AUDIT & ASSURANCE

Traditional Audits Don’t Deserve Premium Billing

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Relevance empowers staff to do their best work because an audit isn’t reduced to checklists.

By Alan Anderson, CPA
Transforming Audit for the Future

If we can’t demonstrate to our clients that our work is relevant, then the audit will go the way of the dinosaur. Relevance underpins the other attributes.

MORE: Four Basic Understandings Every Auditor Must Master | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
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Relevance is not a one-time event. It’s a continuous process woven through everything your firm does. You build it one step at a time. This should be done with every audit, so this becomes core to the fabric of the firm’s culture.
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Four Basic Understandings Every Auditor Must Master

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Make your audits more relevant and provide value-added insights and services to your clients.

By Alan Anderson, CPA
Transforming Audit for the Future

The question professionals should always ask is, “Are we leaving the profession better than we found it?” So, let’s ask: Are we leaving the audit profession in better shape than it was when we inherited it?

MORE: Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
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Right now, we’re not providing value, but I honestly believe it’s not too late. The future of audit is ours to create or a future that will happen to us, and not necessarily a future we would prefer.

It will take leadership to change the future of audits. We have to take ownership of the process.

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Can Big Data Spot Financial Fraud?

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woman leaning toward desktop computer screen

Google searches give auditors a glimpse of true sales.

By CPA Trendlines Research

Google Trends is a free service at the world’s most widely used search engine. In an instant, users can see how often a keyword has been the target of a search.

MORE: Will Unclogging the Accounting Pro Pipeline Kill Mobility? | Accountants Cozy Up to Clients with CAS | CPAs Culling Clients for Better Work-Life Balance | Women-Owned Businesses Upbeat but Need Help | Accountants to the Rescue as Startups Struggle | Looking for Recent Grads? Good Luck
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When that keyword is a product, the searches tend to reveal something about sales.

And that should be of interest to auditors.
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Turning Audit & Accounting into Assurance & Advisory

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To remain relevant, we must change the meaning.

By Alan Anderson
Transforming Audit for the Future

As I see it, audit is at a crossroads. On one path, audit will keep going the way it has for the last decade or so. It will become so irrelevant and commodified it will vanish. Fees will drop so low that no one will be able to afford to be in the audit business. Plus, technologies like artificial intelligence and blockchain will be able to do what we’re doing now, only better, faster and cheaper. That might not happen for another 15 years, but that is coming.

MORE: Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | The Big Issues in Audit: Frustration, Inconsistency and Technology | Talent Retention: Five Tips for an Audit Adjustment | The Ten Financial Controls That’ll Make You a Hero | Five Cash Reports You Can’t Live Without | When an Audit Is a Great Thing
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But there’s another solution — we can drive change positively for our profession. This change won’t happen overnight.  I want to encourage us to really think about driving that change because we can influence it quite dramatically.

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WANTED: Great Audit Mentors

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Professional audit mentors are scarce.

By Alan Anderson
Transforming Audit for the Future

Instant download:
“The New Manifesto for Accountants.“

I was lucky in the entirety of my career to have been empowered to try doing things differently. I had mentors who encouraged me to keep learning. But today, this forms-filling exercise that audit has become discourages people like me from staying. The ones who stay in audit are the ones who like filling out those forms.

MORE: Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | The Big Issues in Audit: Frustration, Inconsistency and Technology | Talent Retention: Five Tips for an Audit Adjustment | The Ten Financial Controls That’ll Make You a Hero | Five Cash Reports You Can’t Live Without | When an Audit Is a Great Thing
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New audit staff rarely have a mentor who gives them the big picture of what audit is supposed to be. Instead, they learn how to fill out the forms better and more accurately. They don’t get review notes that ask them to think about what they’re doing. They get review notes about the way they reference their supporting documentation.

This lack of mentorship means that the best and brightest, the ones who like to keep learning, eventually leave. We are making the problem worse for future generations.

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Is Audit in Crisis Because of Definitions?

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Auditors, accountants and businesses need to agree on expectations and deliverables in audits.

By Alan Anderson
Transforming Audit for the Future

Instant download:
“The New Manifesto for Accountants.“

Do the banks and investors get useful information from historical audited financials? In their book, “The End of Accounting and the Path Forward for Investors and Managers,” Baruch Lev and Feng Gu researched the relationship between changes in stock prices and the dates that corporate financial reports were released.

MORE: Three Fundamental Questions to Ask in Audit | How Auditors Can Beat AI | The Big Issues in Audit: Frustration, Inconsistency and Technology | Five Ways to Increase Audit Efficiency | Early Adopters Gain an Edge in Audit | Talent Retention: Five Tips for an Audit Adjustment | Six Benefits of an Internal Audit | The Ten Financial Controls That’ll Make You a Hero | Five Cash Reports You Can’t Live Without | When an Audit Is a Great Thing
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In the 1950s and 1960s, roughly 90 percent of the market value of public companies could be directly attributed to the earnings and book value reported in their financials. By 2013, that percentage had dropped to just 50 percent. Personally, I’m surprised it’s even that high. The historical financial statement does not serve the needs of the users of those statements.
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