Reinventing the audit profession for the 21st century
In partnership with the RSA, the UK’s leading multi-disciplinary think-tank for social progress, we are developing a thought-leading project on the role of audit in the 21st century. This will be the profession’s most ambitious engagement with the wider society. In order to continue to be relevant, the profession has to take self-responsibility in determining its fate and to proactively engage with the public that we aspire to serve. We aim to redefine the role of the audit profession within the modern context of the public interest and to formulate a vision for the highest aspirations of audit in the 21st century.
Rebuilding public trust and relevance of professions
One of the overarching principles which define professions is their role in serving the public interest. The idea of what constitutes the public interest has shifted and evolved over time. There is a common perception that professions have not evolved to meet public expectations at the same rate. If we look at the recent past, professions have been affected by a number of challenging social developments. While progress has been made in adapting to these new circumstances, the widespread belief is that much more could be done to respond to the demands of the 21st century.
We have witnessed the erosion of the relevance of professionalism, particularly in accountancy and finance. We want to reverse and re-energise their importance by creating a new vision. Our profession provides services to the public, and when there is public concern, we need to reclaim and regain trust and relevance.
Public Interest should be at the heart of the audit profession
AuditFutures looks at the new role of audit in the 21st century. We want to prove that the profession should serve society and innovation in audit should be driven by the public interest.
In order to do business with confidence, auditors are required to attest information with their names and enable the public to hold organisations to account. This economic role of audit is integral to the social purpose of the auditor in acting as a trusted reputational intermediary. This is why auditing is a public interest activity that rewards members of the profession because they deliver public benefit.
The essential asset for auditors is their reputation. The condition of lending their good name to others is that they maintain their objectivity and independence in expressing their professional opinions. If auditors are continually seen as being forced to learn from apparent audit failures, then trust in them is eroded and their economic role is undermined.
AuditFutures can play a leading role in helping the auditing profession in its endeavour to rebuild trust and act as an exemplar for the accounting profession as a whole. With the RSA, we would like to explore the concept of working in the public interest and to understand better its modern context.
The audit profession ought to take responsibility in the way it evolves
In order to be relevant to the needs of society, the profession has to take self-responsibility in determining its fate and proactively engage with the public that we aspire to serve.
Currently, the public sees change in audit being driven by legislators and regulators responding to perceived audit failures. This dynamic is self-defeating and does not serve society well because it undermines confidence in auditors. It is therefore in the interests of society, as well as legislators and regulators who act on society’s behalf, that the auditing profession is seen to take responsibility for the process by which audit evolves.
Economic failures which sap people’s confidence in doing business represent challenges and opportunities for auditors to listen, reflect, learn, improve what they do and provide new and better forms of assurance. By taking responsibility for the dynamics of change, the auditing profession will enhance trust in itself and business generally and reaffirm its public interest role.
The auditing profession will face significant challenges in taking responsibility for its future. But it should also prove to be a liberating experience that will call for new ways of thinking. We believe audit should aspire to something above and beyond what is legally required of it and this groundbreaking project will explore opportunities to achieve this aspiration.