A brief survey by Deloitte shows those who rely on the firm’s audit work are looking for more out of auditors.
In a survey of 250 investors, audit committee members, and financial statement preparers, Deloitte says a big majority want to see auditors providing assurance on more than just financial statements, and they want to see auditors making better use of technology. Two-thirds of financial statement users, preparers, and audit committee members said auditors should audit more than just the financial statements, such as earnings releases, investor presentations, and risk factors, for example.
“Many investors are looking for broader and deeper insights that can help them make smarter, more informed decisions,” said Joe Ucuzoglu, chairman and CEO of Deloitte & Touche and head of the firm’s audit practice, in a statement. “The audit profession as a whole will be looked at to expand outside the domain of the historical financial statements.”
Roughly three-quarters of participants said they would welcome the use of more technology in the audit process. The results were mixed, however, among those specific groups of audit stakeholders. More than 75 percent of audit committee members and preparers saw benefit to using advantage technologies, but only 45 percent of users of financial statements were in agreement.
Deloitte, in fact, is touting its own investments of “hundreds of millions of dollars” to innovate audit practices and methods, using data analytics and other artificial intelligence and automation tools. The path forward is not entirely clear, however, as auditors are following ages-old standards that are focused on sampling, when technology might enable testing of entire populations rather than samples.
The Public Company Accounting Oversight Board has raised concerns about the extent to which audit firms have been acquiring consulting firms, concerned about the potential harm to independence, Audit firms say they are taking measure to assure their independence while enhancing their audit practices by purchasing technical capabilities that will enhance the audit.
Nearly 60 percent of financial statement users who participated in the survey, and 46 percent of audit committee members, said they want auditors to become more proactive in addressing evolving demands. Deloitte says the survey also users of financial statements say they have limited ways to fully understand audit results and what an auditor does to fulfill his or her responsibilities. That’s the very reason the Public Company Accounting Oversight Board is pursuing a new approach to auditor reporting, calling on auditors to substantially expand the content of audit reports.
“The business environment is constantly shifting, spurred by technology innovations and evolving expectations,” said Ucuzoglu. “To deliver the most value, the audit profession must lead by taking deliberate steps to get in front of the challenges and bring audits into the future. This will require significant investments and a mindset that is bolder than the public accounting profession has historically been known for.”