The evolution of audit skills in an era of complex regulation, disclosure and increasing transparency

Talent is the lifeblood of any organization, but attracting and retaining the right people is no mean feat. Recently I’ve had several opportunities to share a stage with the EY Global Assurance technology leaders to discuss the many opportunities and challenges that the industry faces in its efforts to build the workforce of the future.

Themes rightfully focused on emerging technologies, including generative artificial intelligence (GenAI); technologies deployed today, such as advanced analytics and natural language processing for automation of repetitive tasks; enhanced risk assessment; and improved audit quality.

In our discussions, I stressed that our working world would be complicated enough if it was just about keeping pace with technology; however, we also face continuous change. The rise of complex regulations, the demand for greater disclosure, and the push for increased transparency have contributed to a shift in the skills auditors need to effectively perform their duties.

For example, investors, stakeholders, and the public at large are demanding more information about the companies they invest in or do business with. This has led to an increased need for enhanced disclosure in areas such as environmental, social and governance (ESG); cybersecurity; and supply chain management. Auditors are now expected to provide assurance on a wider range of non-financial information, meaning they need a deeper understanding of the businesses they support.

You might expect a Talent leader to say this, but it is critical we help to ensure our people are the focus of these transformation efforts and that we help them embrace new forms of technology, collaboration, and learning. EY firms have long demonstrated that with this approach – what we call putting Humans@Center – we create a growth mindset and build agility into the DNA of the organization. This helps everyone prepare for whatever comes next.

The traditional audit skill set has been redefined

Traditionally, auditors have been primarily expected to possess strong accounting knowledge, attention to detail and an understanding of financial reporting standards and regulations.. As gatekeepers of financial integrity their skills have been centered around technical expertise in accounting principles and auditing standards. These fundamentals are not changing, but a whole host of new required skills are emerging in this fast-changing world.

In my recent conversations, one question has come up repeatedly: What do you predict will be the future skill set for auditors over the coming years? To answer this, I believe you need to look at the ongoing trends in technology, regulation, and business practices. The core competencies of accounting and auditing won’t change, but I deeply believe the following five skills will grow in importance as businesses increasingly rely on them to drive innovation, efficiency, and competitive advantage:

Data analytics and interpretation: As businesses generate more data, auditors will need to be ‘superusers’ of data analytics tools. This skill will be crucial for risk assessment, fraud detection, and providing valuable business insights.

Technological proficiency and cybersecurity knowledge: Auditors will need to be more than familiar with the latest technologies in finance and accounting, including AI, machine learning, blockchain and robotic process automation (RPA). Understanding how these technologies impact auditing processes and financial reporting will be key. The rise of cyber threats means auditors need to understand cybersecurity principles and how to assess an organization’s cyber defenses. This includes knowledge of IT controls, data protection laws and incident response plans.

Critical thinking and problem-solving: Auditors have always needed to apply critical thinking to analyze complex situations and develop solutions to emerging challenges. But it’s now arguably more important than ever that they have the ability to question assumptions, evaluate evidence and consider alternative perspectives. Equally crucial is the ability to maintain professional skepticism – it is one of the foundations of everything we do and is essential in a world where trust and integrity are more important than ever.

Communication and interpersonal skills: As the role of auditors expands, the ability to be transformative leaders and communicate complex information clearly and effectively will continue to be vital. Auditors need strong interpersonal skills to collaborate with a greater range of stakeholders and work in diverse teams. Human skills, in other words, will remain crucial and will be augmented by – not replaced by – AI.

Sustainability: The rapid growth in sustainability and the associated requirements for additional reporting mean auditors need to build a detailed understanding of the ‘alphabet soup’ of reporting standards, such as the CSRD, IFRS, and TCFD, that are being implemented around the world. But sustainability is so much more than the technical skills needed to unpack rules and regulations. It is a huge subject area which presents an incredible opportunity – especially for those new to the profession – to build and perfect the full gamut of skills that an auditor now needs. Beyond that it’s a chance to apply these skills to positively impact how businesses operate and to help them forge a sustainable future. It’s too broad to be treated only as a skill, but too important to be left off this list.

 These skills reflect the evolving nature of the audit profession, where technical experience is increasingly complemented by analytical, technological, and soft skills – which I like to call business skills, as there is nothing soft about them. Auditors who adapt and continue to develop themselves will be well-positioned for success in the future.

My last word of advice is that as we now expect auditors to be life-long learners – part traditional accountant, part technologist, part data scientist, part master communicator and part futurist – they should demand that employers prioritize learning, development, and incentives. This is essential if they are to be ready to execute required change.

Employers who underestimate the importance of this human component of change – and the responsibility of both parties – will not see the full value of transformation. Fundamentally, this mindset means hiring and encouraging employees who are oriented toward learning, so they futureproof themselves while building an organizational culture that supports their continuous growth, evolution, and the new definition of an auditor’s required skill set.