Finding the path to audit 2.0

In a turbulent world where just keeping up seems like a sprint, a small group of participants took time out to discuss the path to the future of audit and assurance. The discussions were an exciting start on the road forward, and the inevitable challenges likely to appear along the way.

The genesis for this Canadian event was an Institute of Chartered Accountants in England and Wales (ICAEW) AuditFutures initiative to address the future of the audit profession in the U.K that I attended last year. Working in collaboration with ICAEW staff, CPA Canada then engaged 35 participants representing a broad range of preparers, users and auditors, to discuss the ICAEW’s four part framework in a Canadian context.

Several speakers provided insights that encouraged participants to consider each of the four areas from a public interest perspective.

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The discussions highlighted the dynamics affecting each area, including:

  • As the public has greater access to a broader range of information in different forms and at different times, the demand for assurance, and the nature of that assurance, is moving away from once-a-year, objective opinions on historical, financial information towards more frequent, wide-ranging, value-added “views” on historical and future-oriented financial and non-financial information.
  • The skill sets of assurance providers need to move beyond just technical auditing and accounting to a broader mix of business skills so that auditors can leverage from their wide range of audit/business experience.
  • Tomorrow’s audit firms may need to be reconfigured to facilitate multi-faceted assurance engagement teams where assurance skills are the foundation and other business skill sets play a greater role.
  • Audit and assurance has the potential to become a more vibrant, innovative profession. The profession therefore needs to continue to attract a broad diversity of talent into audit and assurance.

The following provides a high-level picture of how audit and assurance is changing:

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As the audit profession grapples with how to move forward with the future of audit and assurance, there are evidently a number of questions that may need to be considered, such as whether:

  • Audit and assurance innovation can take place within the current set of independence rules;
  • There is a need for criteria, and auditing standards, to be developed to assist auditors provide assurance on different information;
  • There is explicit demand for new forms of assurance (i.e., who will pay for it?);
  • Audit firms are prepared to accept the risks that may come with innovating into new areas; and
  • The regulatory and litigation environment is conducive to audit and assurance innovation.

The event held earlier this year was only a starting point. The conversation may need to be broadened to bring more key stakeholders into the discussion. Doing so could help build momentum and enhance greater understanding. I hope that you bring your own perspective to the discussions.

Keep the conversation going….what is your reaction as you read the summary of the future of audit and assurance event? Do you agree that the audit profession has a strong future? What can we do to make it better?

Post a comment below; or email me directly.

Eric

Conversations about Audit Quality is designed to create an exchange of ideas on global audit quality developments and issues and their impact in Canada.

About the Author

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards, CPA Canada

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