The multi-disciplinary model (MDM) – accounting firms providing audit and other services under the same brand name – allows audit firms to enhance audit quality by leveraging in-house expertise – such as forensic accounting, tax, information technology, data analytics, and valuation professionals – to help address complex audit matters. These subject-matter experts are available to support the audit engagement teams, contributing the specialized skills necessary to maintain audit quality.
As the complexity of the business world increases, auditors benefit greatly from the insights of specialists. A few examples include:
- When an organization conducts an IPO or makes an acquisition, audit teams benefit from the insights of valuation specialists who are able to help them understand the value of a business before and after the transaction.
- With tax regimes around the world increasing in complexity, professionals who specialize in tax are integrated into the audit team and help auditors audit tax provisions and evaluate tax contingencies and understand the ramification of tax policy changes on the companies’ business.
- As companies continue to evolve on their use of technology, their IT environments become increasingly complex. This makes having IT specialists on the audit team critical to their ability to understand risk posed through the use of IT in a company’s business and reporting, and design tests to address those risks.
- Audit teams can engage forensics and accounting specialists to help them identify potential incentives or opportunities for material fraud to be committed and to design ways to address risks of these types.
Auditors are More Equipped to Handle Client’s Needs with MDM
The MDM enables audit firms to benefit from in-house expertise. As studies have shown, this expertise can improve audit quality¹,². It’s in the best interest of both auditors and their clients for the audit engagement team to have the most well-rounded knowledge of the markets when providing their services.
The MDM also allows the audit profession to keep up with changing business operations and the needs of investors in making capital allocation decisions. And importantly, rules and policies are in place to maintain audit quality and auditor independence when audit teams tap into the expertise afforded by the MDM. These safeguards protect against potential conflicts.