The auditor in 10 years

April 1, 2022 2:58 PM

While every profession changes over time, the rapid deployment of revolutionary technologies and the expected expansion of the field far beyond purely financial information mean that auditors can expect their profession to change more than most — and that will mean they’ll have to change, too.

In 10 years, auditors will need a number of new skill sets, new competencies and new capabilities, and they’ll want to start developing many of them now — whether they’re currently in the profession, or are just starting their careers.

To be sure, there are things that won’t change: Auditors will still need to bring professional skepticism and technical knowledge to the table, along with a sense of integrity and independence. And the profession will continue to offer them something great in return, according to John King, vice chair of assurance for the Americas at Big Four firm Ernst & Young, whose daughter is studying accounting at Texas Christian University and has just started interviewing with firms.

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“I look at this through my daughter’s eyes,” he explained, “and the basic exchange we have for people who want a career in the profession is still there — you develop terrific skills, you develop terrific experiences, and all you have to do is work hard and want to get those experiences. I think we are in a better position to do that now than we ever have been in the 30 years I’ve done it. There’s a sense of excitement about it. As we look at where we are, there’s an underlying vitality to the profession that I hope people see.”

One key characteristic of vitality, of course, is growth, and for auditors, that will mean growing beyond their current definition.

“When I think about the auditor of tomorrow, I think part accountant, part technologist, part data analyst, and then throw in a specialty of some sort (whether it be industry, or deeper technology, like cyber),” explained Sue Coffey, the CEO of public accounting at the Association of International Certified Professional Accountants. “We can’t be everything to everyone, but we will need foundational knowledge and experience in key areas. And, as business becomes more complex, that will drive specialties. A young auditor will need to think about this.”

To get young auditors (and their future employers) thinking about this, we asked a number of experts in auditing to imagine what members of the profession will need to know in 10 years; see their answers below to find out what and who that future auditor will be.

Tech-savvy

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It may seem obvious to suggest that future auditors will need to be more than comfortable with technology, but it’s going to be so critical to the field that the need simply cannot be emphasized enough. “They need to be extremely strong at technology, and not the wiring, but understanding artificial intelligence and understanding those particular skills,” said Al Anderson, founder and president of AccountAbility Plus.

Jon Raphael, audit and assurance national managing partner — transformation and assurance at Deloitte & Touche, laid out a specific set of areas of information technology they’ll need to be comfortable with: “Included in that are things like data and analytics — so, managing databases, understanding data acquisition, understanding how to transform the data so that we know that it is complete and accurate, and then how to create analysis from them using various methods, whether it’s statistical or algorithm-based in so way, shape or form to be able to turn data into information. And that all starts with understanding the nuts and bolts of IT, how computers work and databases work.”

EY’s King, meanwhile, suggested auditors will need to have a broader view of technology as well: “I think what is going to be important … is the ability to understand how different technologies serve different purposes and how they work together in a broader ecosystem,” he said.

Analysts, not just collectors

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Much of the grunt work of the audit is going to be automated, and that will mean taking a different approach to data.

“Since technology will bring together data from many different sources, the auditor’s focus will not be on compiling the data but on analysis — deep analysis,” said the AICPA’s Coffey. “Having the ability to slice and dice data to create really meaningful information about the client and industry will become a more regular occurrence.”

“From the jump, they’re going to have to be really good at not only being a doer of things but being a user of different pieces and aggregator of different pieces of data and information, and being able to synthesize that,” added King. “It’s going to be incredibly important.”

Smarter, faster

It’s not just their work in data analysis that will be accelerated: Future auditors will find themselves doing much more high-level work earlier in their careers.

“Immediately, they will use more synthetic skills and more executive skills,” explained King. “Part of that is we will be able to move forward their higher-level interactions with clients where they get that really executive experience, whereas it has been pushed back a little bit over the past 10 or 15 years. I think they’ll see that much earlier in their careers.”

Deloitte’s Raphael concurred: “Now there’s that hard work the first few years just to get things learned and get the processes done, but we’re going to be able to streamline that in a way … such that people are going to be doing way more analysis and way more critical judgment and exercising their professional skills, whether it’s professional excellence or professional skepticism, at all levels.”

He added that, where possible, the profession might benefit from moving from its current model of training, where entry-level staff perform individual rote tasks hundreds — and sometimes thousands — of times, to something more like medicine’s model of, “Watch one, do one, teach one.”

