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David Cruickshank CA: A roadmap to the Corporate Auditor profession

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By ICAS

26 April 2021

ICAS Council member and Chair of the Qualifications Board, David Cruickshank CA, discusses ICAS’ recent paper ‘A roadmap to the Corporate Auditor profession’.

In December 2019, Sir Donald Brydon published his report on his independent review into the quality and effectiveness of audit. One of his key recommendations was that ARGA should facilitate the establishment of a corporate auditing profession based on a core set of principles. He further added that ARGA should be the statutory regulator of that profession and recommended that ARGA develops a coherent framework for corporate audit that includes but is not limited to the statutory audit of financial statements.

Following the publication of Sir Donald’s report ICAS established a working group to consider this recommendation which I was asked to Chair.

What was the rationale for ICAS undertaking this initiative?

We decided that Sir Donald Brydon’s recommendation was a serious proposal which merited further work. The working group focussed on how it could be implemented and that is what our paper is about. Our working group included senior members of the audit profession from large firms along with representatives from industry and academia.

The paper is relatively brief, and we hope easy to read. The final format reflects the healthy debate in the group over how best to execute this recommendation.

BEIS has evidenced its support for Sir Donald Brydon’s recommendation in its recently published consultation paper to establish a separate corporate auditor profession. In your report this is dealt with in phase three but you obviously believe that there is a more practicable means of achieving Sir Donald’s recommendation, is that a fair synopsis?

What is important here is the end result and I believe that is the same regardless of the exact sequencing of the execution step. We need to end up with high quality audit and assurance and an audit profession that is attractive to the top talent of the future, both for statutory financial audit and also for the wider assurance of non-financial KPIs and other subject matter as appropriate.

We have proposed a three phased approach based on ease and speed of execution. We believe that phases one and two could be implemented relatively quickly whereas we consider it will take longer to establish a whole new professional body.

Do you believe there will be market demand for non-financial statement corporate auditors? Are you already seeing a demand in industry given the increasing demands on corporates in relation to non-financial information?

Yes, we do. As we say in the paper, we have already seen a big growth in demand for assurance over non-financial KPIs. However, currently this is sometimes provided by the preparer of that information or by others who haven’t had a formal training in assurance and related matters, such as independence.

Recognising that businesses are being held accountable for a whole range of non-financial outcomes and that this is going to increase given stakeholder demands, now seems the perfect time to put in place a more formal assurance qualification, which will provide more consistency and higher quality information.

Do you believe that enhancing the role of both audit and indeed the auditor, will help to continue to attract top talent into the profession?

We have seen the development of specialist qualifications within tax and insolvency, and this has made those professions more attractive to new entrants. In a way, it’s surprising that there haven’t been the same developments for audit. There is a high correlation between the quality of a profession and the esteem with which it’s held by the users of its service, as well as public opinion and the quality of new entrants.

We believe we have been careful to strike the right balance between the steps necessary for the skills development and the assessment of those, with the need to avoid process and barriers that might make the profession unattractive due to the number and nature of the hurdles. For instance, in many cases, we envisage that assessments will be by means other than classroom type exams. This was the subject of much debate at our working group and the cause of redrafting of some of the proposals as we tried to get that balance here whilst staying true to the ambition of high-quality audit and assurance and a profession that is a magnet for the best talent.

Looking ahead 10 years do you think that there will be a separate audit professional qualification?

Yes, I do and as we worked through the proposals in our paper there was a growing confidence in our group that we could get this to work in the phased approach we have proposed. We all know that in any big change project the key is to break things down into manageable steps and then execute hard against those steps to get the desired change.

Read ‘A roadmap to the Corporate Auditor profession’ here.

ICAS issues Corporate Auditor report

By James E Barbour CA, Director, Policy Leadership

26 April 2021

BEIS consultation on restoring trust in audit and corporate governance - part one

By James E Barbour CA, Director, Policy Leadership

18 March 2021

2022-11-mitigo 2022-11-mitigo
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