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Auditors must change ‘colourless image’ to stem declining numbers

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A traditional profession with over-complex regulations or exciting and vibrant chance to experience the world?

By Philip King 12 minute read

Auditors need to overturn the colourless public image of their profession to match the exciting reality of variety, travel and adventure, said insiders concerned about their declining numbers.

Exposure to different businesses from board level to factory floor marked it out from other accounting roles and opened up a world of opportunity, they said, and it was vital that message got out as demand for auditors outstripped supply.

The head of accounting at RMIT, Robyn Moroney, comes from a family of auditors and said the public image of the profession was unfair.

“Auditing is a really great place to start your career — you get an insider’s view of how different organisations work and you’re constantly learning and exposed to a lot of different people,” she said.

“You don’t have to be super-senior in the audit group before you start to meet audit committee members and some of the smartest people going around.”

The Queensland Audit Office said the view of auditors as “dull and aloof” with a goal of “catching people out” was far removed from the facts.

“Audit is vibrant profession comprised of all kinds of people who are passionately committed to helping organisations,” a spokesperson for QAO said. “Audit attracts people who like to get ‘out and about’ — those who have a sense of adventure, thrive in a team environment, and enjoy new experiences.”

But that message has failed to get out, according to CPA Australia media boss Dr Jane Rennie, who said there was a major shortage of auditors and numbers were dropping all the time.

“There are more than 250 internal and external auditor roles advertised on SEEK right now,” she said. “An additional 2,000 advertised accounting vacancies require some level of auditing expertise.”

She said ASIC data revealed the extent of the decline, with the number of SMSF auditors dropping 13 per cent to 5,540 in the four years to 2021, while registered company auditors plummeted 19 per cent to just 3,553.

“The profession is clearly feeling the crunch. Auditing has never been more important and the demands for audit will rise,” she said. “We need to attract people into the profession both from overseas and within Australia.”

Ms Moroney said university study was one place to start.

“We need to change how we teach and how we do things right from the beginning so that it becomes a more attractive prospect,” she said.

The deputy chair of the International Auditing and Assurance Standards Board, Hong Kong-based Len Jui, said today’s young generation was lured away by technology and entrepreneurial opportunities online.

“Auditing is a very traditional profession,” he said. “The profession itself needs to change to meet the expectations of the younger generations.”

Another challenge was the complexity of the regulations, laws and professional standards needed to qualify as accountants.

“It’s a combination of elevated professional proficiency requirements but also the younger generations are focusing on more flexibility and innovation, and other industries are more attractive,” Mr Jui said.

Mr Jui, who now works for KPMG, initially trained as an accountant, worked as an auditor, and in a three-decade career has spent time as a CFO and regulator, but returned to auditing.

“My work is just as exciting as the first day I entered the profession,” he said.

The globalisation of auditing and its increasing adoption of technology could help answer the lack of appeal to today’s generation, according to the Queensland Audit Office.

A spokesperson for QAO said data analytics was allowing auditors to focus on areas needing technical expertise and professional judgement.

“By automating some processes, we can conduct greater analysis and provide new and rich insights,” she said. “Data visualisation is also a booming trend as it helps our audiences easily understand audit findings and insights, for example, through interactive dashboards.”

She said audit skills were also highly transferrable, with four QAO staff on secondment to the Office of the Auditor-General in New Zealand, for example.

Associate director of the National Audits Group Gansen Pappiah said another appealing facet of auditing was its critical role in promoting public trust.

“A lot of decisions being made in the market are contingent upon the work we do and our opinion on key financial data,” he said.

But Ms Moroney said there was also the potential for public misunderstanding about exactly what that meant, and there was a tendency to blame the messenger.

“Sometimes the blame goes to the auditor first and then you have to dig a bit deeper and actually see where the blame actually lies,” she said. “Is it really the fault of the auditors, or how much really should be going back to those charged with governance, the board, etc?

Mr Jui said part of the problem rested on yet another misunderstanding of the auditor’s role.

“In terms of corporate failure, one of the things that people don’t tend to understand is we’re providing a high level of assurance but we’re not guarantees. Management is accountable for the books and records, the financial information they put out to the public. The auditor’s role is to make sure that those numbers are prepared in accordance with the professional standards,” Mr Jui said.

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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