Restoring trust in audit and accountancy

The audit and accountancy professions have endured a tough few years. High-profile corporate collapses and other accounting scandals have caused significant reputational damage. Meanwhile, the constant tinkering with the tax system by successive governments creates continual challenges for advisers. Additionally, the relentless march of technology means professionals must adapt or risk becoming outdated. Here we examine some of the challenges facing accountants, auditors and tax professional and look at how training can help provide some answers.

Root-and-branch reform

The collapse of builder Carillion, retailer BHS, energy group Bulb and upmarket bakery Patisserie Valerie are amongst the high-profile corporate failures that have blighted the auditing profession in recent years.

These scandals have prompted government-backed reviews that recommended root-and-branch reform of auditing and corporate governance.

New systems

Changes to the way the profession operates through reforms and a shift of complex audits to smaller firms bring their own challenges, particularly around about quality and resourcing levels.

The latest ICAEW audit monitoring report showed that 30% of audits are below standard as auditors try to get to grips with new systems and methodologies.

Overall, 71% of audits were deemed good or generally acceptable, unchanged from the previous year, according to the latest ICAEW audit monitoring report 2023/24.

However, performance was down significantly on pre-pandemic results when 78% of audits achieved the same quality standard. Additionally, 8% of audits required ‘significant improvements’, up from 7% in the previous year.

Clear commitment

The ICAEW says: ‘There are indications that audit quality is being challenged by changing market conditions with an unprecedented movement of complex audits from larger to smaller firms which is requiring those smaller firms to move quickly to upscale their risk and quality processes.

‘Every firm needs to have a clear commitment to invest in a robust system of quality management to support audit quality alongside their commercial objectives.’

All change

The level of change to the UK tax system is at an all-time high. The last government made reductions to National Insurance contributions, abolished the furnished holiday lettings tax regime and made multiple adjustments to tax allowances that impact on both businesses and individual taxpayers.

The new Labour government has pledged the removal of VAT from school fees and look set to make a number of other changes in its first Budget for 15 years as it seeks to fill a £22 billion blackhole in the public finances.

Proven potential

Accountants and auditors must also respond to a world shaped by rapidly changing technology with the use of AI growing fast in the industry.

AI has proven its potential when it comes to efficiency, creating new and exciting career paths and enabling workers to focus on higher-value tasks. However, questions remain in the workplace around its capabilities and limitations – including risks and possible overreliance on AI solutions.

Vital knowledge and skills

Given the challenges facing the industry it is vital that auditors, accountants and tax professionals compete keep their knowledge and skills up to date by maintaining their Continuing Professional Development (CPD) requirements.

Mercia’s 2025 Training Programme makes it easier for firms and individuals to identify the CPD they should be completing over the year. The programme bundles courses together into suggested pathways to help professionals meet their verifiable CPD hours.

For those looking to adapt to new technologies, the Future Ready Series helps firms and professionals understand and develop the skillsets needed to think differently and thrive.

In addition, Mercia’s award-winning Early Careers Auditing Skills Series offers a fresh approach to audit training and is designed to be completed at the most appropriate time for your trainee’s role and experience.