Innovating the future of audit

Innovating the future of audit

Innovation is at the heart of our strategy when responding to change

Innovation is at the heart of our strategy when responding to change

Changing how we operate

Innovation is not always a concept associated with audit. Innovation, however, is at the heart of our strategy for responding to the unprecedented challenges and opportunities we face as auditors. - Larry Bradley, Global Head of Audit

We are changing how we operate, being proactive in listening to our stakeholders and embracing technology and new processes that are enabling us to make audit more relevant and to continue to raise the bar on quality.

Core to our mission as auditors is acknowledging the responsibility we have to society and the capital markets.

INNOVATING WITH DYNAMIC AUDIT

We launched ‘Dynamic Audit’ last year, a multi-million dollar initiative to enhance the quality and value of the audit. At the core of Dynamic Audit is an active dialogue with our stakeholders. We have created a unique forum called the ‘Value of Audit’ to hear first-hand what investors, regulators, academics and business executives want from auditors and the wider corporate reporting model. We have already held roundtable discussions in Frankfurt, Johannesburg, Singapore and Toronto, with more to follow.

Our stakeholders have told us they expect more. In particular, they are looking for a broader range of assurance on items that are currently outside statutory financial statements – such as performance indicators, sustainability and other financial and non-financial metrics that drive value for investors. Through Dynamic Audit, KPMG will better understand the broader range of metrics that matter to stakeholders.

Expanding use of data and analytics

KPMG audits continue to be powered by cutting-edge Data & Analytics (D&A) capabilities. And we have undertaken a multi-year investment programs to develop more advanced tools for faster analysis of enormous volumes of data in order to better enable turning data into audit evidence and help uncover added business insights.

Award-winning audit innovation

Another way we are innovating is by introducing ‘Lean’ methodologies into audits. Lean methodologies have been used for years to enhance operational efficiency and business performance, but applying Lean methodologies to the financial statement audit to help enhance audit quality and increase value is a KPMG innovation. A number of KPMG member firms are introducing Lean methodologies into their audits, and the results and responses from organizations have been extremely positive. We are proud that our approach has been recognized as ‘Audit Innovation of the Year’ by the International Accounting Bulletin.

Helping the market adjust to audit reform

Audit reform regulation in the European Union (EU) is the most significant regulatory change affecting the

“Core to our mission as auditors is acknowledging the responsibilities we have to society and the capital markets.”

audit profession in a generation. While the regulation originates in the EU, it impacts many non-EU headquartered clients, for example those with subsidiaries in Europe. We have made a significant and positive contribution to the public policy debate which took place as the European audit reforms passed through the EU legislative process. We have also focused on helping listed companies in the EU, and beyond, understand and prepare for the impact of these audit reforms.

KPMG continues to support the ongoing debate on enhanced auditor reporting and we are supporters of initiatives that will help to enhance audit quality.

 
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The Value of Audit

Auditors should work to understand stakeholders changing needs.

 
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