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March 12 2020

Opportunities for the audit profession

The change brought about by the digital and technological revolution continues at pace and businesses must react to the challenges this presents. In our own business, that of professional services firms, this transformation has already begun – we are witnessing a high demand for specialist skills in technology areas such as big data, business intelligence and blockchain. And this technological transformation is happening now in the audit departments of large corporations.

Information is fuelling the twenty-first century; however, information that isn’t credible is of no use at all. This means trusted and reliable information, and increased transparency assume even greater importance. Today’s auditors are qualified and positioned to provide this.

The future for audit and consulting firms

No matter how revolutionary the technology becomes, business is still driven by people. Business leaders and stakeholders need our services, our professional judgement and our advice. As auditors, we are perfectly placed because we understand their businesses and how they work. Thus, rather than consolidating our existing services, we will likely extend into other areas of customer need. But we must prepare.

What’s more, the methodology we employ to draw conclusions about a business is evolving from the system of sampling we used until recently to the analysis of data on a grand scale. This is helping us to, not only, verify financial and non-financial information but also to identify and mitigate business risks while also supporting growing businesses with their financial and operational restructuring. Our services are adding value more than ever.

How can smaller firms adapt to these challenges?

Our industry has seen more change in the last ten years than in the previous thirty. This means we can’t be complacent and rely on a reputation built up over earlier decades as it doesn’t count for much in the new world. During the coming decades our businesses will have to adapt to even more change; to be able to continue to compete we will have to constantly re-educate ourselves.

Today’s businesses are more complex and legislation much broader. We can’t be specialists in everything so there is a need for multidisciplinary teams comprising professionals with expertise in specific areas. This presents opportunities for small and medium-sized firms to collaborate with others. Customers are very astute too and value the honesty and humility that a smaller business brings. We may not be able to solve all their problems, but we can provide solutions through collaboration.

Smaller firms must focus on their service proposition

Rather than concentrating on market challenges and opportunities, it is vital that small and medium-sized firms focus on the service they offer and make it relevant to customers. The benefits of a narrower boutique offer of specialised services are attractive. This added to expert knowledge of local markets, the agility that a smaller firm can exercise to meet the demands of constantly changing markets, and the personalised service that smaller firms find easier to provide makes for a compelling proposition.

We now need to become more than auditors; we must become our clients’ trusted advisers. This means working with business leaders to help anticipate and adapt to what’s happening rather than auditing what’s already happened.

About the author

Ricardo is the managing partner at Russell Bedford’s Barcelona member firm, GNL Russell Bedford. He is also a member of Russell Bedford’s international board, representing the EMEA region. .

Ricardo is a member of the Official Register of Auditors (ROAC).

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