Audit suffering from lack of innovation in accountancy profession

The FRC’s latest report found that over a third of audits conducted by small and mid-tier firms are of poor quality highlighting the need for significant investment in innovation in the sector. Rich Neal, Managing Director of MyWorkpapers highlights the findings.

The innovations exist, with cloud technology growing in popularity year on year, but smaller firms are slow to adopt them, despite the benefits of standardisation and streamlined processes.

38% of reviewed audits required significant improvements, the worst performance since 2019, and were deemed “unacceptable” by the Financial Reporting Council (FRC), which carried out the inspections.

Rich Neal, Managing Director of MyWorkpapers

Chief among areas in need of rapid improvement were quality control procedures, routine errors, revenue reporting, and estimates and judgements – all of which have previously been identified as ongoing issues.

In response to the report, MyWorkpapers finds that tweaks to traditional practices are no longer enough to overhaul the process to a standard acceptable to the FRC and to compliance-conscious clients.

Instead, it recommends a new approach that places standardisation and innovative, efficient cloud auditing systems at the centre of the audit process.

This, says the firm, will allow auditors to enhance workflow management and improve accountability processes, as well as creating a simplified connection from auditing to the wider financial infrastructure of a business.

The best way forward, finds the firm, is the integration of existing audit best practices with innovations in technology to standardise the audit process and bring it in line with areas that typically see more substantial investment, such as tax and accounting software.

Calling for equal investment in the audit process as in other areas of the business, MyWorkpapers is targeting a new financial landscape in which audits are streamlined, straightforward and able to stand up to scrutiny.

Neil underlines that standardisation through cloud technologies and end-to-end workflows is the key to properly overhauling the audit sector and overcoming some of these ongoing challenges.

The benefits of cloud solutions for auditors are two-fold. Firstly, they benefit from an efficient system designed to be scalable, accessible and highly user-friendly.

Secondly, clients will not be shouldering the burden of poor auditing which exposes them to risk as well as their auditors.

Investment in cloud-based auditing solutions is a must for all audit providers, as it can deliver cost-effective, high-reward improvements to an essential business service, to the benefit of audit providers and clients alike.

Main image: