The audit profession should reconsider its primary purpose as a public service, if auditors want to win back the trust required by business and society, which has been "bruised" since the outbreak of the financial crisis, according to a report by the Institute of Chartered Accountants in England and Wales (ICAEW).
The report, entitled ‘A vision for audit and a better society’ is a joint initiative between the ICAEW and the UK charity Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), for which more than 200 people were interviewed, a majority of them auditors.
The report found the audit profession "in a reflective mood" as it faces "searching questions" after being thrown into the spotlight by the 2008 financial crisis, which has challenged the profession’s value in a "demanding, global, data-rich and trust-poor world".
As trust is what auditors sell, the report argues, should not the profession feel valuable in the current context where trust is a sought after attribute? Apparently not, as the report discovered a consensus among interviewees that the audit profession is under-producing trust at this critical moment.
The report also emphasises that auditors should recognise themselves as public servants working in the public interest, and calls for the profession to take greater responsibility for its future.
"The public sees change in audit being driven by legislators and regulators responding to perceived audit failures. This dynamic is understandable, but is ultimately self-defeating because it appears to be undermining confidence in auditors," the report stated.
The report also argues that the auditor’s role will expand to include that of "an expert convenor" and develop a more interdisciplinary nature, while rethinking its role as "a custodian of moral good", the report says quoting Australian professor of accounting Glen Lehman.
The change in the audit profession, according to the report, should come from within: "What is needed is a transformation led by the profession and focused on the public good."
ICAEW chief executive Michael Izza said that the report raises uncomfortable questions for the audit profession.
"We have to respond to this public interest challenge. We should be open to this external scrutiny and willing to take on board recommendations where these will improve overall business confidence," Izza said.