- In a changing world, auditors need to continually adapt their skill sets.
- Analytical skills, being tech-savvy and excellent communication are critical for the future.
- Developing the skills for the future goes beyond racking up CPD points.
Anthony O'Brien with Nicola Field
None of us know for certain what the future holds. But in business, we can be pretty certain that economic forces will continue to shift, technology will evolve rapidly, and professionals will need to adapt to thrive and remain relevant.
In this dynamic landscape, auditors could be ideally placed to succeed if they anticipate change and plan their careers accordingly. Accountancy Futures spoke with three seasoned experts to find out what the must-have skills will be for auditors in the years ahead.
Liz Stamford FCA, Head of Policy - Audit and Insolvency, CA ANZ; Steve Hayes CA, Audit Partner at mid-tier firm RSM New Zealand; and Steven Watson CA, Managing Director of National Audits Group were all upbeat about the career prospects for forward-thinking auditors.
The consensus from our experts was that many of today’s auditors already possess some or all of the skills that auditors will need tomorrow. However for anyone starting out, or uncertain about how to steer their career in the right direction, our panel highlighted several skills.
Shifting analytical skills
On the topic of future skills, Stamford is quick to point out that “accounting and technical knowledge will remain vital” but “the boundaries of what auditors need to know are extending.”
So besides technical know-how, which other skills top the list? Not surprisingly perhaps, our panel of experts universally cited strong analytical skills as being essential for the future. Stamford describes those as being “Both the ability to analyse data and to articulate what it means.”
Hayes agrees, adding, “Strong analytical skills will always be essential to interpret and to see through the ‘fog’ that can hover over information.” And he notes that it is becoming more important to think outside the box and apply forward-thinking analysis to a client’s business. “This can involve some crystal ball gazing. It’s not enough for auditors to simply focus on the rear vision mirror – an element of predictive assessment is essential.”
Changing technologies – something we’ll look at shortly – will play a role in the way auditors apply those analytical skills. Stamford believes auditors will need to adapt their analytical focus “towards whether the right data is entering a system, the quality of controls over the output and how the end data is interpreted.”
For Watson, analytical and technology skills are increasingly intertwined. “There are so many different accounting systems now,” he says. “Auditors need to know how to extract and format data and how to use it in the most efficient and effective way possible.”
Adapting to technology
Among our experts, “adaptability” was a common theme, and nowhere is readiness to adapt and being open to learning more pronounced than in the area of technology. Quite simply, auditors who fail to keep up with new technologies could find themselves falling behind.
Watson believes auditors need to be able to adapt to new technology to “see a new way of doing things with the aid of IT, interpret the results and explain them to the client”. He adds, “It’s important to look for internal controls that clients can drive through technology, and build on this year by year so that as an auditor, you are continually using higher skills and providing value to the client whilst relying on the controls that have been put in place.”
Stamford sees technology-related skills and a general understanding of what’s happening in IT as critical from two perspectives: “Firstly, auditors need to understand how technology is changing business and impacting the financial statements of entities.”
Secondly, she says, “Being tech-savvy allows auditors to embrace the exciting opportunities offered by IT as part of the audit process. Distributed ledgers, blockchain and other IT advances will reshape the audit process, and auditors need to be able to understand how they work.”
Hayes recognises the need for auditors to be tech-savvy, but links this back to the goal of adding value to engagements and strengthening client relationships. “It’s important to be able to harness technology for the benefit of the client,” he says. “If you can’t achieve this, technology may impress the client in the short term but it won’t sow the seeds of a long-term relationship.
Communicating with clients
On the face of it, audit is a numbers game but it is still a people-facing profession, and the value of excellent communication skills will remain just as important as technology skills.
Stamford notes, “Auditors must be able to tell the story of what is going on to management, their own team and externally to report users.” She adds that as a nation of shareholders, Australians are becoming more interested in their involvement with entities, and this, coupled with the new requirement to formally report on key audit matters, has helped push communication skills to the fore.
Indeed, the introduction of ISA 701 Communicating Key Audit Matters in the Independent Auditor’s Report is something of a game-changer on the communication front. Watson says, “Good writing skills are important, especially with the requirement to report on key audit matters in public company audit reports. This information is in the public domain, and the auditor needs to be able to tailor commentary to individual clients.”
In Hayes’ view, good communication skills go beyond effective writing. “Client contacts aren’t always particularly financially savvy,” he explains. “Too often I attend meetings where people are nodding knowingly but they don’t really understand what’s being said by the auditor. Our role is to interpret data and communicate what we see in a way that is meaningful to the client – there has to be a ‘what’s in it for me’ for the client.”
This involves more than just explaining technical terms to those with a non-technical background. In a crowded marketplace every meeting is a potential marketing interaction, and auditors can be judged on their communication skills. Hayes sums it up thus, “It’s about having the knowledge to speak on a particular topic and the self-assurance to know you can deliver.”
Internal communication matters too
Client interactions are not the only forums where outstanding communication skills are becoming increasingly crucial for auditors.
Hayes emphasizes the ability to communicate extends to internal conversations within the audit team too. “Discussions around what makes a client’s business tick, and what could impact its profitability or market value are vital,” he says. “These discussions give each member of the audit team an understanding of why they are completing certain tasks rather than taking a ‘tick-a-box’ approach. In our heavily standardised industry, this can lower the risk of people focusing on completing worksheets while completely missing the elephant in the room.”
Stamford agrees, saying, “Increasingly, we will see changing business models and younger members of the audit team in particular need to know how it all fits together.”
That said, technology is changing the way we communicate, and here too auditors need to adapt. “Companies will have offices dispersed over a broad area,” notes Stamford. “The audit team needs to be able to work with people digitally as well as face to face, while still being able to function together as a cohesive team.”
How to future-proof your skills
Having identified these essential skills, our panel emphasised that it may require a firm-wide approach to foster and develop these skills, particularly when it comes to those who are new to the profession.
“Being curious is a key quality that encourages auditors to develop skills of the future,” says Stamford. “Asking junior staff to research and present at staff meetings can teach both soft and technical skills.”
Hayes explains that his own firm, RSM New Zealand, goes a little further, encouraging junior staff to be actively involved and have their say in closing out meetings (albeit under careful guidance). He believes this, “fosters a deeper level of thinking about what the business does – and therefore the possible risks it faces.”
“I would certainly encourage auditors starting out in their careers to obtain a reasonably comprehensive understanding of the audit client at an early stage,” advises Hayes. “Move away from a purely transactional approach, which can be part of the early years of an auditor’s career. Raise your hand to be part of planning sessions or volunteer for research projects or to assist with writing papers. These are valuable steps that develop buy-in and foster a shift away from a ‘tick and bash’ approach.”
Networking with peers and mentoring are other valuable ways to develop skills. Stamford says there has been significant take-up of the mentoring program offered by CA ANZ and she adds that the benefits of reverse mentoring can also be significant, noting, “Younger audit staff are able to teach a great deal to their more senior counterparts, especially in the area of technology.”
Summing up on the skills needed for the future, Stamford says auditors need to be resilient and open to growth: “The world is changing, and with it, what you are opining on in the future. Regardless of level of seniority, auditors need to maintain a genuine knowledge of what is going on in the world to stay abreast of change.”
Audit Conference 2019 - Brisbane, Sydney, Melbourne
Strengthen your audit practice with knowledge, strategies and issues within the audit industry, and network with fellow industry leaders.Find out more