The audit profession has a long and proud history. From the beginnings of double entry bookkeeping to the digital revolution, bright young things have taken up the challenge of providing assurance over company accounts. 

But times change. Audit, for many, is no longer seen as a crucial gateway to a rewarding finance career, when compared to the attractions of Big Tech and start-ups. Even those already in the profession are having their heads turned. A poll at a recent ICAEW Audit and Assurance conference revealed that retaining talent was named as the number one challenge for 73% of audit firms. 

Recruit and retain

In fact, Kevin Ellis, Senior Partner and Chair of PwC UK, admitted that the firm is struggling to hold on to its talented audit recruits. Ellis blamed the “current of external negativity” that has surrounded the audit profession in the wake of recent high-profile corporate failures. 

James Hadfield, an experienced auditor and Partner at Menzies, says the new cohort of auditors is joining a profession facing a number of external challenges. 

“The profession isn’t the most attractive at the moment, given the really acute staffing shortage,” he says. “And at the same time there’s more pressure from regulators, while the punishments for audit shortcomings are increasing. It’s a pressure cooker, and everyone’s feeling burned out. 

“As to whether it’s more attractive at the moment, I’d say no, but I think technology is one of the aspects that will help us get over that.”

Changing role of audit

Deloitte’s Head of Financial Services Audit and Assurance, Allee Bonnard, is at the sharp end of recruiting auditors into the firm. She firmly believes that technology – the chance to both use new tools and ditch old manual tasks – is vital in maintaining audit’s attractiveness. “Tech will definitely make the day job more enjoyable,” she says. “There will be less data manipulation and the tools that we use will be better. Data will already be in a form that we can analyse.”

Bonnard’s role at Deloitte includes leading on complex audits, and she says she’s already seeing technology open up the role of her new auditors. “Digital tools and data analytics mean it’ll save us time and hopefully make us better as we’ll have more time to focus on things that matter most. And that’s important because in the future we’ll have a much broader remit of things we have to give assurance on – all of the ESG [environmental, social and governance] metrics, for instance.”

That prospect – of making a tangible impact on how business risk is assessed and measured, and how tech can help – was part of Julia Walker’s decision to join the profession. She’s been a senior associate at PwC for two years, having switched from a career as a chemistry teacher. She says newer auditors are expected and encouraged to introduce and develop digital ideas as a benefit to the firm as a whole. 

Walker is part of the intake of PwC’s Digital Accelerator programme that aims to capture and harness the energy of the newest entrants to the firm: “Within my particular business unit, we’ve taken that accelerator role and created a digital transformation team there. Through that, we’re trying to drive our upskilling of our business unit, from us thinking and being passionate about it and seeing how it impacts our audits.

“We’ve also been working with directors and partners; we have links to them and the digital accelerators, so we can promote tech from the top – but then also we run lots of training sessions with all of the auditors so we can promote tech from the bottom up.”

A fresh approach

Bonnard agrees that harnessing and directing the energy of new entrants is an indispensable part of maintaining the profession’s standing as forward thinking and attractive to new entrants. “Gathering new ideas is critical to how we operate,” she says. 

Young auditors are already making an impact with how they approach data and tech: “Before we start an audit, we’ll get people in a room and look at how we can best use the data to interrogate the company’s position. It’s the younger crowd, who might want to write a script for one thing, or use data visualisation for something else. They think about stuff in ways that I never could.”

It does however, she admits, need careful management to ensure a clear audit trail: “First, we tell them if you’re going to do something with technology, then it has to be able to be re-performed by somebody,” she says. “So, if a younger auditor comes to me with a huge dataset and says, ‘This is what it’s telling me’, I have to be able to re-perform it to check there are no errors in their conclusion. So that’s a learning curve for younger auditors – they may know how to get there but they’ve never had to leave an audit trail before.”

Nick Jeffrey, director of professional standards at Baker Tilly, agrees that moulding digital natives to the assurance arena presents some challenges: “We have to look at how we train our people, because we find that many of those coming into our business are very ‘click happy’. They’re familiar with how tech works, and they might have a degree of skill-set in areas like data manipulation; but what they don’t have is a risk management skill-set. 

That covers systems and processes to protect data and understanding that in accounting firms we do things in a certain way – meaning how we develop tech, and link it up using APIs (application programming interfaces) because that manages our cyber and digital risks.” 

New horizons

Providing secure, robust assurance is a process that some say will be radically altered by the new digital tools, particularly artificial intelligence and blockchain, that will transform the role of audit and auditors. For some, deploying AI and machine learning to digest, organise and analyse large datasets is the next frontier in audit. Meanwhile others hail the possibilities of ‘unhackable’ distributed ledger tools that will eventually remove the need for trained auditors as more transactions sit on a verified blockchain. 

However, Baker Tilly’s Jeffrey offers a word of caution, underlining the fact that the new audit tech is only as good as the skilled professional applying them: “I think they’re valuable tools, but we’ve been hearing about technology making us redundant for 20 years now, and it still hasn’t got to the point of addressing the issue of how humans interact with technology. 

“If you take AI, you still have the issue of input – AI reflects what goes into it, and that base reflects the bias of those who are constructing it. If the base is wrong the whole thing is wrong. They are useful tools but the case that they’ll replace humans in any substantive way has yet to be proven”. 

Jeffrey points to recent audit failures: “They’re mostly down to human errors in how they interact with and use tech. And in that interaction, the core skills of the professional auditor will be vital. I could see how machine learning and blockchain might help in giving assurance around a discrete set of transactions where you can spot exceptions and so on; but I’ve still not seen anyone who’s convincingly made the case that it’ll replace human auditors.” 

Bonnard sees distributed ledger not as a threat to auditors and attracting new people into the profession, but rather an opportunity to not only handle larger and more complex datasets but also made auditing less process-driven and more judgement-led. 

“I think blockchain will enhance the amount of assurance we can give the public – there are things at the moment that we cannot give 100% assurance or testing on. It’Il be really welcome tech when it takes away mundane tasks. Using your judgement to assess whether something is right – that’s the value-added stuff you need skills for, and what auditors want to do in order to make a difference.” 

As auditing continues to evolve, the opportunities, amid this huge cultural change, to influence and shape the future of auditing offer younger auditors a chance to make their mark and bring auditing back in from the cold.