The Practical Aspect: Today's Interdisciplinary Auditors

The job of auditors has always been interdisciplinary. At the core of the auditor’s professional development is a multitude of disciplines—including accounting, taxation, risk management, forensics and business—and skills related to information systems, communication, teamwork and project management. These have been vital in building success in an auditor’s role. At its very core, the profession recognizes the multidisciplinary nature of its accountability.

Today’s interdisciplinary auditors are no different, except that what might have been termed peripheral disciplines (e.g., information technology, forensics, data analytics) have become critical prerequisites to effective role playing. For example, the cloud computing environment makes the task of verifying transactions and testing controls more challenging, and the emergence of voluminous qualitative and quantitative data pushes the auditors to creatively analyze information to corroborate what they observe from the traditional financial transactions.

Disruptive technology, competitive forces and changing consumer preferences—in part due to the technological revolution—have forced businesses to dynamically search for and respond to emerging strategic gaps in their business models. Walmart and Target, for example, strive to calibrate their online sales avenues as Amazon shows greater strength in its consumer-friendly, innovative reach to markets. This changes the very face of the business that the auditor is tasked to audit. While existing businesses may change dramatically, businesses such as Facebook, Twitter and LinkedIn emerge with a very different social structure bonded with their revenue generation processes. Because auditors audit transactions, and transactions vary with the underlying business model, the context is as critical as the content central to the auditor’s assurance.

Without a good understanding of the business drivers in place, the auditor would be ineffective in delivering his or her promise. For delivering value, the auditor must keep up with not just financial accounting and reporting standards and auditing standards, but also with all relevant peripheral disciplines. Take, for example, fair value measurement of intangibles and intellectual property. “The newer class of intangibles and intellectual property assets raises varied and less understood valuation challenges.&rdquo In recent years, business valuations for fast-growing start-ups could be fairly detached from the current or future profitability of the business. As more businesses enter or prepare to enter the public domain, it is critical for auditors to develop and support their valuation judgment. Sure enough, most complex audits are a team effort; in fair value measurement, for example, the auditor may employ or engage an appraiser. Thus, the lead auditor may recruit team members strong in disciplines where he or she might not be hands on. But this does not exempt the lead auditor from having a good understanding of what goes on underneath and how this creates new risk or changes the existing ones.

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