Auditing in an Era of Compound Volatility

The big picture: The combination of more frequent disruptive events and long-term structural changes to our economy has raised the cost of doing business and leaves companies with little margin for error.

As auditors, it is our job to navigate this era of “compound volatility” while also planning for and investing in the future. In doing so, we fulfill our mandate to enhance trust in the capital markets and create a better experience for our people and our clients.

Going deeper: Underlying the challenges posed by compound volatility is declining trust in our society’s institutions, the information reported, and our ability to solve big, complex problems. Our 2023 Audit Quality Report details how our mindset of continuous improvement, along with investments in our audit approach, quality management system, and technology, are enabling us to meet rising stakeholder expectations and increase trust.

 Our audit journey and quality efforts are reflected across five key areas:

1. Our approach: A well-managed audit pulls work forward, allowing more time to focus on areas of highest risk to the business. We’re empowering our teams to identify and respond to new and emerging risks in line with professional standards. At the same time, our leaders are held accountable to driving our audit strategy, fostering a strong and ethical culture and delivering quality outcomes. By continuously strengthening independence, and constructively engaging audit committees, management, controllers, talent and the policy community, we enhance trust in our capital markets. 
2. Our system of quality control: We’re standardizing, centralizing and automating key areas of the audit to drive consistency across our portfolio and pull work forward to create capacity for more extensive pre-issuance reviews. These efforts underlay our quality management system, led by our Department of Professional Practice.
3. Our technology: The rapid rise and use of artificial intelligence is creating new opportunities and challenges for business leaders, as well as new financial reporting risks. Simultaneously, it’s transforming how and what we audit. Across our firm, we are investing $2B+ to develop and implement AI and cloud solutions that are transparent, explainable, ethical, and secure, and empower our people to stay ahead of the market.
4. Our people: Our people are the backbone of our commitment to audit quality. A Values-driven culture, underscored by continuous learning and development opportunities, enables us to deliver an exceptional people experience. Through these efforts, we are continuing to empower our people to plan for disruption, more deeply identify and understand risks to audit quality, and accelerate innovation to meet rising expectations from stakeholders.
5. The future of the profession: The nature of the audit is fundamentally changing, and so is the profession. Business digitalization, technology assurance and environmental, social and governance are increasingly top of mind, and we are laser-focused on navigating the risks and opportunities that these and other emerging trends bring to financial reporting and the audit.

The bottom line: Audit quality is an ongoing commitment, and we believe our Audit Quality Report reflects the journey we are on as well as insights on top-of-mind topics. Our dynamic platform is updated throughout the year with new blogs, data and insights into trending topics as they arise. We hope you’ll come back soon.