All the big firms have their own programmes for using digital and data to change what they do. One of the safest New Year predictions is that we will hear much more of these transformational changes in 2015.

Tools that extract and analyse data may replace a lot of the less rewarding grunt work of audit. This may bring the disruption and the opportunity that forces the profession to reinvent the audit and enter a new era of greater and more obvious value for clients.

It is clear that for some in Government and regulation, the audit of smaller entities is seen as red tape rather than added business value. That's underlined by the momentum to raise audit thresholds, removing the requirement for many smaller companies to conduct an annual audit.

What other predictions can we make for the profession in 2015?

The focus on how the profession deals with international tax is likely to intensify. The roughing up of PwC and Shire over Luxembourg-based tax matters by Margaret Hodge and the House of Commons Public Accounts Committee marks the early shots in a battle that will move to new fronts in the next 12 months.

The accounting directive will see the FRC outline a changed landscape for regulation in the UK. How much that will change our lives remains to be seen. What will the final decisions be on the splits between audit and non-audit services? The devil is in the detail.

Austerity and economic growth will be a key battleground of the general election campaign as we head to the polls in May. The electorate will decide whether Cameron or Miliband is the leader of our future economic prospects. But Farage and Salmond may or may not have their parts to play in deciding the outcome.

If the Conservatives hold power, the spectre of a referendum on Europe will focus the minds of all in the business community.

Our members in banking will get little respite from the torrid times in their sector. More eye-watering fines from regulators on both sides of the Atlantic, ring-fencing of investment banking and a new professional standards body will all push the boundaries of change.

What 2015 holds for ICAS

For ICAS, 2015 sees another chapter in our journey of continuous improvement.

We'll continue to strive to grow our student numbers; better serve our members wherever they are in the world; and carry the torch of ethics and integrity in the profession.

We'll watch with pride how our Foundation students perform as they take their first steps in learning accountancy and finance. Your generosity means that we've now been able to award more than 30 bursaries to remarkable young people.

Also in 2015, you will see the benefits of our investment in digital across the Institute as we launch new mobile services and keep improving the ease of the user experience for you.

In 2015 we will also welcome a new president, Jim Pettigrew CA, who takes office in April. It is incredible to think that we are already so far through my presidential year. But there's still plenty to do and so little time...

Happy New Year to each and every one of our 20,000 CAs.


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