Audit profession rapidly changing

B7: What is the prevailing business landscape in your field of expertise?

HvdB: The auditing profession is currently a rapidly changing one.

Technological advancements are at the forefront of change in most industries, and the assurance practice is no different. The profession, like many others, is moving more and more towards using technology to replace the traditional methods used in the past.

The most prevalent of these is using data analytics. Modern technology allows us to process large volumes of financial information in a much shorter period than before. This enables us as auditors to provide more detailed and insightful information to audit committees, directors and shareholders.

Using data assurance is changing the way audits are structured and the expertise we use on audit assignments. Most of the larger auditing firms have dedicated IT audit teams that assist in these types of assurance services.

On the accounting side, the International Financial Reporting Standards are also changing on an annual basis, to ensure consistency in financial reporting across different companies. During the past year we have seen various changes at clients to due to the adoption of IFRS 15 and IFRS 9, changing the way companies measure revenue as well as financial assets and liabilities significantly.

In the coming year, we will also see clients adopting IFRS 16, which will affect the way in which companies measure leases significantly, specifically for operating leases.

The technicalities involved on some of these measurements have also seen companies reach out to professional services firms more and more to assist in the adoption and measurement required by these standards.

B7: What are the most significant tax developments and how do they impact on mining/assurance?

HvdB: In the assurance practice, we work with an array of different clients, all coming from different industries and as such we are always on the lookout for the latest developments in the income tax space.

As our client base is vast, the current tax developments affect our clients in different ways. These include amongst others the restructuring of the taxation of trusts all the way up to the replacement of export processing zone status for some of our clients.

Due to the complexities involved in accounting for some of the taxation matters on several clients, designated tax specialists have also become involved in the assurance assignments we provide.

PwC has a very strong relationship with Inland Revenue, and meet regularly to ensure we are always up to date on proposed legislation changes and how it will affect our clients.

B7: What are the biggest challenges facing assurance currently?

HvdB: The biggest challenge our profession is facing is maintaining trust in the public.

In recent years the profession has undergone a significant amount of scrutiny due to failures in the public eye. A lot of these failures stem from actual and perceived independence breaches by professional services firms.

The result of this is that the general public is losing confidence in the profession and in the assurance services provided. Audit committees and directors are questioning the independence as well as the professional skepticism applied by auditors in a lot more detail than what was previously accepted.

B7: How can these challenges be overcome/mitigated?

HvdB: Building trust in society is at the core of what PwC stands for and we strive to do this in all the services we provide.

Transparency in the assurance process is key to rebuilding trust. We also see this becoming a high priority for directors and audit committees worldwide.

In order to improve on trust, audit forms should be more transparent on any potential independence related matters. Audit firms should also be more open to how an audit is conducted and report to directors and shareholders in more detail on the audit performed, which risks were identified specifically by the audit teams, and the procedures and related professional skepticism applied by auditors when engaging with management.

B7: What growth opportunities are in your sector?

HvdB: As mentioned above, technology is changing the way we work.

This provides us with more insightful information to be able to add more value to clients from both an assurance and a consulting perspective. The possibilities are endless.

B7: Any closing thoughts?

HvdB: The assurance environment is currently undergoing significant changes. It certainly is a privilege to be part of these changes and being at the forefront of the changes in technology in our environment.