What auditors can look forward to in 2021

This year promises to be action-packed for auditors. So, what do we have to look forward to in 2021?

Striking a Balance: virtual vs reality

We have never worked more flexibly, and that is not necessarily a bad thing.

We hope for a little more balance though. That we can work from home, the office or anywhere else of our choosing.

Many of us crave the camaraderie of working closely with colleagues, meeting clients, or making new connections at conferences.

In my opinion, video calls maintain relationships, but they don’t advance them. In 2021 we look forward to a chat over a coffee or banter over a beer.

A new audit standard: less complex entities

In December 2020 the IAASB Board closed the year by approving the proposal for a new international audit standard for less complex entities (LCE). This has been in high demand for some time and it has been a privilege to personally contribute to the development of this standard.

As a member of the IAASB’s reference group, I have input to the scope and purpose of the LCE standard and reviewed each draft to provide the view of a technology leader with recent practice experience. The global group’s discussions have been highly informative and greatly benefited the development process which is moving at pace.

The standard is on track for exposure draft release in June 2021. This is an exciting development for the international profession and one I look forward to discussing with people and implementing.

Audit reform: UK and beyond

Sir Donald Brydon’s review was the last in a series of reviews of the UK audit market’s quality, regulator effectiveness and competition. Yet limited progress was made in 2020 against the backdrop of COVID-19 and Brexit. And there are multiple other reviews in other territories.

Audit reform is likely to be higher on the UK’s to do list in 2021. But with certain of the recommendations in-flight and challenger firms making already inroads to the Big 4’s listed dominance, it will be interesting to see how many of the more radical recommendations are progressed.

Skills: A revolutionary accounting qualification

In September 2019 ICAEW announced plans to incorporate emerging technologies into their ACA qualification through a partnership with Inflo.

Complementing ICAEW’s already paperless examination process, the partnership means students will answer questions by reviewing Inflo outputs on an illustrative client data set as part of their studies and examinations.

This is the first accounting qualification to integrate the practical use of data analytics and AI technology directly into the assessment process. Examinations in March 2021 will be the first, bringing a new wave of tech-enabled auditors into the profession.

Read more about our partnership with the ICAEW here.

US: AICPA’s Dynamic Audit Solution

In 2016 AICPA began discussing with US firms an unprecedented project to develop the Dynamic Audit Solution (DAS), a transformational auditing methodology to breathe life into the US audit technology space.

With over $50m of funds raised directly from US CPA firms to support, a project commenced in 2018, the firms contributing significant funds and technical expertise will be hoping to get their hands on a viable version of the technology in 2021.

All eyes will be closely monitoring developments, given anecdotal evidence that innovation has slowed in US participating and watching firms as they await the outcome of a project intended to advance the US profession.

Starting a revolution: The Complete Digital Audit

In late 2020 we presented our vision for the Digital Accounting Platform, where auditors could leverage emerging technologies in a complete Digital Audit solution. This centred on the new development of workpapers documentation and audit methodology to drive an innovative and modern approach to auditing. A truly data driven audit approach.

Close to 40 firms from around the world are in early adoption of the solution as part of our highly collaborative Innovators’ Circle programme and the feedback to date has been incredibly positive.

We look forward to the general release of Inflo Workpapers in spring 2021.

Take a look now at the Complete Digital Audit in action…

And there will be many more exciting developments from Inflo during 2021. Watch this space and stay safe!