Leaders and team managers

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Audit teams are a staple of the profession, but their composition will change, as more and more non-accountants are brought on board to add tech and data analysis expertise, as well as deep knowledge of the audit client’s industry — and that will require auditors to bring new leadership and management skills to bear.

“It really will not, in my view, rest with ‘me,’ the one person; it will rest with a team,” explained Anderson. “It will be much more of a ‘we’ or a team orientation. I might not be the data analyst — I might be the one who has all the business acumen — but I’m going to work with someone who has all the data analysis skills.”

Raphael highlighted a critical team skill: project management. “Understanding what’s important and how to deliver against a roadmap, and through that, to communicate, collaborate and get to an outcome of a complex system of what an audit represents — that is critical, and to me, that comes down to project management and communications,” he said.

The responsibility for training those different kinds of managers and leaders will rest with firms, of course.

“We’ll develop people very early in their career into managers that can manage folks of all different disciplines on all kinds of different career trajectories,” said King. “Those skills are incredibly important, and I think we will become better and more systemic at providing those skills earlier in one’s career.”

Specialized

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In a decade, the point of the audit team won’t be to bring together enough warm bodies to handle the amount of work involved, but to make sure all the different types of expertise that are necessary to conduct a high-quality audit are represented. That means each auditor will want to bring their own unique set of individualized skills.

“You need to pick your tranche,” said Anderson. “Just like firms can’t be all things to all people, you can’t be all things in everything that’s going to be needed in that skill set in 10 years. You need to pick your path and be darn good at it; whether it be mathematics or algorithms or machine learning or quantum computing or business acumen — you need to pick your path.”

“Audit’s not just math, it’s not just numbers, it’s not just GAAP,” added Julie Bell Lindsay, CEO of the Center for Audit Quality. “It’s non-GAAP measures, it’s KPIs that are not based in GAAP, it’s understanding climate risk; it’s understanding all those different areas — what are the assets that are of value to companies? A lot of it is intangible assets that don’t necessarily make it to the balance sheet. It’s really all the different areas, not just financial statements and GAAP; it’s exploring all these other different areas and all these different industries, which is exciting.”

Strategic

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The high-level analysis that auditors undertake for a high-quality audit, and the industry experience they bring, put them in a strong position to offer other kinds of value.

“The future auditor will be more strategic,” said Erik Asgeirsson, president and CEO of CPA.com. “They’ll sign off on the financial statements, but they’ll also be providing a lot more business insights to their clients, and enabling their clients by providing more business insights to the users of their financial information, or ESG or other data sets.”

“You want to have auditors who can provide those insights and have those discussions with their clients,” he continued. “It’s the ‘and’ story that you can be independent, you can have integrity, have competency, sign off on the information, and then provide them business insights. … Do you want auditors to make $50,000 a year, or do you want them to make more money? If they’re going to make more money, they’ll need to provide additional information on top of just a sign-off on the audit.”

Interpreters

Having better insights and deeper analysis won’t matter if clients and users don’t understand them.

“One thing that will be important is communication in connecting with the clients,” said Asgeirsson. “There might be more of that as auditors are moving into more of this business insight area with their clients.”

More broadly, Wes Bricker, vice chair and US Trust Solutions co-leader at PwC, sees the auditor of the future as an interpreter helping different communities understand one another: “Technology will allow us to look at the more judgmental areas where we need our best people, our best thinkers, our system-level thinkers who … can translate across domains of knowledge — translating from the financial community to the scientific community, from the financial community to the engineering community, from the financial community to the human resource community,” he said. “That’s what I hope we see in 10 years."

Diverse and comfortable with diversity

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With diversity a critical issue for both audit firms and the companies they’re auditing, the auditors of the future will be both diverse themselves, and comfortable working with diverse teams.

“Diversity, equity and inclusion are business imperatives for us,” said KPMG’s Paquette. “In addition to the foundational skills of financial technical and business process skills, we’re also looking at how do we accelerate the skill advancements of our diverse workforce, and how to retain and promote professionals from underrepresented groups, so we’re very much focused on upskilling our professionals in areas that we think they need to have for the advancement of the audit, but also making sure that we’re bringing a diverse workforce to the table.”

“Audit teams will continue to be more diverse and be better as a result, and have different disciplines and different backgrounds,” King said. “When you look at the experience that someone will have in 10 years, it will be a much richer experience, for sure, but it will depend on that person’s ability to interact with people of different backgrounds and different disciplines, and bring together a team. That’s what leadership is about.”