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The young auditor’s views on the future of audit

Author: ICAEW

Published: 29 Jan 2021

29 January 2021: Raheeq Ahmad is part of the next generation of auditors. He shares his views on the direction of travel for audit as part of a series of articles based on themes from ICAEW’s Audit Manifesto.

Raheeq Ahmad started his career at Grant Thornton as a 20-year-old trainee accountant, in 2018. He joined an apprenticeship scheme through social mobility charity Leadership Through Sport & Business (LTSB), which helps young people from disadvantaged backgrounds find permanent roles within the business and finance sector. 

Three years later, he is currently working towards his ACA qualification with ICAEW. He is now a senior financial services audit associate at the firm, supervising the audits of various funds and investment companies in the asset management sector. Working in the City of London was something he never thought he’d do. “I grew up in Leyton in East London, which is a very different environment from the City. I never thought I’d end up working there alongside other professionals.” 

As one of the younger generation of auditors, Ahmad believes audit has an important role to play in maintaining trust and integrity in the market. “Audit can help various stakeholders, including investors and the general public,” he explains. “If I were to invest in a company, I would analyse their accounts and assess their performance over the year and understand the audit opinion to see where the company is and could potentially be going. 

“An audit would enable me to see the external view and opinion and I’d feel more comfortable investing in a company where an audit has been performed. However, it would still be at my own risk as auditors do not provide absolute assurance but only reasonable assurance that the accounts are true and fair.”

Yet conversely, audit, or rather, public perception of audit, can be a double-edged sword. Ahmad points to the ‘expectation gap’ which has continued to haunt the industry for several decades. There’s a real need, he says, to bridge this gap, which refers to the disconnect between what the public and stakeholders believe an auditor does and what an auditor actually does. There is the mistaken belief that auditors are ultimately responsible for preventing company failure. 

“Whenever any audit fraud cases are leaked in the press there’s always a murmur of ‘why didn’t the auditors pick this up? Why didn’t they uncover this?’,” Ahmad says. “As auditors, we have a specific scope. We issue an opinion on whether the accounts are true and fair and we carry out various tests to determine this based on materiality.” 

Future innovation within audit is likely to help with these issues. Ahmad points to AI, which could enable auditors to perform automated tests and checks on huge swathes of company data, possibly reducing human error. 

With AI likely to become more widespread, auditors’ skillsets will need to change. “Auditors will have to use judgement more while maintaining client relationships and building trust and rapport will become more important than ever,” Ahmad adds.

Greater collaboration between client and auditor is the logical next step. It’s something that Ahmad would like to see more of in the future. In his view, some clients still see the audit process as a ‘burden’ despite it being a legal requirement.

"It’s understandable,” says Ahmad. “Auditors come in from another company, ask probing questions and request lots of information, so it’s inevitable that some clients feel like they are being investigated. Yet audit is an opportunity for a company to obtain a third-party view and ultimately help the company and its stakeholders to make informed decisions”.

Arguably, the onus should be on the auditor themselves to work on and maintain good client relationships in order to foster greater collaboration between the two parties. Being clear with auditor expectations and needs from the client – and being the reasons and purposes of their requests – will help enormously.

“Clients will be happy to comply with requests if the communication is clear and the auditor is on top of things. Trust works both ways.”

So with the future of audit moving towards automation and AI, freeing up the auditor to focus on building client relationships and using professional judgement on more significant areas, where would this leave trainees with little or no experience of the audit function? Is there a case for allowing new recruits to continue carrying out the more basic tasks to gain an understanding of audit processes?

Ahmad doesn’t think so. “I don’t think we should be utilising staff to complete basic tasks that automation can easily do,” he says. “While they need to understand the purpose of tests, that can be done via demonstration of how AI works. It’s more important for new recruits to develop their professional judgement and see the bigger picture which can be built up by experience and technical understanding.”

There will always be a need for auditors to maintain client relationships and hold the middle ground between stakeholders and the client, he says. “As technology improves and audit becomes more automated, the way we work has to change too, and I do believe as an industry we are steering towards the right direction.”

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