Call it “future shock” for audit.
A new Thomson Reuters Checkpoint report minces no words in declaring that too many CPA firms are lagging in the very mainstay of the profession – audit services. And if CPAs are to retain their status as trusted advisors, they have to embrace a whole new way of providing audit services.
“Advances in technology and the massive proliferation of available information have created a new landscape for financial reporting,” Alan Anderson, CPA, founder of ACCOUNT-ability Plus LLC and executive director of the Rutgers AICPA Data Analytics Research Initiative, said in a prepared statement. “To successfully impact the future of audits, firms must understand the key challenges currently facing the audit profession so they can identify the needs that must be met by the audit of the future.”
According to the report, 4 Keys to the Future of Audit, “many firms do not realize their audits are living in the past.” Just because their audits are paperless doesn’t mean those firms are modernized and future-ready.
While audit delivery has changed, “nothing about the audit process itself has changed along with it – thus, the same systematic inefficiencies are still present,” the report states. “Furthermore, auditors continuously fail to use technology to better understand a client and their business, the industry, and as a tool to enhance curiosity.”
So, what are these challenges that face the future of audit? They can be grouped into four categories: quality, innovation, talent, and relevance.
Here are the key takeaways:
1. Quality. It’s more than following a checklist. Quality is embedded in the very culture of a firm. From knowing the client’s business to their industry, professional auditing standards, and how audits should be performed, quality is comprehensive and continuous. The focus on quality and purpose inspires good auditors.
About Terry Sheridan
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.