Transformation for future auditing skill sets
The accounting and audit profession is undergoing a period of rapid change driven by the rise of new technologies, increasing complexity in business transactions and the changing regulatory landscape. Herbert M. Chain, MBA, CPA and Doron Rozenblum, CPA of Kreston posit that auditors need to develop new hard and soft skills sets to remain relevant and competitive.
IAB: What skill sets must be developed for future professional success?
- Embrace Automation: Automation is revolutionising the accounting and audit industry, replacing repetitive and time-consuming tasks with efficient software and algorithms. Routine bookkeeping, data entry, and transaction processing are being automated, allowing accountants to focus on higher-value activities. The future of the profession lies in understanding and leveraging these automation tools. Accountants must familiarise themselves with cloud-based accounting software, robotic process automation (RPA) and intelligent document recognition systems to streamline processes and enhance productivity, while, at the same time, recognising and responding to the risks presented by their use.
- Leverage Artificial Intelligence (AI): Artificial intelligence has the potential to transform the way accountants and auditors work. AI-powered systems can analyse vast amounts of financial data, identify patterns and generate valuable insights. Professionals need to develop a strong understanding of AI technologies such as machine learning and natural language processing to leverage these capabilities effectively. By embracing AI, accountants can make data-driven decisions, improve risk assessment and provide strategic advice to clients. Again, users must be aware of the limitations of AI, including inaccurate or biased results, and plan and execute their work accordingly.
- Master Data Analytics: Data analytics is becoming a core competency for accountants and auditors. With the proliferation of digital transactions and the availability of vast amounts of data, professionals must possess strong analytical skills to extract meaningful information and identify trends. Proficiency in data visualisation tools, statistical analysis techniques, and data mining algorithms is crucial for interpreting complex financial information. Professionals with a solid foundation in data analytics can uncover valuable insights that drive business growth and aid in risk identification and the related response.
- Enhance Communication and Collaboration: As technology takes over routine tasks, the role of accountants is shifting toward strategic advisory and consultancy services. Effective communication and collaboration skills are becoming increasingly important to engage with clients, understand their needs, and provide value-added insights. Professionals must develop strong interpersonal skills, the ability to explain complex financial concepts in simple terms, and collaborate effectively with cross-functional and global teams. Building relationships and understanding the nuances of diverse industries will be key to delivering exceptional client service.
- Navigate Regulatory and Ethical Challenges: As the environment changes, so do the challenges associated with regulatory compliance and ethical considerations. For example, accountants and auditors must stay abreast of evolving regulations such as data privacy, cybersecurity and financial reporting requirements, to ensure the integrity and confidentiality of financial information. Additionally, professionals must navigate ethical dilemmas arising from the use of advanced technologies, such as the responsible use of AI and data analytics. Understanding the ethical implications and maintaining professional scepticism will be crucial in maintaining trust and credibility in the future.
- Embrace Lifelong Learning: Developing critical future accounting and auditing skill sets requires a commitment to continuous learning and professional development. Professionals must stay updated on emerging trends, attend relevant training programmes and obtain certifications to validate their expertise. Lifelong learning will enable professionals to adapt to changing industry landscapes, acquire new skills and remain competitive in an evolving profession.
- Understand Risk Assessment and Management: Auditors should develop a deep understanding of risk management frameworks and be able to identify and assess various business risks. They need to evaluate the effectiveness of internal controls and provide recommendations to identify and mitigate risks effectively.
- Develop Business and Industry Knowledge: Auditors must have a strong foundation in business and industry knowledge. They should stay updated on industry-specific regulations, market trends and emerging risks to address the risks of financial statement material misstatement and to provide valuable insights and recommendations during the audit process.
Herbert M. Chain, Technical Director, Kreston, USA
Doron Rozenblum, Managing Partner, Kreston, Australia
IAB: What role should firms play?
Audit firms must establish a culture that enhances their staff’s development of these skills. Among the tasks required for the firms are the following:
- Adopt and Integrate Technology: Audit firms need to invest in advanced technologies and systems to streamline their audit processes. This includes implementing audit management software, data analytics tools and cloud-based platforms to enhance collaboration, automate routine tasks and improve audit quality. And staff must be appropriately trained to maximise the benefits to clients, the professionals and the firm.
- Enhance Talent Development and Retention: Audit firms should focus on attracting and retaining top talent. They need to invest in continuous professional development programs, provide ongoing training on new technologies and methodologies, and create a supportive work environment that encourages innovation and growth.
- Build a Culture of Client Relationship Management: Building strong client relationships is essential for the success of audit firms. Firms should emphasise effective communication, responsiveness and proactive client service. Understanding client needs and providing value-added services beyond traditional audits will be increasingly important.
- Build a Culture of Innovation and Adaptability: Audit firms should foster a culture of innovation and adaptability to embrace emerging technologies and market trends. They need to monitor and understand industry disruptors such as blockchain/cryptocurrency, supply chain issues and regulatory changes, and develop the necessary expertise to provide assurance and advisory services in these areas.
IAB: How will automation and skills need converge?
The future of accounting and audit skill sets is intertwined with technological and ecosystem transformation. Automation, artificial intelligence and data analytics are reshaping the profession, demanding a new and upgraded set of hard and soft skills and competencies. Accountants and auditors (and their firms) must embrace automation, leverage AI, master data analytics, enhance communication and collaboration, navigate regulatory challenges and commit to lifelong learning. By embracing these changes and evolving skill sets, professionals can thrive in a dynamic and technology-driven industry, delivering greater value to clients and organisations in the years to come.