Heightened Focus on Risk Increasing Demand for Audit Professionals
In the wake of the financial crisis, the government is getting serious about risk control. The Public Company Accounting Oversight Board (PCAOB) latest move to propose seven new auditing standards related to the assessment of risk is no exception. According to the PCAOB, the proposed standards would supersede its interim auditing standards related to audit risk and materiality, audit planning and supervision, consideration of internal control in an audit of financial statements, audit evidence, and performing tests of accounts and disclosures before year end. “An appropriate assessment of risk is the foundation of a high quality audit,” said PCAOB Chairman Mark Olson. Olson argues the proposals are intended to strengthen that foundation, which should result in improvements throughout the audit.
Internal audit is at the core of Governance, Risk and Compliance (GRC), and is vital to providing increased transparency and insight into business. That’s according to a number of top Chief Audit Executives who recently gathered in NYC for a summit to develop strategies to improve operational efficiency in response to the economic crisis. The executives also concluded internal audit is made more efficient and effective through evolving best practices and the use of technology. Executive search firm, A.E. Feldman says the heightened focus on risk is creating audit jobs for senior-level professionals with a CPA or CIA designation. A.E. Feldman adds that recruiting among accounting firms remains highly competitive as accounting and finance executives are being confronted by the increasing complexities of changing tax laws and regulations, including the push for International Financial Reporting Standards (IFRS). The firm says that accounting jobs are opening up as firms address mounting resource demands. Current opportunities include, tax jobs and business valuation jobs.
The PCAOB has proposed new standards which would establish requirements and provide direction on all audit procedures, from the initial planning stages to the evaluation of the audit results. The Board says the proposals build upon and attempt to improve the existing framework for risk assessment by taking account of improvements in risk assessment methodologies, and reducing unnecessary differences with the risk assessment standards of other auditing standard setters.
According the PCAOB the proposed standards would do the following:
- Enhance integration of the audit of the financial statements with the audit of internal control over financial reporting, resulting in more effective audits
- Integrate the auditor’s current responsibilities for considering fraud during the audit
- Serve as an improved foundation for future standard setting
- Reflect the Board’s effort to reduce unnecessary differences with the risk assessment standards of other auditing standard setters.
Fraud considerations are factored in as well. According to the PCAOB, the auditor’s responsibilities for considering the risk of fraud are a central part of the audit process.
Although some audit firms already conform to the proposed standards, the Board would now like them to be mandatory. The Board has opened a 120-day comment period on the standards, ending February 18, 2009. Any new auditing standard or amendment to a PCAOB standard that is adopted will be submitted to the Securities and Exchange Commission for approval.
Meanwhile, leading Chief Audit Executives (CAEs) from some of the world’s top organizations recently convened in NYC for a day of strategizing about the economic downturn and how to improve operational efficiency and recover revenue. The CAE Summit, presented by ACL Services Ltd., PricewaterhouseCoopers and MIS Training Institute, was the first time leading CAEs have gathered since the economic crisis began.
“We are evolving internal audit to provide better auditing of organizational risk,” said Andrew Raftis, Senior Vice President & Auditor, AXA Equitable. “It’s critically important to provide greater visibility by using strategic auditing methods in your organization,” he adds.
One of the Summit’s Presenters, John Verver, ACL’s Vice President of Alliances & Product Strategy, also notes, “The global liquidity crisis has dramatically increased risk levels in business, and made longer term planning much more difficult. Organizations need to leverage their own resources within internal audit, including well-honed skill sets and existing technology.”
Are you working in auditing? If you want to grow your career or your company’s bottom line, contact A.E. Feldman’s President, Mitch Feldman, now. Find out more about auditing jobs today!
