as cpas, we exercise due professional care in all we do. when we perform audits, the bar is higher.
by alan anderson, cpa
transforming audit for the future
in my work with auditors around the country, and as i’ve thought about where audit is headed, i’ve developed a framework of five key attributes of successful leadership for audit. if we focus on these five attributes, i truly believe we can transform audit from the checklist exercise that it’s becoming into a service that genuinely adds value to our clients.
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let’s look at each of these five crucial attributes of successful audit leadership:
- relevance. the first attribute, which is closest to the client, is relevance. for audit to be relevant, you must understand what’s important to the client. what are their goals? what are they trying to accomplish, and how can we provide insights and ideas that help them with those goals? you’ve got to have leadership that actually believes that the audit is relevant, and you’ve got to communicate that belief and create actions that support its relevance. we absolutely need to create processes that let our staff understand how the piece they do relates to the whole business. the commoditization of the audit diminishes dramatically if we start delivering value. we demonstrate that value by our actions, not just by the words on our websites.
- business-mindedness. business-mindedness means looking both inward and outward. the inward focus means making sure the work the firm does makes sense from a business point of view. the outward focus involves thinking about our clients and how we would improve their businesses if we ran them.
- quality. quality in audit is more than just passing peer review, which is how many firms gauge their quality. quality means really understanding the standards, the industry and the client. it means understanding how to do an audit and building a quality culture at your firm. a quality culture means first-time right: it means making sure the work gets done right the first time and not just depending on review to catch the mistakes at the end.
- innovation. innovation isn’t just about being on the cutting edge of the latest technology. innovation is a mindset that you build into your culture. it means being willing to try doing things differently. innovation means being thoughtful about what your people need, so they can do the job right the first time. innovative uses of technology aren’t just how many screens we have but how we can leverage technology to get insights into our clients’ operations. it’s thinking, planning, communicating, acting and delivering differently to give clients value.
- empowerment. our staff have so many great ideas and so much intellect, but we’ve created an environment where those who like to think and learn are leaving the profession. and those who stay are the ones who like filling out checklists. empowerment means encouraging our staff to try doing things differently. it means making it ok to make mistakes and learn from them. empowerment means we trust our teams to do the work appropriately because we have trained them well and have given them the tools and guidance they need.
none of these five attributes is more or less important than the others. these are an integrated whole. they all work together. you can’t have quality if you don’t have an empowered staff. you can’t have relevance if you don’t empower your team to think about what’s relevant to the client and to be innovative in using new tech and new tools. business-mindedness is a double-edged sword: on one side is the need to understand your client’s business so you can give them relevant suggestions to improve their business. on the other side of that sword is the need to make the right decisions for your firm. the underpinning of all of that is quality. obviously, as cpas, we’ll exercise due professional care in all we do, but when we perform audits, the bar is higher.
when you focus on all five of these, with the client at the center, you almost can’t help but achieve the overarching goal of the audit, which is to issue the correct audit opinion.