FRC/ICAS Steering Committee publishes report into the future of audit

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29 Sep, 2016

A joint Financial Reporting Council (FRC) and Institute of Chartered Accountants of Scotland (ICAS) Steering Committee has published a report (“the report”) calling for a debate on the future of audit and the auditor skills required to meet this vision.

The report is based upon the findings of two reports, commissioned in 2013, that were issued by the ICAS and FRC in April 2016.  These indicated that “it is doubtful whether the profession currently has the skill base necessary to deliver an audit beyond the traditional financial statement audit”.  In order to evolve the audit to deliver “a more holistic assessment of a company’s strategy, business model, risk profile, operations and performance”, the report identifies that the auditor skill set needs to improve in the following areas:

  • advanced business acumen skills;
  • technology and data interrogation skills; and
  • soft skills.

The report also identifies a number of barriers to change which the Steering Committee believe need to be overcome to meet the future vision for audit.  These are identified as:

  • the problems of recruiting and developing audit team members;
  • the extent to which standardisation may impair the development of judgement and innovation; and
  • the perception of audit as a career choice.

The Steering Committee hopes that the report will help to initiate a “constructive” debate” and highlights that “it is essential that the profession engages stakeholders in the debate if it is to deliver a high quality public interest audit for the future”. 

The press release and the report, Auditor Skills in Changing Business World, are available on the ICAS website.  An event,which will discuss the report, will be held on 23 November 2016.

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