ICAEW's Audit and Assurance Faculty examines the future of auditing and asking how the profession needs to respond to technological development and it's impact on society and the business world?
Audits of companies are central to the country’s economic wellbeing. They give confidence to markets over financial information that have a direct impact on the investment of savings and pensions. However auditing is facing a period of profound change as business and society undergo rapid technological transformation. The question is how should the auditing profession respond?
To build a consensus for change, ICAEW's Audit and Assurance Faculty is examining the future of audit. In a series of publications, the faculty is examining whether sufficient trust resides in the current form of audit, the impact of technology developments on the profession and whether the role of the auditor in corporate reporting remains relevant to future challenges.
The authors look at prospective developments and propose concrete next steps to begin to deliver improvements.
The Audit and Assurance Faculty believes the following issues need to be addressed if we are to continue to have an attractive and relevant audit profession, and one that is valued by all segments of business and society.
- The profession must embrace new technologies.
- Barriers to change that hinder the use of innovation in auditing must be removed.
- Trust in audit needs to be strengthened.
- Auditing must adapt to changing demands placed on it.
Our intention is to use these and future papers in the series to promote discussion with key stakeholders and assist in reaching positive decisions on the future of auditing.
The expectation gap between what is being audited and what people believe should be audited is an ongoing issue. We believe there is a demand for enhanced corporate reporting and greater assurance and if we can meet this demand, capital markets should function more effectively and trust in business should increase.
Auditing is a powerful tool in providing investor confidence in financial statements and supporting economic growth. But an expectation gap exists between what audit does and what stakeholders would like to see it do. The Audit and Assurance Faculty argues that with auditing under public scrutiny changes are necessary to enhance trust and confidence in auditing.
Technology is driving many changes in how we all live, work and interact and it is critical that the audit profession keeps apace with this change and is proactive in understanding how new technology trends can transform the audit approach.
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Audit is changing. Audit methodologies, for decades shaped by technological limitations that are melting away, are being transformed by data analytics. Our report describes the opportunities data analytics presents to rethink and reinvent audit and audit quality. It also aims to inform and educate on developments in data analytics.