Audit transformation road map: New report lays out the journey

A new report from CPA.com and the AICPA creates a snapshot of what a typical audit firm transformation looks like, based on feedback from 54 U.S. firms of various sizes and maturity levels.

“By establishing a baseline, this inaugural Audit Transformation Report aims to support a more informed conversation across the profession,” wrote CPA.com president and CEO Erik Asgeirsson and AICPA CEO–Public Accounting Sue Coffey, CPA, CGMA, in the report’s introduction. “The themes surfaced here reflect where firms are today and illuminate the strategic, methodological, and technological shifts required to meet the needs of tomorrow’s audits.”

The report details emerging technologies like artificial intelligence as the principal catalyst for audit transformations. More than three-quarters of the firms surveyed said they are using AI or advanced automation tools, but nearly the same percentage of firms said they don’t have a formally documented transformation plan.

The report provides a template for more organizing plans to change, with the authors encouraging readers to share the report with firm leaders and forward-thinking co-workers.

Based on responses, the authors compiled five key themes for audit transformation, including suggested next steps related to each theme:

• Technology for audit is evolving: Related next steps include formalizing and documenting a transition plan and investing in a holistic, intentional technology strategy.

• Efficiency is a key driver for audit transformation: Next steps in this area aim to maximize both efficiency and value, beginning with optimization of current audit processes and planning for productive use of time saved.

• Adoption of modern audit methodologies is beginning to accelerate: The authors recommend a shift from over-reliance on prior-year workpapers to a risk-driven approach to auditing, supported by digitizing dated procedures.

• Metrics are evolving, but slowly: New metrics that support audit transformation include deliverable-based accountability, client-readiness scoring, and audit margin per engagement.

• Improving the experience for clients and staff: Next steps include formalizing the delivery of audit insights as a core deliverable, taking inventory of your team’s skills and interests, and engaging your audit teams in evaluating new technology.

“Firms that are further along in their journey,” Asgeirsson and Coffey wrote, “cite measurable gains in efficiency, audit quality, staff experience, and client satisfaction — offering an emerging view of what modern audit delivery can look like.”

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.