ICAS vision for tomorrow's auditor
Michelle Crickett and Anne Adrain report on an event to discuss the future of audit, and the skills the sector will require going forward.
The “OLD model” of audit will not necessarily work in the future. That was the message from an event launching the joint report by ICAS and the FRC, Auditor skills in a changing business world. Held in London, the event was chaired by Melanie McLaren, FRC executive director, audit.
Richard Fleck CBE, chair of the joint ICAS/ FRC Audit Skills Steering Committee, said this was an international initiative, intended to develop a debate and not necessarily provide all the answers. Richard discussed the three skill areas identified as important for the audit team of the future of:
- business acumen;
- technological and data interrogation; and
- soft skills.
He called for a full debate on the way forward, acknowledging the challenges ahead.
What the panel thought
In the panel discussion, Will Smith, partner responsible for Deloitte’s UK Auditor of the Future Programme, said a Deloitte survey had found that “millennials” are not only motivated by an organisation’s performance, but also its values and contribution to society. He said the skills identified in the ICAS/FRC report are, potentially, attractive to millennials and we need to sell a career in audit in those terms.
Hywel Ball, managing partner, assurance, UK and Ireland, UK head of audit and UK board member, EY, focused on the rapid pace of technology. While this may have a negative impact on jobs, he said, there may also be opportunities to increase the relevance of the profession with a focus on new areas, such as the measurement of culture and trust. He also suggested a need to move away from standard audit processes and emphasised the importance of curiosity within the audit team.
Gary Pflugrath, IFAC director, public policy and regulation, welcomed the ICAS/FRC report, and acknowledged that it is unrealistic to expect one person to be trained in all the skills required of an audit team. While the report focuses on the largest multinational audit clients and the largest audit firms, he suggested that training needs at different levels of the audit market should be considered.
Nick Land, a non-executive director of Vodafone and Ashmore Group plc, added a business and regulatory perspective. He said today’s audit is better and deeper, albeit narrower. Businesses would be looking for more assurance, but not necessarily a different type of audit.
Nick said he was concerned that standard setters cannot keep pace with technological advances and, while the report calls for more principles-based standards, he was doubtful as to whether this will happen and firms need to find a way of overcoming this challenge. Nick also suggested that a radical change to the firms’ staffing models, and the possible emergence of new players in the audit market, present big challenges for both the firms and the professional bodies.
Staying ahead of the curve
The lively Q&A session demonstrated the need for all stakeholders to continue to engage in the debate and find a way forward. There is excitement and hope, but also fear, about the future. We need to stay ahead of the curve if we are to maintain a strong profession that can support the global economy.
Background to the report
Auditor skills in a changing business world, explores the vision of the auditor of the future.
The report was produced by a high-profile Steering Committee and builds on the independent academic research published by ICAS and the FRC.
The report calls for a debate on the future of audit and the skills needed to meet that vision. If audit is to evolve beyond the traditional financial statement audit, then the skill set of auditors needs to evolve to execute the audit of the future.
Download the report to find out more.