The Future of Audit?
It has been a difficult few months for the auditing industry – and in particular for the national firms that audit large listed companies and other ‘Public Interest Entities’. After the high profile collapses of BHS and Carillion, amongst others – where the question of blame was put at the door of the auditors by the press – last week parliament’s Business, Energy and Industrial Strategy (BEIS) committee launched an inquiry into what it called the ‘broken audit market’.
The BEIS committee’s inquiry is the fourth ongoing review into the audit sector or its stakeholders along with the Competition and Market Authority’s review of the audit market, the independent review of the FRC (the auditors’ regulator) led by Sir John Kingman and Project Flora, a government-backed review into the future of the audit industry.
The outcome of these reviews is not yet known – but one thing that we can say with certainty is that the future audit market will look different to the one that exists today.
So, what does this all mean for firms like Hawsons? The partners here see the potential future disruption as an opportunity.
Medium sized firms like ours are agile and have the ability to adapt quickly to the changing world around us. Our partners have a wider skill set than that typically found in ‘Big Four’ partners, who tend to specialise in a service stream and have more time to spend with our clients, meaning that we can develop deeper working relationships. David Grunberg, founding partner of Grunberg & Co, said in his recent article in Accountancy magazine ‘A commonly heard remark from clients who leave the Big Four is that they felt a stronger bond being created with the partner and the team they joined at the new firm’.
This wider skillset and closer relationships mean that we really understand our clients’ expectations and can adapt and innovate to meet those expectations. Innovation has been important for us – evidenced by our partnerships with Xero and Quickbooks for online accounting and our ‘Making Tax Digital’ workshops – and will continue to be as the market and clients’ expectations change. Innovation is also important in the world of audit – making sure that we combine tried and tested methods with new technology to deliver efficient yet robust and effective audits.
Clients also expect us to be able to offer international expertise. Through our membership of HLB – the 12th largest global network of accounting firms – we have access to 25,000 professionals in over 150 countries. In any country that our clients want to do business in, we can provide guidance and expertise through the network. We currently do a great deal of work with the HLB network, so the service is seamless and the service level is similar to that offered by the Big Four networks.
The future of the audit market is unknown, but with our agility, close client relationships, ability to innovate and international network, Hawsons is well placed to be able to take advantage of any opportunities that arise.