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A future manifesto for audit

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The audit profession has rightly come under brutal scrutiny for its role in enabling a string of corporate scandals, from South Africa (Steinhoff and Tongaat) to Europe (Wirecard) to name just a few.

The Institute of Chartered Accountants in England and Wales (ICAEW) decided to do something about it.

As Sir Donald Brydon put it in his report last year: ‘Audit is not broken but it has lost its way, and all the actors in the audit process bear some measure of responsibility’.

ICAEW has hosted the AuditFutures programme, an innovative, cross-professional series of dialogues on audit and its future. Over 1,000 people participated in its activities: from accounting students and trainees to seasoned professionals, from auditors and accountants to designers and philosophers.

Out of this came five key principle that will guide the future audit.

  1. Auditors should be able to articulate, uphold and communicate the profession’s social and economic purpose. A meaningful and relevant purpose of audit underpins the social contract and legitimacy of the profession and can inspire, attract and retain responsive and talented people.
  2. Developing and promoting the distinctive identity of the audit professional. A distinctive professional identity is linked to how individuals see their work. The cultivation of identity is a continuous journey throughout the various steps of professional preparation and is reinforced through lifelong learning and practice.
  3. Fostering a collaborative learning community for the professional practice of audit. A modern profession should facilitate learning between firms and create precompetitive spaces that advance its knowledge and promote its social and economic role.
  4. To support holistic professional formation and education. Powerful educational experiences can foster a sense of liberation and commitment. This requires holistic attention to the conditions, theory and approaches to learning to increase attention to developing curiosity, scepticism and critical thinking.
  5. Adopting a ‘design mindset’ to think and work differently. A modern audit profession should reach out beyond its traditional stakeholders. In order to be trusted and responsive to the evolving needs of business and society, it has to find ways to engage more widely and deeply.

It’s clear from this executive summary, that the audit profession anticipates a very different professional landscape to that existing today. For example, collaboration between firms on a “precompetitive” basis, and a process of collaborative learning.

Education in the future will go beyond the purely technical aspects of accounting, focusing on engagement, excellence and ethicality. It is this kind of approach that is needed to cleave auditors away from their corporate paymasters.

The audit profession will have to broaden the universe of stakeholders and users of audit information. This will require a new “design mindset” to expand its ideas of what is desirable and possible.