Audit is a people business. While increased regulation and technology change the demands on auditors, audit quality remains at the forefront. Looking ahead, Accountancy Europe believes it is key for the audit profession to appeal to top talent, including professionals with different backgrounds.
Accountancy Europe gathered views on the audit profession’s attractiveness, as well as ideas on keeping it attractive, by interviewing 21 key stakeholders. We spoke with young auditors, regulators, investors, academics, and policy makers. Our findings are summarized in Keeping the Audit Profession Attractive.
Most interviewees thought that the best way to keep the audit profession attractive is to promote the audit profession’s achievements and demonstrate what benefits it brings to society. “Make people aware of the benefits of the audit profession: you learn a lot from the 1st day, you meet a lot of interesting people, and you do a lot of interesting things” a young auditor from Austria said. At the same time, clients, investors, and society should perceive the positive value of the audit.
There is also the retention issue: students and young professionals must not only be attracted to join but also motivated to remain in the profession and audit firms to prevent the loss of knowledge and experience. High junior staff turnover rates in audit firms are a concern for the profession and should not be overlooked. Audit firms face the constant challenge of managing the outflow of staff, especially as today’s economic growth creates more opportunities available elsewhere in the job market. It’s not all negative, as new colleagues entering the profession bring fresh ideas to an audit firm. But the challenge for the firms is also about keeping the right people.
From our interviews, we identified five main factors influencing the attractiveness of the audit profession.
- The registration process: the process of becoming a registered auditor encompasses several phases and can be very lengthy. There is a need to find a balance between demanding requirements to join the profession and ensuring that the best professionals are not discouraged from becoming registered auditors.
- Tougher regulation: greater accountability and scrutiny reinforce the public interest dimension of the audit profession. Although auditors understand this is part of the job, they notice that the nature of their work gradually changes, focusing more on tasks related to oversight and quality assurance.
- The compliance mind-set: the very desirable intellectual challenge might be perceived as diminished as work becomes a tick-the-box exercise. Professional judgment and audit quality need to remain the central elements of our work. “Too much focus on the audit process instead of focus on the outcome—we need to find the right balance” was mentioned by a regulator in the United Kingdom.
- Impact of technology: the millennial generation is proficient in the use of modern technology. Young professionals joining the profession should be encouraged to use their capabilities and share them with more senior staff. Also, as firms adopt technology to carry out certain procedures, there are opportunities for more interesting areas of work that may be more attractive.
- Work-life balance: the audit profession is known as very demanding in terms of work load with a high impact on personal life, especially in the peak season. Young professionals seem to increasingly value their personal and social achievements. This imposes a new equilibrium on audit firms to achieve this balance, such as offering increased flexibility.
We also looked into the auditor’s skillset and his or her interaction with other professionals. The key idea regarding the skillset is the willingness to adapt to new situations. The skills needed for an audit will be increasingly driven by the context in which the audit is performed: new business models, technologies used, etc. These trends may make the auditor’s work more challenging but also more interesting.
There is also a growing demand for specialised professionals in the audit profession, ranging from data specialists to environmentalists, and for individuals without an audit or accounting background. This is due to three main factors: technology, increasing complexity in financial reporting, and new services provided by audit firms.
Technological developments impact the nature of the work of the auditor. Not only does the auditor have to further develop his own IT skills but audit firms are also including growing numbers of IT experts in the audit team in order to cope with changes in the business environment. “Every company is an IT company nowadays. What does that mean for audit firms?” asks an audit partner in the Netherlands.
Audit firms and Accountancy Europe’s members are taking action regarding the attractiveness of the audit profession. For example, members are increasing their interaction with universities and are setting up young professionals’ bodies. We present some of these initiatives in the paper.
Our interviews and reflections also allowed us to come to some conclusions and make recommendations. We recommend that stakeholders, amongst other things:
- promote the achievements of the audit profession
- better inform students about the profession
- achieve a balance between demanding requirements to join the profession and ensuring that the best professionals are not discouraged to join
- work together to find the balance between demonstrating compliance and applying professional judgement
- be transparent and realistic on the use of technology in the audit procedures.
Requested: Your Input
To continue this conversation, we want to open the floor to our readers. We look forward to receiving your views on the following four questions.
- What are your views on our interviewees’ feedback on attractiveness and retention? Do you recognise any of these within your organisation?
- Do you agree with the five factors that influence the attractiveness of the profession? Are you aware of any other factors?
- What could be done to keep the audit profession attractive for the next generation? Are you aware of/involved in any initiatives on this subject?
- What initiatives could help the audit profession reduce staff turnover rates and retain the right people?
- Do you have any examples of initiatives underway to tackle these turnover rates?
Please send your responses to Noémi Robert (firstname.lastname@example.org) by November 1, 2017.