ICAS issues Corporate Auditor report
ICAS has issued a roadmap to the Corporate Auditor profession.
In 2020, ICAS established a Working Group (WG) to consider Sir Donald Brydon’s recommendation to establish a corporate auditing profession based on a core set of principles. The WG which comprised representatives from audit firms, business, and academia explores in its paper ‘A roadmap to the Corporate Auditor profession’ how this could be implemented in practice.
The WG establishes that the core principles for a Corporate Auditing Profession should be:
- Auditing/assurance wherever applied is a specialist activity requiring high standards and skills consistently applied.
- Such skills can and should be acquired through a formal training programme provided by a recognised expert education establishment accompanied by appropriate practical experience.
- Successful completion of formal training in audit/assurance skills and processes would be attested by formal assessment and lead to the award of a new professional qualification of “Corporate Auditor” (Caud).
- The Caud qualification will be THE senior specialist qualification in audit that is allied to core subject matter skills such as: financial reporting, cyber security, environmental information and others. To qualify for work in the audit and assurance of specialist areas will require core skills in these areas in “addition to” the Caud qualification; the Caud qualification alone will not suffice.
- All corporate auditors will be subject to appropriate ethical and independence requirements.
- A Caud qualification will once acquired, require continuous professional development (CPD) to ensure maintenance of skills and professional competence.
- The Caud qualification can in the first instance, emanate from within the existing professional bodies that offer financial audit qualifications though may well in time sit within a new professional body.
- The WG then sets out a three-phase approach which it believes provides a clear roadmap to enable Sir Donald’s recommendation to be implemented in practice.
Phase 1
Focus on the current financial statements’ auditor and suggest improvements that could be made to the existing framework to enhance audit quality and reputation of, and trust in, auditors of financial statements.
Phase 2
Focus on how to equip non-financial statement subject matter experts who would wish to carry out assurance work with applicable skills in assurance and related matters to enable them to undertake assurance engagements in their respective areas of expertise. Ensure that they are equipped to carry out such assurance work in accordance with an internationally recognised assurance framework as well as (potentially) to be better able to assist in an audit of financial statements.
This phase could be accomplished by the extension of the education, qualification, and regulation of the current accountancy professional bodies to embrace the wider remit of a Corporate Auditor.
Phase 3
In time and if required or desired, establish a new corporate auditor professional body that educates and qualifies those subject matter experts that wish to carry out assurance work in their areas of expertise.
Phases 1 and 2 need not be undertaken sequentially and in fact there would be considerable benefit if they were to commence at the same time.
BEIS Consultation
The WG notes that the Government has proposed in its consultation paper “Restoring trust in audit and corporate governance” (March 2021) to take forward Sir Donald Brydon’s recommendation to establish a new corporate auditing profession. The sequencing of actions envisaged in the WG’s paper is different in some respects to the proposals in the Government’s consultation paper but the WG considers the end result would be the same: there would be a Corporate Auditing profession that produces high quality audit and assurance of both financial and non-financial information and would be an attractive career choice for exceptional talent in the years to come.