The current landscape of audit firms is fraught with challenges in the attraction and recruitment of skilled professionals, as indicated by more than 50% of these firms citing it as a top obstacle. The pressing question at hand is whether technology can serve as a solution to this issue. While some firms may face impediments in the form of staffing problems during large-scale technology rollouts, there are still areas where new technologies can deliver immediate benefits to audit firms.
The 2024 Audit Survey Report from the Thomson Reuters Institute presents that the attraction and retention of skilled professionals loom as a major concern among audit professionals. The report discloses that 58% of respondents deem it a top challenge for their firms. This concern is particularly accentuated in the United States, where 43% of survey participants ranked it as their primary concern. Furthermore, approximately one-third of respondents from the United Kingdom and Canada also designated this as a critical issue.
This predicament has prompted audit professionals to explore the potential of automation and other new technologies, notably those driven by artificial intelligence (AI), in addressing the shortage of skilled personnel. Nevertheless, the report highlights that while many audit firms are at the nascent stages of contemplating next-generation technologies, the implementation of these technologies necessitates qualified personnel. Consequently, some firms are unable to initiate digital transformation initiatives due to a lack of personnel possessing the requisite expertise to harness the benefits of these technologies.
Consequently, audit firms are seeking to strike a balance. While large-scale technology implementations may not be feasible for all firms, there are specific areas where technology can aid in performing audit work more efficiently, thereby helping firms address the staffing gap through automation.
The survey emphasized several benefits of technology adoption, with over half of respondents identifying improvements in efficiency, streamlined processes, and better quality of work as compelling reasons for considering new technologies. Recognizing the time-intensive nature of audits, one survey participant remarked, “Audits of the size we perform are high in hours and low [in] recovery based on the high level required to meet compliance standards that provide little value to the audited client. It would be beneficial to have tools to increase the efficiency of audits.”
However, the challenge lies in identifying the specific use cases for technology in the audit workflow. From internal data management to client-focused activities and forward-thinking applications like predictive analytics and modelling, audit professionals believe that next-generation technologies have a role to play at various levels of the audit process.
Amidst the rush to adopt new technologies, arises the question of who will be responsible for implementing these tools within audit firms. The shortage of skilled professionals is a pervasive challenge, with more respondents citing it as a top concern than any other barrier. Furthermore, the demand for employees with critical thinking, problem-solving skills, and technical audit and regulatory compliance knowledge is high among audit firms.
To address the hiring challenge and make the most of new technologies, audit firms are advised to take a use case-centric approach, focusing on the most time-consuming and repetitive tasks within their processes. By leveraging technology to streamline these tasks, firms can free up personnel for more client-centric activities. Additionally, fostering better communication and teamwork through technology can also help address staffing issues within audit firms.
While the staffing challenge is unlikely to diminish in the near future, the research indicates that many audit firms are already leveraging technology to amplify the capabilities of their professionals, ultimately enabling them to achieve more efficient outcomes with fewer resources.