Flying the Skies of Audit Quality

My new role as PwC ’s Global Assurance Leader means I spend a lot of time on planes getting from one country to another. The other day, I got to thinking about the relationship between pilot and passenger. One would not exist without the other – without pilots, we’d be grounded, and without passengers, there would be no reason to fly. We also share a common goal: a safe, well-executed flight. 

Our audit ecosystem operates in much the same way. None of us wants to see the others take actions that put us in harm's way.

I’ve had the opportunity to connect with auditors, regulators, standard setters, academics and investors in Singapore, Madrid, Dublin and London – and that was just in the month of June!  

What we all share, regardless of geography, language or role, is a passion for investor protection (among others) and our profession. Yet, despite the fact that we all share the same primary interests, sometimes we are considered as being on opposite “sides.” There are a few steps we can take that will help promote a safe journey and collectively reach our destination for a strong ecosystem, together: 

1. Create a shared “flight plan.” Audit quality is more than just the outcome of an auditor’s work; it also reflects the effectiveness of a multiparty ecosystem that spans the preparation, audit, delivery, and use of decision-useful disclosures. By all parties involved working more closely toward a common interest, auditors, regulators, standard setters, academics, audit committee members and investors can create a stronger, more reliable audit environment that serves the public interest effectively. Such a system will also be more nimble, and can evolve more quickly as investor demands and technologies change. This means establishing a culture of cooperation where all stakeholders actively engage in an open dialogue and share perspectives and best practices. Cooperation also helps build a robust framework that not only identifies potential risks but also implements proactive measures to mitigate them. 
2. Assemble the right crew for the journey. Organizing roundtables can help identify solutions to the most persistent problems in auditing. Bringing together diverse perspectives can lead to innovative and practical solutions. These roundtables should be inclusive, inviting voices from all corners of the disclosure system to ensure a comprehensive understanding of the issues at hand. By fostering an environment of collaboration, we can tap into collective wisdom and develop strategies that are both effective and sustainable. 
3. Use data to make sure you get to where you want to go. Rooting actions in empirical, transparent observations ensures that our decisions are informed and effective. More data and expertise will lead to more robust solutions. This requires a commitment to rigorous research and analysis, backed by investor input. By leveraging empirical data, with auditing expertise, we can better understand market dynamics and tailor our audit processes to meet the evolving needs of stakeholders. Transparency in what’s working, what’s not, and where differences of views arise can ultimately enhance learning, trust and credibility. 
4. Invest in our collective safety. All participants must invest in quality. This includes not just expert resources and financial investment but also a commitment to continuous improvement and adherence to strong standards. Investing in advanced technologies, such as artificial intelligence, used responsibly, can significantly enhance audit quality. Furthermore, fostering a culture of continuous learning and professional development ensures that auditors remain well-equipped to handle emerging challenges and complexities. 
5. Make sure you have the right pilot in the cockpit. Leadership plays a crucial role in setting the tone for integrity, transparency, and excellence in auditing. It’s essential for top management to champion these values consistently. Leaders must embody the principles they espouse, demonstrating a commitment to ethical conduct and accountability. By setting a strong example, leaders can inspire their teams to uphold the highest standards of professionalism and diligence. This top-down approach ensures that integrity and excellence permeate every level of the organization. 

Just as with air travel, following all of these steps doesn’t guarantee an error free trip, every time. But just as I wouldn’t want the next airline I fly to skip their pre-flight checks and skimp on their safety budget, we should all work collaboratively to make sure we’ve got the infrastructure and investments that will give us the best chance of safeguarding the system that we are passionate about protecting. It’s a journey worth taking.