Our biggest challenge remains rebuilding trust in the profession, particularly in audit, following a series of high-profile corporate failures. Sir Donald Brydon’s Review is examining the very purpose and scope of audit, a Review which we have been calling for since autumn 2017 and are pleased to support and contribute to.
For all of my working life I’ve felt an expectation gap building; now it is time for us to determine exactly what those expectations are and how statutory audit can address them.
It is also time to consider whether we’re happy to accept that ‘an audit is an audit’, or whether different auditing standards can be applied to different types of entities, as is the case for example, in the USA. I firmly believe that regulation needs to be proportionate and that regulation which applies to public interest entities should not automatically apply to smaller ones.
The same could apply to audits of small entities. The International Auditing and Assurance Standards Board (IAASB) has issued a Discussion Paper, “Audits of Less Complex Entities (LCEs): Exploring Possible Options to Address the Challenges in Applying the International Standards on Auditing (ISAs)”, which asks questions such as whether there should be a separate auditing standard for the audits of LCEs. It is a short and accessible document and I encourage members to make a submission, whether or not you work in audit.
Corporate failures are not primarily the fault of auditors, but of poor corporate governance. For boards to be effective, they need to be diverse in order to avoid ‘group think’. Similarly, the membership of our profession needs to be diverse, to reflect the composition of the communities our members serve.
At ICAEW we have Diversity Champions – young members and students from a variety of social backgrounds and who possess a variety of characteristics. They visit schools and universities to spread the message that we are an inclusive profession and that we are open to all.
As a woman, I have found this profession to be wonderfully flexible, enabling me to set up my own practice and work part-time when my children were young, but before then I was able to work on some incredibly interesting overseas secondments. So, I would like us all to be champions for what a great and diverse profession chartered accountancy is, and to highlight the numerous personal and professional paths to which it can lead.
I’m looking forward to meeting and working with our members across the world over the coming twelve months.