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.
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.
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.
“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.”