FUTURE
MAPPING THE
FUTURE OF AUDIT
Can the audit profession restore trust? Will new technologies like blockchain cannibalise jobs in the profession? Should the audit product evolve to include sustainability reporting? These are some of the questions Tamara Oberholster asked a range of audit experts.
I
n the wake of several high-profile corporate failures over the past years, from Carillion in the UK to Wirecard in Germany and Steinhoff in South Africa, there’s been a renewed focus on financial reporting systems with calls for audit reform globally.
There have been several developments on this front, including The Auditing Profession Amendment Act (APA), which was signed into law by President Cyril Ramaphosa on 23 April 2021 and gazetted on 26 April 2021. In the UK, the report by Sir Donald Brydon CBE, titled ‘The quality and effectiveness of audit: independent review’, lays out various recommendations for reform, which may have application outside of the UK, in countries including South Africa.
Ethics and trust Professor Wiseman Nkuhlu, chairman of the board at KPMG South Africa, says his primary concern when it comes to the future of audit is to restore trust in the profession. “There needs to be a restoring of pride in the social purpose of audit,” he says. “For us to continue doing the great things that we've done as human beings, we have to work through organisations, collaborating together. And that requires trust. Auditors play an important role in enhancing trust of an organisation. We must just get that back in terms of restoring the pride in the audit profession. And auditing firms should take
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voluntary responsibility for restoring that trust.” Prof Wiseman believes that instilling an understanding of business’s role in society needs to happen not only within industry, but in education too. He says that over the past few decades, business qualifications have become very focused and narrow, shaped predominantly around teaching techniques for extracting value and maximising shareholder profits. “There is very little about the social sciences or people in the courses,” he says. “We need to find a way of bringing those into the BCom and MBA courses. Just teaching ethics on their own without linking it to the need for why you’d want people to be ethical (for the sake of sustainability) doesn’t work. It's when you care about the fears and concerns of others, that you can sustain whatever you do in the longer term. We must not teach ethics for the sake of ethics, but because ethics are about the greater good.”
“Directors should have an obligation to report on what actions they've taken to ensure that there is no fraud in the company.”
