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Mar 31, 2021

Mazars shares the market's vision of the future of Auditing

Future of Auditing

Future of Auditing

  • Data from 12 countries makes it easier to understand the current audit market and helps dispel four "myths" related to audit objectives, the appetite for joint auditing and the role of auditors and technology.
  • The vast majority (93%) of audit users think that auditing needs to be reformed and 87% are in favor of joint auditing
  • The overwhelming majority of companies believe that auditors should extend their services beyond financial auditing (96%); they value a people-centered approach supported by technology to strengthen audit quality and look to increasing objectivity, confidence and performance as primary audit objectives

Mazars, the international audit, tax and consulting firm, has presented the results of the study 'The future of auditing: market vision - myths, realities and ways forward', carried out among more than 500 audit users and decision-makers in 12 countries.

The conclusions of the study, The Future of Auditing, challenge common myths related to auditing and help explain four main areas: the appetite for joint audit is greater than is often assumed; companies expect the technology reinforces the skills of the auditors without replacing them; the interviewees would like to have access to a wider range of servicesand no longer restricted, on the part of its auditor; and there is a disconnect between what companies see as the "mission" of auditors and the benefits of an audit in their companies.

Hervé Hélias, CEO and Chairman of the Mazars Group, says: "By asking companies what their expectations are of auditing and the professionals who provide it, the value they get from it and how the service could evolve, the survey builds up a detailed picture of the issues that concern the auditing market today. Auditing has always been at the heart of what we do, and it is our responsibility to work together to improve its relevance and quality."

He adds: "The public interest is at stake and we hope that these conclusions will help to create a dialog about the necessary evolution of the profession and drive the debate forward."

Conducted in September 2020, the study found that 931pc of audit users think the market needs to be reformed; 871pc are in favor of joint auditing and 881pc of companies with experience in joint auditing are in favor of it.

For Luís Gaspar, Managing Partner of Mazars in Portugal, "The results of this study confirm our perception that a significant majority of companies in the market are in favor of joint auditing. We believe that this mechanism has the potential to increase the quality of the work produced, reinforcing professional skepticism and the ability to question, contributing to creating a more competitive market and enhancing the development of skills. In markets where the joint audit model has already been implemented, there is a widespread opinion in favor of the advantages of joint audits."

Respondents also recognize that technology improves audit quality and want technology to reinforce auditors' skills, not replace them. More than nine out of ten (93%) think technology saves time and 92% say it helps auditors step back to better analyze and question data.

The vast majority (96%) encourage auditors to broaden their range of assurance services. In particular, 87% are in favor of extending the audit to new areas of non-financial reporting, e.g. on climate risk, gender diversity and human rights. Broadening the range of auditors' services can be beneficial to the overall quality of the audit by enhancing the attraction and development of talent with extensive experience.

When asked what an audit will deliver, 74% answered 'an objective and independent opinion on my company's financial statements', followed by 'assurance and confidence for investors, stakeholders and regulators' (61%) and 'support to improve business performance' (52%). Only 34% answered 'fraud detection and prevention'.

David Herbinet, Partner and Global Audit Leader at Mazars, says: "There are clear misconceptions about the mission of auditors, which underline the need for a more transparent dialogue about the scope of auditing. Identifying all possible fraud is not currently part of an auditor's mission. In fact, the detection and investigation of fraud requires a specific scope of work and means - such as those used in forensic activities - more than what an audit is currently asked to deliver."

He adds: "That's why these conclusions are so important: they present the vision of the auditing market today and allow us all to explore what needs to change so that auditing can evolve for its future applications and purposes."

Methodology study 'The future of auditing'

In September 2020, Mazars commissioned Edelman Intelligence to conduct a double-blind survey (Mazars' name has not been revealed) to identify the perceptions and needs of companies (including public interest entities) and audit committee representatives regarding auditing and their current statutory auditor.

The survey had a sample of 501 respondents, with almost half of the respondents located in Europe and 211 from public interest entities (all in Europe). All respondents held strategic positions (CFO, CEO or audit committee members) in organizations based in one of the following 12 countries: France (18% of respondents), UK (15%), Germany (13%), South Africa, (9%), Australia (8%), USA (7%), Brazil (6%), Netherlands (6%), Spain (6%), China (5%), India (5%), Morocco (1%).

Some 681,000,000 respondents identified themselves as men and 321,000,000 as women. CFOs represented 48% of the respondents, CEOs 40% and audit committee members 12%. Respondents' organization size: 50-100 million $ USD (8%) 100-200 million $ USD (26%), 200-500 million $ USD (42%), 500 million and more $ USD (24%).


About Mazars 

Mazars is an international, integrated partnership specializing in audit, accounting, consulting, tax and legal services*. It operates in more than 90 countries and territories around the world and draws on the expertise of more than 42,000 professionals - 26,000+ in the Mazars integrated partnership and 16,000+ via the Mazars North America Alliance - to support clients of all sizes at every stage of their development.

https://www.mazars.pt/ | https://pt.linkedin.com/company/mazars-portugal | https://pt-pt.facebook.com/MazarsPortugal

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