By Nick Martindale Financial accounting and reporting Reimagining audit 8 Nov 2018 For many years, the audit function was essentially a number-crunching role; one where accounts were scrutinised or calculations challenged, with the aim of ensuring reporting accuracy and safeguarding a client’s or business’s reputation. Yet as the world becomes riskier, the role of audit is now evolving, and auditors are increasingly expected to take on a more strategic position. “Audit has evolved significantly in recent years, with an increased emphasis on understanding the specific risks faced by the organisation and tailoring an audit approach that effectively addresses these risks,” says Jon Roberts, partner and head of assurance at Grant Thornton UK. “Audits are now more diagnostic with far more emphasis on the planning.” This is the case for those focusing on internal audit too, rather than client-facing work, says Sally England, director of Hays Audit, Risk and Compliance. “Internal audit professionals who are just entering the sector can now expect a role which involves balancing the need to identify and reduce risk with appreciating the commercial demands of the business,” she says. “The impact they may have can really change the financial and operational strategy of a company.” New skill set for auditors As such, modern audit professionals need to have a range of skills in addition to the core numeracy attributes which have always been essential. “The modern auditor is part-accountant, part-detective and part-data scientist,” says Michelle Hinchliffe, head of audit at KPMG. “We are on the lookout for expert coders, data analysts and tech specialists.” Technology is also making up an increasingly significant part of the role, as auditors switch from more of a reconciling role to a more analytical and data-based approach. The Hays UK Salary & Recruiting Trends 2019 Guide, for instance, found 40% of accountancy and finance employers now say there is an increased need for operational and technical skills, rising from 27% last year. “Today’s auditors need to be analytical, problem-solving and critical-thinking individuals,” says Mark Edmonson, president and CEO of accounting technology firm Inflo Software. “To succeed, they need to have a commercial mindset and be prepared to develop strengths as an advisor and trusted consultant to their clients, which means they need to be able to interpret and translate the rich data that technology can provide, and use that to drive decision-making.” Making artificial intelligence a priority Auditors of the future will need to make use of technologies such as artificial intelligence and machine learning to meet the expectations of clients, believes Stuart Cobbe, customer success manager at MindBridge Ai. “The emphasis will shift from carrying out audit work to a greater focus on the design of audit tests,” he predicts. “Auditors are going to need to exercise professional scepticism to a greater degree. This will involve spending more time in identifying the questions that need to be asked before the audit. Planning audits will become less about dates and tick-boxes, and more about investigative research. This will be particularly evident in the audit work around subjective or difficult-to-assess balance.” In the longer-term, technology could see some junior tasks disappear altogether, says Edward Haigh, director of Source Global Research, which means those entering the profession need to have other skills. “Technology holds with it the possibility not only that the audit model will be disaggregated, but also that many of the entry-level jobs to the profession may be automated,” he says. “Clients continue to want a high-quality audit from a reputable supplier, but what they increasingly want is for auditors to add value by analysing data and offering insights into their business that extend far beyond the traditional remit.” Other, more traditional skills are also essential, however. “Core audit technical skills still remain and competences that have always set a good auditor apart are just as relevant,” says Roberts. “For example, good emotional intelligence, an enquiring mind, a thirst for knowledge, problem-solving and teamwork are all attributes of a good auditor. Good time management is also imperative to any audit.” Internal audit requirements In internal audit, softer skills such as being able to engage, negotiate, challenge and collaborate with stakeholders across the business are vital, says England. “Language skills are also becoming increasingly important, especially for internal auditors whose role is focused on the EMEA region,” she adds. “Typically EU languages are requested, in addition to Mandarin and Russian, and a good level of proficiency in a second language can often set you apart from other professionals.” Overall the market for audit professionals remains buoyant, says Edmonson. “The bigger firms have reduced their graduate intake in audit, but are taking on additional graduates in more specialised areas such as data science,” he says. “Demand is strong for auditors, in particular at the qualified levels where the big four firms are often recruiting from mid-tier firms to top-up their reduced intakes at lower levels.” This has led to average salary increases of 1.6% over the last year, according to the Hays UK Salary & Recruiting Trends 2019 Guide, slightly below the average rise seen for accountancy and finance professionals at 1.8%. “Salaries have risen, in part, due to an increasing need for experienced audit, risk and compliance professionals, as organisations look to mitigate the risks to reputational damage carried by the proliferation of online media, as well as the potential for heavy fines related to GDPR and other recent legislation,” says England. Retaining talent But the sector is facing a struggle to hold on to talent, with individuals often tempted into industry, analyst, and corporate finance roles, meaning firms need to do all they can to attract and retain people. “To attract more people into the profession, firms need to consider the growth prospects and opportunities that they are offering,” says Cobbe. “It’s crucial that people are offered the time and resources to sharpen other skills that wouldn’t have been traditionally expected from an auditor. Those working for proactive firms where technologies are removing onerous tasks from their workload are freed to focus on providing greater value for clients and given greater fuel for a more fulfilling and successful career.” The Hays survey, though, also hints at an issue the industry needs to address, with 32% of people in the sector ranking work/life balance as the most important consideration other than salary when choosing a job. “Positively, 54% of accountancy and finance employers offer part-time working options to staff, and a further 49% allow professionals to work remotely or from home,” says England. Roberts admits this is something that organisations have to manage if they want to retain top talent. “It is true that during the ‘busy season’ people will work very hard and during this time it is important to strike the right balance between being supportive and giving individuals autonomy to work and manage their own time accordingly,” he says. With all the new elements of the job, a career in audit remains attractive, arguably more so than ever, suggests Edmonson. “Audit has always been a strong initial step on the career path and the more analytical, problem-solving skills auditors are now acquiring earlier in their career improves future progression opportunities,” he points out. “Few careers offer an inside perspective on such a variety of business models.” Nick Martindale is a freelance journalist, editor and copywriter. He regularly contributes to a wide range of national and business media, including The Telegraph, Raconteur supplements in The Times and HR magazine.