Circit is delighted to be sponsoring the Progressive Audit Firm category at the Accounting Excellence Awards, counting several of our customers among the finalists. But what makes a progressive audit firm?
In an era of rapid technological advancements and ever-evolving business landscapes, traditional practices and methodologies are constantly being challenged. This holds particularly true for auditing and accounting, where a new wave of progressive and modern firms is redefining elements of their work.
Today, modern audit firms have shifted towards adding value, driving innovation through embracing technology, fostering a collaborative culture and building trust with clients.
What does progressive and modern mean?
There is an evolution happening within the audit space: regulatory pressures, fee challenges, limited resource capacity, revised auditing standards, and changes in public perception and opinion.
A progressive audit firm will prepare for and absorb these challenges whilst identifying and addressing areas for improvement. These firms are utilising technology, resources and process improvements to deliver a higher quality and profitable service, balancing this with a ‘quality over profitability’ approach.
What role is there for technology?
Winning new audits requires a lot of resources and particularly staff resource can be a real challenge. Younger generations of auditors have different expectations, especially when it comes to using technology to eliminate or reduce manual tasks. Circit or other technology products can be a positive influence on this by ensuring auditors don’t need to duplicate efforts by tracking tasks within Excel or by having to wait for updates on completeness.
Using technology, these actions can be partially automated and tracked in real-time. It’s not a replacement for staff but a partnership with staff, one which helps to outline and streamline actions taken. Throughout the process, technology creates efficiencies, transparency and communication, internally as well as externally, with clients, providers and other third parties.
The final piece of this is reporting. When firms speak with a client post engagement, an integrated platform can create clarity on overruns and why they happened, what actions were taken, and how to resolve this in the future. Technology can help create a lot of efficiencies that can serve the auditor to comply with the requirements of the auditing standards while delivering above-and-beyond customer experience.
Focus on client experience
Culture can be an overlooked element when it comes to audit firms. But it’s crucial, as the tone at the top finds its way to the operating level. A culture of professionalism, demonstrating that the firm puts quality above profitability, is a hallmark of a progressive firm; so is helping staff with the difficulties that may be encountered during an audit and providing support in overcoming them.
Profitability as the guiding principle can have impact on the quality of the audit and increases risk and quality is very much two-sided: there is the quality for the client and there is the quality across the organisation.
Firms should consider implementing a client experience system to ensure there is transparency around the processes that are underway, especially as they may encounter clients that are less technologically inclined. The best way to drive quality for clients is by meeting them where they are, from their experience and empathising with their position.
Using a product can help set expectations on the workflows to expect and create that clarity. The tone is set by the product: “This is what to expect when doing a confirmation request or during testing.”
Another example is during transactional data collection – the platform and auditor can guide the client through this together. With Verified Transactions, an authorisation request is sent to the client who then approves this via their banking interface. Firms are driving quality by enforcing the use of the systems that their teams are using.
How do these firms engage and motivate their staff?
In audit there is usually a strict hierarchy; from Partner through to Junior. Encouraging responsibility beyond immediate tasks is an important element of audit firms bringing out the best in their staff.
Audit has traditionally had a stigma of not being the most interesting line of work. It is seen as a laborious, repetitive job but in fact, it’s a crucially important role. As staff develop and move up the ranks, it’s crucial to give them their own responsibility for the audit. Everything staff members do ultimately has an impact on the expression of the opinion on the financial statements.
What are some key staff motivators? Auditors have a big responsibility to investigate and to do detective work to detect potentially fraudulent activity. There is a lot of technology out there that allows them to do just that. When the data is already there in a standardised format, it frees up so much of their time to focus on where they can really add value. This can particularly be beneficial to younger staff.
With the right technical abilities and skills, there can be more focus on things that are more analytical or include elements of computer programming. Leveraging staff interests and knowledge to work on these kinds of projects can help attract new talent and retain the existing staff.
Transparency and accountability are guiding principles for modern audit firms. They prioritise clear communication and open dialogue, ensuring that clients are well-informed throughout the audit process. By building trust and maintaining high ethical standards, these firms instil confidence in stakeholders and contribute to the overall integrity of financial reporting. They combine this with investments in technology and staff (these go hand in hand).
Modern audit firms have emerged as catalysts of progress and transformation in the auditing profession. They embody a forward-thinking mindset, leveraging technology, embracing collaboration, and upholding core values of transparency and accountability. By redefining the role of auditors, these firms are not only meeting the demands of today but also shaping the future of auditing.
Best of luck to all the Finalists for the Progressive Audit Firm of the Year at the Accounting Excellence Awards!