As the government considers proposals for corporate governance and audit reform, the focus remains on audit and the role it plays in society. Companies, auditors, directors, investors and the regulator all have a part to play in increasing confidence and trust in corporate reporting, but what are we doing to make a difference? I’m clear that as an audit firm we have a responsibility to continually invest in strengthening the quality of our audits.
That’s why, in July 2019, we launched our Programme to Enhance Audit Quality (PEAQ) with an additional £30m annual investment in people, training and technology, and a reinforced focus on culture and quality control. Our aim was to ensure our commitment to quality was reflected in everything we do. So, two years into the programme, what progress have we made?
The right structure and governance
I was clear that for PEAQ to have the desired impact we needed to create an Audit practice, with a distinctive culture and governance focused on driving audit quality. So we did just that. We started by establishing an Audit practice with a singular focus on external audit and audit-related services. In a further important step to strengthen the governance of our Audit practice we created an Audit Oversight Body, chaired by Philip Rycroft, one of our independent non-executives. This Body met for the first time in November and is providing valuable oversight and challenge, over areas such as partner remuneration and our Audit strategy.
A distinctive culture
Our people are at the heart of delivering high quality audits. That is why we are focused on creating the right culture for our audit teams. An early priority was to identify the critical behaviours that support audit quality: ‘Team first’, ‘Challenge and be open to challenge' and ‘Take pride’. Everyone across our Audit practice is expected to demonstrate the same core behaviours we believe are central to audit quality. We’ve embedded these into everything we do, including our training and how we evaluate performance. I said two years ago that we needed to place a quality focused culture at the heart of Audit. I’m really pleased with the progress we’ve made and how our people have embraced these changes.
In the first year of PEAQ, we recruited an additional 500 experienced auditors and in the last year we hired a further 430. Throughout the pandemic we’ve continued to recruit graduates too, ‘virtually’ bringing on board more than 700 since last July.
The right people
Having the right people with the right skills is crucial to delivering consistently high quality audits. In the first year of PEAQ, we recruited an additional 500 experienced auditors and in the last year we hired a further 430. Throughout the pandemic we’ve continued to recruit graduates too, ‘virtually’ bringing on board more than 700 since last July. Collectively this meant we entered this year’s busy season with significantly more seasoned auditors than we did last year.
As a firm we’re committed to widening access to our firm and the profession. I’m delighted we’ve expanded our Flying Start Degree Programme this year with Queen Mary University in London joining the programme for September 2022 applications. This programme allows people to earn while they learn, combining a BSc in Accountancy with paid work placements. This offers a new route into the profession working with a University known for its work to support social mobility.
Enhanced quality control
We have worked on the support and guidance we give our teams during an audit to more thoroughly assess the quality of our work, so that we continually improve what we do and how we do it. As an Audit partner, I know how valuable this support is. We established a network of Chief Auditors across all of our business units and offices to support our teams with any technical questions that arise, and constructively challenge their work. And I’m also proud of a 65% increase in the number of people in our central Audit Risk & Quality team from 2019 to today. These initiatives have made a real difference to the expert guidance provided to our teams across the country, helping to enhance the consistency and quality of our audits.
Some of these changes may not sound dramatic. Yet, each step is important and, taken as a whole, this represents a significant transformation in our approach to audit. This is down to a huge amount of hard work and dedication from our teams. We’re committed to audit reform and to performing consistently high quality audits. While I recognise there's still more work to do, I’m proud of our people and what we have accomplished since establishing the PEAQ.