With significant changes continuing to impact the audit industry, the second article in our ‘The Future of Audit’ series explores the skills that will be essential for the future auditor and how this will benefit our clients.
The auditing landscape has seen significant change in recent years with the aim of improving audit quality and closing the “expectation gap” between what an audit is set out to achieve and what stakeholders perceive the aims of an audit to be. The main areas which have seen significant change include auditing standards and regulation, technology advancements and Environmental, Social and Governance (‘ESG’) reporting.
Against a backdrop of significant changes highlighted above, the role of an auditor has evolved and will continue to transform over the coming years. Here are the skills and competencies that will be essential for auditors in the future:
Perhaps one of the most important skills for both current and future auditors is being able to wield technology confidently and competently to your advantage. With the rapid pace of change in the tech industry, using the latest tools to dig deep into data and automate key processes will shift the focus of the role even further away from churning through large quantities of information.
Advancements in generative AI are expected to push this even further, with the future auditor focussing on analysing the data outputs, reviewing AI reporting and providing more in-depth insights. Data analytics will play a crucial role in gaining an understanding of a company’s financial position, performance and risk factors. By leveraging advanced data analytics, auditors will not only detect errors and fraud more effectively, but also provide valuable insights enabling businesses to make more informed decisions.
Technological advances in the audit industry have been explored in more detail in part 1 of this series where we examine the potential for technology to dramatically change the way audits are carried out.
A key part of the audit role, both present and future, is being able to communicate and collaborate effectively with clients, regulatory authorities, and internally within the audit firm. A future auditor will not only need the analytical skills to interpret data, but also the ability to explain and communicate complex results in a clear and concise manner, identifying what this means for the business and how clients can take this forward.
Ethics has long been a core foundation of the audit profession and will remain a crucial part of it as more complex ethical situations arise. Not only will future auditors need to consider the ethical dilemmas of conflicts of interest and potential fraud (which is more easily identified using new technology and systems), the ethics surrounding the use of new technology (in particular artificial intelligence) will present further challenges.
Auditing standards and regulations have seen significant updates in recent years, which go some way towards addressing the challenges created by more sophisticated accounting systems, with an increased focus on systems and in particular general IT controls and fraud. As technology develops further and businesses face new challenges, we expect that other standards will continue to see regular updates in response to changes in the way clients operate, the impact of wider economic factors and the emergence of new or evolving opportunities and challenges. The future auditor will need to keep pace with the changing compliance requirements, which are essential both to the auditing profession and individual businesses.
Whilst ESG disclosures are currently only necessary for large companies, it is not unreasonable to assume that the scope of companies required to make these disclosures will increase. Growing concern over sustainability and the impact of businesses on both the environment and their wider communities will likely see future auditors expanding their reviews to include the audit of ESG disclosures. Understanding and evaluating the ESG risks and opportunities will be an important focus in order to highlight the potential impact on a business’ performance and reputation.
ESG developments will be explored in more detail in part 3 of this series.
The future auditor will be proficient in technology and able to utilise data analytics, AI and automation to provide real-time insights into a company’s financial position and ESG performance. Communication will remain a critical part of the role, as auditors will play a crucial role in helping businesses navigate a rapidly changing environment.
As the world of auditing continues to evolve, the auditor of the future will be at the forefront of driving innovation and accountability in the corporate world. If like us, you’re passionate about making an impact in the auditing field and want to be part of a forward thinking team, check out our vacancies.
With rapid technological and regulatory advancements, the auditing profession is expected to see significant change in coming years. At Lubbock Fine, we’re at the forefront of this evolution. For businesses seeking an audit partner who understands the importance of staying ahead of the curve, please get in touch with our Directors, Hazra Patel (hazrapatel@lubbockfine.co.uk) or Stephanie Turner (stephanieturner@lubbockfine.co.uk).
