Shaping the future of audit assurance

Chartered Professional Accountants of Canada (CPA Canada) and the Institute of Chartered Accountants in England and Wales (ICAEW) collaborated in a think-tank session to chart the future of audit and assurance disciplines.

On May 27, 2013, participants from CPA Canada and ICAEW held a daylong working session in Toronto to explore the future of audit and assurance in Canada. The 35 participants represented a wide range of practitioners, preparers and users of audit information.

The group explored the following areas about audit and assurance:

  • the role of audit in society
  • the evolving scope of the auditor
  • the nature of the people involved in the profession
  • the impact on the institutions performing the audit work
  • the impact on those using audit results
  • potential initiatives that could be launched to advance the audit practice in Canada

Future profile of audit and assurance

The collective group drew some notable conclusions in the areas of role, scope, people and institutions:

Role

  • The role of the auditor in today’s society is changing in terms of the nature of the data needing auditing and the audiences for this information. 
  • Two main drivers of this shift appear to be growing business complexity and public demand for greater transparency. 
  • Along with the increase in business complexity and more data being used by management for decision-making comes increased demand to verify that data and determine what data needs to be verified. As complexity grows, so too do multiple dimensions of risk. 
  • Validation needs to be done in a timelier manner, if not continuous, and needs to address multiple audiences, including the public at large.

Scope

  • As the auditor’s role expands, as mentioned above, there is an opportunity for the scope of the auditor’s focus to increase significantly. This expansion is multi-dimensional, going:
    • more deeply into the risk associated with financial dimensions
    • more broadly into non-financial areas such as sustainability, health and safety, and corporate governance
    • more forward-looking compared to the usual focus on historical information
    • Scope would also grow to include identifying auditable mechanisms for those areas of decision- making data beyond the financial aspects.

People

  • Increasingly, the major challenge is attracting individuals to the profession. The potential shift in the role and scope of the auditor provides an opportunity to make the profession a more appealing career option.
  • As audit professionals will need to meet broader expectations, organizations will need to attract individuals with broader backgrounds and more business acumen, and offer them more career path options under different business models.

Institutions

  • Firms will need to redefine services being offered by engaging other disciplines such as engineering and economics, and partnering with other providers to deliver a robust service offering.

Next Steps

Four themes emerged in the discussions on next steps to move the initiative forward:

Building momentum toward understanding the future role of the auditor

The objectives of this initiative would be to identify and consult with key user groups to better understand their emerging and different assurance needs, and develop profession-wide responses to those needs.

Attracting talent to the profession

This initiative would explore the changes that would help attract the “right” people to the profession, recognizing the continuing need to attract highly qualified people with changing skill sets and competencies, and the impact of unification of the accounting profession in Canada.

Developing thought leadership in areas of concern

Using a research-based approach, CPA Canada could sponsor the development of thought leadership publications on issues of importance to the members and the public in general, including social conscience topics and managing reputational risk.

Enhancing the profile of the audit profession

In this initiative, the focus was on how to invest in technology and share business best practices as a profession to enhance the relevance and meaningfulness of the audit.

Additional Resources

Audit Futures Project — Institute of Chartered Accountants in England and Wales (ICAEW)

Highlights

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