Audit firms are struggling to attract talent. Not only in South Africa, but globally, audit firms and Professional Accounting Organisations (PAOs) are losing their appeal for suitable candidates.
In their publication, Accountancy education ecosystems are complex. Our ability to attract potential accountants suffers, IFAC highlights the following education-specific challenges in certain regions:
• University curricula are not consistently aligned to International Education Standards (IES) and/or PAO expectations, which impacts graduate quality and pass rates in professional exams.
• Limited appreciation among students of the wide variety of opportunities for professional accountants and the broader role of the profession in society.
These concerns resonate with circumstances in South Africa, where our experience is that the trainees with university education do not demonstrate the skills in the audit field to apply judgment, and execute audit procedures independently from boilerplate audit programs and audit templates.
This only addresses the talent that is available. The other aspect is the attractiveness of the profession to accountancy students. Smaller firms are experiencing the following trends, which, in some cases, are not mere trends, but sudden, extreme changes that occurred during the last few years, and negatively impact potential entrants into the profession.
- Negative working environment in auditing
- Bad experience of client co-operation and compliance
- Negative press regarding the profession
- Regulation of the profession and penalties associated with it
- Complexity of the auditing standards and their application
- Lucrative offers from foreign online labour agencies
- Lucrative offers from global networks.
This leaves the smaller firms in a very vulnerable position, as far as recruitment is concerned, as the remaining talent in their firms is being targeted by the larger firms who are also experiencing difficulties.
These challenges will take years to overcome and will require all role-players to adapt and change.
On a positive note, the IRBA is aware of the issues and are addressing the problem, as far as they are able to as a regulator, as well as SAICA. However, in my opinion, the situation also requires action from audit firms, and their partners and staff, if the profession is to change its image and find a better course forward.
The following actions will make a big difference:
- Educating audit clients on their responsibilities, and determining areas of co-operation to ensure efficient and effective audits
- Encouraging self-study of complex audit areas, which will improve the standard of work
- Involving staff in methodology and template development
- Creating a professional environment where all staff can stand tall and be treated as fellow professionals. We are all on a never-ending learning path, but we are professionals from the moment we embark on education for the profession
- Implementing the quality systems according to the requirements, with the goal of becoming better, more efficient and high-quality firms. Compliance with standards will follow automatically
- Standing back from the forest of regulations, understanding the main purpose of the audit and applying it diligently. Checking compliance after applying your mind, not before
- Aiming high when attracting clients. Some firms underestimate their potential and do not perform the engagements they are capable of
- Working hard on methodologies and templates to suit the needs of the firm, and the clients. Leaving space for the preparer to grow as a professional, and engage on difficult and contentious items
- Researching your clients’ businesses and bringing your audit approach up to date. This is good for the client and the firm
- Staying up to date with technology. Even the most basic data analysis exercise will add great value, both to the audit and for the client. It is the way of the future
- Not underselling your service. The clients you want to attract can afford and will appreciate your level of service
- Reporting discrepancies and reportable irregularities. That is your job. More clients will reappoint the auditor that is diligent and does the job, than not.
The profession does not have the luxury of time to get its act together. We should all do our part to re-establish pride in our profession. Only that can make it attractive.