Bang your drum
James Roberts calls on the profession to do more to sell the value and the success of audit to business and the wider world.
In coming to the end of my three-year term as chairman of ICAEW’s Audit & Assurance Faculty, it would be relatively simple to look back at what has been a period of accelerating change in the audit environment and to reflect on the merits of audit reforms and the benefits of technological innovation.
Reforms in audit have resulted in new ethical and technical standards and technological innovation has led, for example, to increasingly widespread use of data analytics. These changes have stimulated competition and helped to drive innovation in the use of technology by the larger audit firms. At the same time, extended audit reporting has given more insight to users of financial statements of the biggest companies.
In the smaller company segment of the market the increase in the audit exemption threshold reflects the government’s notion that audit constitutes a burden on business – a notion that ICAEW has lobbied hard to correct. The effects of audit exemption need careful assessment and ICAEW supports the government’s commitment to doing this.
A cogent case
In light of this, the case for audit needs restating. In all of the furore over change, the fundamentals often get lost in debate over detail. The point of what we auditors actually do – for our clients and in the public interest – can be forgotten. It is important that professions can express their purpose and their value to society. Ask any doctor what she or he is about and you get a cogent response. Auditors should be able to produce one.
Any auditor, partner or audit trainee should be able to explain what they do and why – to business people and to other stakeholders. The answer may vary, depending on the characteristics of any particular business, but there will be common threads. It seems to me that we need to “sell” audit in this way to demonstrate our value and, in a sense, to justify the privilege of being a professional service that is largely required by law, rather than bought purely by choice.
Find out more
Members of the Audit and Assurance Faculty and subscribers to Faculties Online
To read the complete article, subscribe to Faculties Online or join the Audit and Assurance Faculty and get access to this article in full, plus all future publications, events, webinars and services.