Multidisciplinary service providers as quality drivers in complex audit and advisory mandates
Auditing today is a challenging, multidisciplinary service covering financial and non-financial reporting, corporate governance, compliance and risk management, as well as being a crucial tool for reducing information asymmetries. In addition to audit services, there is also significant demand for advisory services in the above areas. At association level, it is therefore no surprise that EXPERTsuisse has recently entered into a co-operation with ASCO, the Association of Management Consultants Switzerland.
There is great and growing demand for security and assurance from society and the public, as well as from investors, public authorities and other stakeholders. The corona crisis has made it abundantly clear that the economy and society are highly complex and there is no such thing as 100% certainty. However, it is important to be able to maintain an entrepreneurial approach to navigating even in difficult times. This raises the question of who is best placed to provide support to companies on complex issues.
Auditors certainly have an advantage here, as they already know the company very well and, most importantly, their position means that they are very familiar with its problems and weaknesses. The experience and knowledge of auditors mean that, in addition to performing their clearly defined role in the audit process, they can support companies with complementary assurance and advisory services – while maintaining objectivity and the appropriate critical distance at all times. Auditing historical information is becoming increasingly digitised and efficient, opening up the way for highly complex services to ensure the security and lawfulness of business activities. In this broad sense, auditing includes a variety of assurance and related services.
The desire for security and validated information from both business and society may lead to legislative processes to convert voluntary assurance services governed by contract law into legally required audit services. This is the case for sustainability reports, which are currently the subject of political debate. The simultaneous provision of advisory and audit services to companies is subject to strict compatibility rules. Advisory services, as a third service category alongside audit and assurance services, may only be provided on the condition that the ban on self-auditing is adhered to and the process of mandate awards and acceptance is conscientiously observed.
Digitisation leads to further concentration and advisory potential
Looking ahead, it is likely that quality-enhancing concentration effects in the audit industry will primarily be driven forward by digitisation rather than regulation. Digitisation will also make accounting more efficient. At the same time, digitisation will also lead to further growth in advisory services that extend well beyond the digitisation of financial processes. Innovative audit and advisory firms of all sizes should develop the scope of their advisory business over the coming years to further underpin their key role in supporting the digital transformation of other companies and the industry as a whole. Those that successfully transform themselves can also help others to transform.
EXPERTsuisse and its members are in the process of finding a common denominator for the understanding and differentiation of this three-level service offering – audit, assurance and advisory. Audit and advisory complement and sometimes even rely on each other to ensure that the range of expertise required to provide high-quality services is available.
In the Swiss economy, most companies are supported in this area by audit and advisory firms that are members of ASCO or EXPERTsuisse. These two associations have now entered into close co-operation to make a joint contribution to the current priority of reinvigorating the Swiss economy. The two industry associations also intend to work more closely together on training and in specialist areas.