Technology has so captivated the auditing sphere that at first glance, it seems machines seem to be stealing the spotlight from humans. But technology, while it can undoubtedly make jobs easier and more efficient, doesn’t replace the unique skills that human intellect, judgment and leadership bring to the table.
ust because auditors approach their work with a level head doesn’t mean their clients are in the same place.
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While humans’ continued involvement in the auditing process goes without saying, auditors need to master, or improve upon, certain competencies that will ensure their continued success. These competencies are fundamental to advancing audit quality and need to be used in conjunction with innovation. Here are five competencies we see as essential.
1. Strong communication skills. The KPMG/Forbes Insights report “Audit 2025” surveyed 200 respondents, including audit committee chairs, CFOs and controllers. Collectively, they named communication as one of the top skills they seek in an auditor. In fact, it’s core to an attribute that clients value most: the ability to articulate a clear point of view on the issues (picked by 62% of respondents, compared with 46% just two years previous). In fact, communication skills (66%) were ranked virtually as important as technology skills (67%), making it one of the two top-ranked qualities auditors of the future must possess.
What do communication skills look like in action? For the successful auditor, it means clearly conveying thoughts, ideas and suggestions during meetings, presentations, interviews, and negotiations with audit clients and executives. As “Audit 2025” notes, “Long gone are the days when auditors said, ‘You are in compliance. End of report.’”
2. Emotional intelligence. Just because auditors approach their work with a level head doesn’t mean their clients are in the same place. Whether they’re frustrated over disorganized financial records or anxious about uncovering a potential fraud, clients need the steady hand of an auditor who excels at keeping composure and making sure the bull’s eye—an accurate, exhaustive audit—remains squarely in sight.
A study published in March 2018 by the International Journal of Auditing, and conducted by business school researchers from Longwood University and Virginia Commonwealth University, concluded that emotional intelligence improves audit quality. The researchers add that “the moderating influence of emotional intelligence…is a significant mechanism that moderates the effects of different types of pressure on auditors’ judgments.”
3. Critical thinking and business acumen. This equates to objective analysis and evaluation of the information and facts contained in an audit that can produce actionable insights—or in many cases, the questions that inspire them.
“I’m impressed when auditors ask the right questions and make suggestions that show they understand the industry their client is in and how the organization functions,” says Jeffry Haber, accounting professor and department chair at Iona College. In keeping with this ability to ask the right questions, a successful auditor also needs to have business acumen and be able to connect the dots, bringing lessons from his or her own experience, to help a particular client.
4. Professional skepticism. In its 2018 document “Enhancing Audit Quality and Transparency,” KPMG delineates the role skeptical thinking plays in the design and execution of an audit engagement: “KPMG’s judgment framework addresses how to recognize and overcome biases in making judgment and applying appropriate professional skepticism.”
Above all, professional skepticism requires the strength of character to avoid shortcuts and reexamine facets of the audit if anything seems amiss. For example, it’s easy to automatically accept all the information provided by a client as gospel truth. Skeptical auditors will ask themselves, “Am I getting the true picture?” and carefully follow the chain of audit evidence for assurance.
“To produce a high-quality audit, auditors must exhibit professional skepticism,” says Jeffrey Cohen, professor of accounting at Boston College. “They must be able to question clients in an objective and constructive way.”
5. Interpersonal skills. For all the technical acumen, compliance knowledge and numerical exactitude auditing demands, at its core, it is also very much a business of people—of dealing with all types of clients in all types of situations. For the successful auditor, exceptional people skills are a must. Empathy, for example, allows an auditor to better understand the client’s perspective as the audit operation progresses.
Another facet of superior interpersonal skills—especially for auditors—is the ability to listen. Some financial services professionals refer to this as the “80/20 rule,” named for the ideal ratio of time dedicated to listening versus talking. Active listening that seeks to understand and comprehend also proves invaluable within audit teams and within the firm. In fact, “auditor” derives from the Latin word that means “listener” and “hearer.”
In the final analysis, how do these skills work? The answer: collectively. Just as no one aspect of an audit can be siloed from another or take a backseat throughout the process, these five fundamental skills must be practiced simultaneously and continuously. Auditors who meet that challenge can attest to this good news: All five do not add up to total effectiveness—they multiply it. In an age of audit revolution via technology, they form the foundation upon which all audits—past, present and future—are built upon.
Download the full report here.
