INTHEBLACK June 2025 - Magazine - Page 40
FEATURE
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40 INTHEBLACK June 2025
blockchain
transaction
verification.”
Audit’s
evolving regulatory
landscape is also driven by
factors like a breakdown in the trust that
underpins audit quality. In most cases, trust
in audit quality is well deserved. However,
recent violations of audit independence
among large audit firms and high-profile
corporate collapses have put audit quality and
ethics in the global spotlight.
Governments and regulators in the UK
and EU have responded with changes around
audit market operation, while an Australian
Parliamentary Joint Committee report into
structural challenges in the audit, assurance
and consultancy industry recently proposed
enhancing the Australian Securities and
Investments Commission’s (ASIC) power to
take enforcement action against audit firms,
not just individuals.
Another key driver of regulatory change
in audit is the growing commitment
to environmental sustainability. ASIC
commissioner Kate O’Rourke notes that
ASIC’s financial reporting and auditing
surveillance program for 2025–26 will
expand to include sustainability reports.
“We encourage entities required to
prepare a sustainability report for financial
years commencing 1 January 2025 to
start preparing for those obligations now,”
O’Rourke says.
“ASIC will take a pragmatic and
proportionate approach to these new
reporting requirements and will be
supporting preparers through regulatory
guidance. We recognise the important role
that auditors will play in providing assurance
over sustainability reports.”
4. NEW CHALLENGES CALL
FOR NEW SKILLS
The influence of factors like AI, ESG
reporting and regulatory change will require
new skills across the audit profession.
At EY, for example, upskilling includes
areas like prompt engineering.
“In a way, I think auditors are very good
at this, because they’ve always had to provide
clear guidance and direction to those that
are more junior. In a similar way, when you’re
creating a prompt, you need to give really
clear direction and be able to articulate your
requests in a way that is going to give you
the results that you need,” says Larkin.
“When you receive those results, you need
a level of auditor judgement and scepticism,
which is a skill that has to be honed over
many years as an auditor.”
Corry says that auditors won’t need
to know the intricacies of a computer
programming language like Python, but they
will need a strong grasp of how AI works.
“Will auditors need to know Python
scripts? No, they won’t, but they will probably
need to know the basics of how a Python
script runs within an AI tool.
“I think auditors are also going to need
an understanding of how AI and data
analytics work,” adds Corry. “There has been
growing focus on this skill for the past five
years, but being able to use a data analytics
tool and then being able to interpret the
results for a non-technical stakeholder
is going to become much more important.”
While skill development is on the audit
agenda, the talent shortage remains a
challenge. Rachel Kay, business director
for finance and accounting at recruitment
firm Robert Walters, says demand for
auditors remains strong across various levels
of the profession.
“There are fewer graduates pursuing
accounting qualifications, yet the demand
for technical accounting professionals has
risen due to stricter regulatory requirements
and scrutiny on financial reporting,” she says.
Kay notes that with technology playing
a bigger role in auditing, proficiency in data
analytics and automation tools have become
highly valued among employers.
“Auditors are also expected to stay updated
on regulatory changes and provide valuable
insights beyond financial assessments.” ■
