How can a high-quality audit help provide certainty in uncertain times?

The importance of quality has never been higher and continues to be the priority for EY teams through the Sustainable Audit Quality program.

My number one goal as EY Global Vice Chair of Assurance is to continue to improve audit quality. I am not willing to compromise on quality, and I believe that “just good enough” is not good enough.

High-quality audits improve stakeholder trust in businesses. This, in turn, drives investment and economic growth, and generates long-term value for society overall.

The delivery of high-quality audits has become even more important as the health and financial impacts of the COVID-19 pandemic have affected economies across the globe. It is vital in uncertain times for companies, investors and the wider public to have confidence in the quality of the audits that support the capital markets.

In this challenging period, EY teams have continued to deliver high-quality audits, helping to serve the public interest and strengthen trust and confidence. Great progress has been made through the EY SAQ program, which has contributed to enhancements in the EY audit execution.

SAQ is the globally consistent EY approach to high-quality audits. It focuses on key initiatives across six pillars.

There have been many achievements as a result of SAQ, and these are discussed in full in the EY Global Audit Quality Report 2021 (pdf). The report examines four themes that summarize my priorities – talent, data, value and trust – and lead to higher quality.

Value and trust speak to the “why” of an audit, while talent and data speak to the “how.” I am a firm believer that EY teams can make further progress on quality by continuing to attract and develop talented individuals, demonstrating the value and trust that auditors bring, and adopting data and emerging technology in the audit.

A high-quality audit adds value across a company’s operations and provides trust to a range of stakeholders, including governments, regulators, standard-setters, investors, company management teams and boards and audit committees.

Technology and talent

SAQ has embraced many new advances in technology, including the EY Digital Audit, the EY Digital Global Audit Methodology (GAM), the EY Canvas Client Portal, the EY Blockchain Analyzer and AI-based EY Document Intelligence.

The EY Digital Audit has set the standard for the data-driven approach to an audit. Fundamental to this is the EY Canvas global online audit platform, which was used on more than 145,000 engagements in 2020, and now connects 120,000 EY people to more than 350,000 company users through the EY Canvas Client Portal. Meanwhile, the EY Helix anaytics platform analyzes more than 600 billion lines of financial data each year and was used on 57,000 engagements in 2020.

Technology is a vital part of SAQ, but it is EY people who are core to the progress that has been made. During the COVID-19 pandemic, EY people have displayed their resilience, commitment and professionalism. I am extremely proud of their achievements, and the report includes some personal stories to demonstrate how individual auditors can make a difference.

These include Allan Douglas, the first Assurance recipient of the Hult International Tech MBA (see panel below), which is an online qualification available to all EY people.

High audit quality is the primary focus of more than 87,000 EY audit professionals across the globe. These range from partners to assistants and also include colleagues from a network of service delivery centers (Global Delivery Services).

The EY network recognizes the need to recruit from as wide a range of talents as possible, a commitment that creates a whole that is larger than the sum of its parts. Professionals from a range of disciplines are already involved in the audit, and this multidisciplinary model will only grow in importance. Increasingly, professionals will be needed who have diversified knowledge of areas such as data, AI, blockchain, environmental risk, cyber threats, fraud, tax and valuations.

Diverse perspectives

The EY network has long been a leader in diversity, including diversity of thought. A concerted effort has been made to build strong, diverse and inclusive teams – something that is especially important in audit, where qualities such as professional skepticism, challenge and critical thinking form the bedrock. Creating diverse teams fosters an inclusive work environment and helps to develop more relevant insights.

Employees need to feel they are working for an organization that not only values them as individuals, but also values a diverse spectrum of backgrounds and perspectives. Fostering this sense of pride and belonging is critical to helping the EY network attract the most talented individuals, as well as keeping them motivated and engaged.

Leaders across the EY organization make employee engagement a priority, and it is embedded as a key metric across talent management programs. In the July 2021 internal employee listening survey, 86% of audit professionals said that EY people demonstrate integrity, teaming, respect and inclusiveness, while 77% agreed with the statement that “EY provides a work environment where I feel free to be myself.”

There has been a particular focus on promoting gender diversity within audit teams over recent years. Thirty-seven percent of new audit member firm partners promoted on 1 July 2021 were female. A strong pipeline of female leadership has been built, supported by 52% of all audit hires across the globe in 2020 being female.

The investments that the EY organization has made in its people, technology and systems have instilled a mindset of continuous improvement that is making a difference. This is best evidenced by the improved results of internal and external inspections.

But there is still more to do. The audit of the future will place new demands and expectations on auditors. With the pace of change accelerating, it is vital to anticipate those developments, while never forgetting the number one goal of continuing to improve audit quality.