Public company auditors play a vital role for investors, from institutional investors to retirees across the country, in making it possible for our capital markets to function and allocate resources efficiently. The needs of the capital markets are evolving, and so must auditors, no matter the stage of their career.
The CAQ recently discussed what skill sets are important for the auditor of the future to possess and the exciting ways that the profession is evolving with audit leaders at Deloitte, EY and KPMG.
Auditor skills are evolving to meet capital market needs.
“Trust in company disclosures has really never been in higher demand than it is today, and this fits squarely into the domain and expertise of CPAs,” said Jon Raphael, National Managing Partner, Deloitte & Touche LLP. “And that makes this a really exciting time, particularly for early career auditors, because the scope of assurance is increasing and that’s going to create new opportunities that will drive new skills and experiences for professionals.”
Public company auditors already have a deep understanding of many of the business areas required to assure emerging areas of corporate reporting like environmental, social and governance (ESG), emerging technologies and cybersecurity and other non-GAAP information.
According to Becky Burke, EY Americas Assurance Talent Leader, “The auditor of the future will be a data analyst and a process expert. The digital audit increases transparency into data so the first-year auditor has the same visibility and access as the audit partner.” She added, “Auditors will also increasingly need to demonstrate their ability to navigate the changing business environment. Investors are demanding more information on climate related activities and cybersecurity, which generates new opportunities for auditors to engage on these matters.”
“We are emphasizing the core auditor skill set, such as experience applying standards and the approach to independence, while evolving to meet the needs of the capital markets, such as looking to ESG and managing risks with digital transformation,” said Corinne Dougherty, Audit Partner, KPMG LLP. “In many cases, auditors will continue to apply the same skill set they have now while remaining committed to their core mission: exercising independence and objectivity and using their expertise to bolster the level of trust in company financial statements and other company-reported information that forms the basis of audit quality.”
Firms are making investments to train the next generation of auditors
Firms are used to making changes to meet new market needs based on regulatory requirements that are passed. Public company audit firms will do what they need to scale – to meet market needs – and maintain audit quality.
Many firms are already making changes to prepare auditors for the future, including spending a significant amount of time and money to train their professionals.
“The profession has invested in learning opportunities for professionals, both to continuously improve audit quality but also to adjust to the pace of change that’s occurring in the world today, from the expansion of scope in assurance services to new changes like ESG and technology disruption, which is impacting all industries and all geographies,” said Raphael. “For example, we recently invested in our ESG practice to further expand not only our sustainability strategy but also learning opportunities for all our professionals.”
“At KPMG, our investments in learning include a collaboration with NYU Stern’s Center for Sustainable Business and the University of Cambridge’s Judge Business School, all with the goal to train our professionals on ESG,” said Dougherty. “With NYU, we co-created a sustainability program for our professionals through executive education. And in our Audit practice, we’ve established an ESG Center of Excellence, which is designed to accelerate our capabilities and our ability to meet the market.”
Firms are also monitoring and considering regulatory developments. “As the SEC looks toward finalizing its climate rule, we are equipping our people with the resources they need to provide assurance for ESG information,” said Burke.
“Auditors are going to play an important role in providing accurate and reliable financial information that demonstrates whether companies are meeting their ESG commitments. We have implemented an ESG education roadmap which includes mandatory courses and trains auditors on the global EY sustainable audit methodology. We’re also developing targeted training around the new SEC rules and related regulatory and technical topics.”
Beyond training audit professionals, firms are also hiring specialists with different backgrounds to strengthen audit quality.
“We’ve been hiring all kinds of new skills and majors for some time now,” said Raphael. “The reality is today that the best teams are typically the teams that embrace diversity in thought, diversity in experiences, and diversity in capabilities and this is especially true in audit and assurance services.”
