Due to the covid-19 pandemic, the audit sector has experienced tremendous transformation, bringing fresh ways of thinking, views, and technical developments to light. This is true for most businesses but audits in particular since auditors have had to adapt to new ways of working alongside their clients.
The abrupt transition to remote and flexible working by audit firms and the companies they work with adds a new dimension to the already difficult task of adapting auditing to a rapidly changing corporate landscape.
As companies undergo digital transformation, their business models become more complicated, putting additional expectations on audit experts. However, new modes of working will provide significant benefits while also creating issues that must be addressed.
The Impact the Pandemic has Caused?
Businesses are expanding, and their business models are becoming more diverse. As a result, it is essential that audit firms have diverse skills to be able to service this, and there is a growing expectation of the auditors to have more understanding of technology.
The pandemic has influenced the entire audit profession. It has heightened the need to adopt new methods of working, culture transformation, and adapt to the latest technology.
- Working styles: Auditors went from visiting client locations every day to working from their living rooms almost overnight. Teams devised unique methods for completing tasks and interacting as a group as offices were replaced with virtual audit rooms, empowering teams to interact better, discuss, and cooperate to address client difficulties and reproduce dynamics that previously occurred in person.
- Culture: The auditing industry operates on an apprenticeship model, meaning emerging talent learns by coaching and implementation, both of which are more challenging to accomplish remotely.
The virtual environment prompted the development of new methods for coaching, managing teams, and providing feedback. It also fostered the development of virtual training modules, which provide on-demand learning and credentials via systems like badging.
- Technology adaptation: The digital transition is not new, but the pandemic has accelerated the testing and deployment of next-generation technology. Such developments were accelerated, such as smart glasses, a real-time communication tool that allows auditors to conduct inventory inspections and process walk-throughs remotely.
A New Model
Along with the previously mentioned changes, the personal attributes that audit companies seek in new team members will also change. Firms have always valued audit experts’ personal honesty and professional scepticism, and these qualities will remain important. However, in this new and rapidly evolving industry, auditors will need to gain even more profound business expertise, a strong interest in technology, and an agile attitude that embraces innovation.
The interdisciplinary strategy and changing landscape give audit companies immediate access to technical competence across all business sectors. This access to a larger firm’s knowledge resources, such as hedge accounting, valuation, cybersecurity, fraud, sustainability, tax, and corporate finance, is a benefit in offering high-quality audit services.
As firms become more complex, the ability to tap into broader speciality skills will become increasingly vital.
Improvements and the Future
As the industry has had to adapt, vulnerabilities have been recognised, reinforced, and changed to operate in the ever-changing environment we have found ourselves in recent years. As a result, improvements and future thinking have progressed in the following ways:
- Audit efficiency: Audit companies will strive to increase audit efficiency by utilising and investing in technology and resources that will allow them to provide quality audits within the specified timeframes.
Having the right personnel and technological resources to build audit procedures that can capitalise on employing artificial intelligence and data analysis technologies to identify risk areas improves audit efficiency.
- Changes in regulations/standards: It has been observed that audit firms are being driven to improve their quality as a result of regulatory changes and new requirements in accounting and auditing standards. This begins with knowing the client’s and investors’ needs.
- Examining forward and non-historical information: The future of auditing will be centred on non-financial data that may represent significant concerns, such as cyber security and climate change. There is the possibility of a drive to enhance audit work on forward-looking data and forecasting the future by leveraging predictive analytic techniques.
Auditors are no exception to how technology is affecting everyone’s lives. However, to remain ahead of these changes, businesses must adapt their thinking to welcome any changes and begin projecting developments important to their sector.
If you have any queries regarding the above information, please do not hesitate to contact a specialist Accru member today.