Organizational culture is the topic that introduces the assumptions, beliefs, and values of the organization. From the olden days, audit firms are unique and proprietary structure. The big four companies have a better understanding of the culture audit quality. The questions which attribute to the audit quality are the growth of the advisory services, need for the transparency in the governance, the need for market knowledge, the growth of people in audit, and the use of data analytics in the auditing. As per the recent research, audit firms are valued as per the revenue, competition, global network, and model of partnership, resources, and emerging technologies. Revenue
The source of revenue for the audit firms falls under three categories and they are consultation, tax, and auditing services. Among the three services, the work process offers a high salary for the Big four companies in the advisory services. The big four companies offer the services to domestic companies and global companies. The other services include risk advisory, transaction advisory, and actuarial services. As per the record of 2016, Deloitte is regarded as the audit firm with the highest revenue as of 2016. This company has headquarters in New York City and the fifth-largest company in the United States.
The second place goes to the Pricewaterhouse Coopers which is located in London. In the year 2016, the revenue of PWC stood at $35.9 billion. The audit price and audit quality are interrelated. As per the one report, due to the covid-19 situation, big four companies planning to raise the audit fees. As risky audits and litigation costs are troubling the big four companies there is a rise in the fee from 1200 to 1800 per hour. The complexity in the corporate culture ethics audit process is because of the added compliances, additional manpower, and investment over the IT infrastructure. As there is competition for acquiring new clients, the margins for the Big four firms are under pressure. Big four companies ascertain the profitability based on the overall business. There are no separate lines of practice. Large companies believe in reputation and do not change the auditors frequently.
Big four companies have the structure of partnerships and do not have the model or corporation. Audit firms have the organizational structure as a pyramid model with few managers and partners. The experienced auditors check the conduct of the audit.
The dealings of audit firms can be outsourcing, off-shoring, utilization of data technicians, and performing work in excellence. The audit firm culture process has been redesigned as per the emerging technologies for better quality.
Internal audit trends
Agile method
The agile approach works well with the internal audit for the three stages such as fieldwork, reporting, and planning. This helps for rapid fieldwork and identifies the issues illustrated by the stakeholders easily. This helps for working towards issues during the final phase.
GDPR assurance
GDPR assurance is the data protection regulation from European Union that describes customer data protection. As the adoption of legislation is around the world it is essential to take it as a future trend for the audit firm culture.
Cybersecurity risks
As there are more cases in SEC, US, and PCAOB for cybersecurity it is an essential part of internal audit to mitigate the cyber risks. The audit process needs to accept the cyber risk as it deals with the customer data and information technology usage. The subjects attributed to cybersecurity include cloud technology, cloud security, access management, data protection, identity, and risk monitoring. It is essential to track cybersecurity annually for emerging issues.
Risks from disruptive technologies
As technologies like cognitive intelligence and robotic process automation require assurance the audit should include risk management with these emerging technologies.
Specialized areas in an Audit firm
The article ship training is to examine the documents and information through fair representation. One can get work with a tax audit, internal audit, statutory audit, bank audit, stock audit, insurance audit, ERP audit, SOX audit, and Peer review.
The age of the firm influences the number of clients and the quality of work. The experience from the article ship training depends upon the type of client they are associated with.
Final Words
The cultural shift and technological adoption are part of the changing culture of audit firms. The accounting technologies are helping the industries to make data-driven decisions and improve the quality. One thing which is ubiquitous in the accounting sector is digitalization. The number of clients, type of clients, and goodwill are the factors that help in deciding the company. In an audit firm, to become a partner one needs to start as an employee. The employment ladder in the audit firm goes as an employee, manager, senior manager, associate director, and then finally becomes a partner.
