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Making the Future of Audit add up

For us as an Audit business and the profession in general, it's been a challenging year. Recent scrutiny has shown that there is confusion about and dissatisfaction with the scope, purpose and performance of audit. That’s why we launched our Future of Audit initiative.

Setting the scene

As a profession, we have not been sufficiently responsive to the changing needs and expectations of our stakeholders. We are now at a watershed moment, and we recognise the need for significant change if our work as auditors is to remain relevant. In November 2018, we opened our Future of Audit initiative to speak directly with those who have an interest in the audit, listening to their thoughts on how auditing needs to evolve for the future.

It is clear from the public debate and the views we actively sought on the future of audit that there is a lack of consensus about the scope and purpose of audit as it stands. Among the numerous views and ideas that emerged through our discussions, one of the most significant insights was the investment community’s feedback on today’s audit, with only 41% of those surveyed feeling that it meets their needs.

What is most concerning about this finding is that the audit is designed to give shareholders - those providing financial capital - comfort that the information they receive from the company can be relied upon for effective decision making.

How we helped

Through a programme of large events and small gatherings, in person and online, we opened up a discussion with a range of organisations and individuals who have an interest in making the audit fit for the future. From business leaders to investors, members of audit committees to academics, we heard many different views and perspectives on how the audit could evolve.

There was real enthusiasm from attendees at our roundtable events, at which we had over 150 participants, and from those who responded to the survey about opening up the discussion, and many shared valuable insights and perspectives. In our survey, launched in Spring 2019, we heard from 175 investors and 198 business leaders.

In the time since the initiative was launched, Sir Donald Brydon opened his independent review into the quality and effectiveness of audit. We have shared the output from our Future of Audit initiative with him and hope it will provide a valuable contribution to the ongoing debate.

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“The UK has a reputation globally for having some of the highest standards for corporate reporting, auditing and governance. This is why I, and many colleagues in the profession, have been proud to spend our working lives in the sector.

But it is clear that for the UK to remain a leader, the audit and the profession at large need to change.”

Hemione Hudson, Head of Audit

Making a difference

We shared the views and opinions through our recently published​ Future of Audit​ paper, which we hope will contribute to the lively and ongoing debate about the future of audit and the profession.

There are a number of areas we highlight in the report as opportunities for change and to provide some ideas on how the profession can address some of the concerns that emerged.

These opportunities include the following:

  • Strengthening the clarity and relevance of corporate reporting, and enhancing the reporting and auditing of a company’s internal controls
  • Creating a single, coherent piece of company reporting that provides more insight into the future prospects of the company - including the scenarios in which the business model could fail
  • Expanding reporting and assurance to cover critical performance measures
  • Providing additional assurance over the companies that need it, without expanding the statutory audit for all
  • Continuing to develop and roll out new technologies to improve the effectiveness of audits
  • Increasing investment in the training, technology, and people required to conduct consistently high quality audit

For more information please visit our ​Future of Audit​ website, where you can download a copy of the report and find out more.