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2018 Audit Team Trends with Lenny Block

At the end of 2017 we sat down with a panel of a six experts in the audit industry to hear their thoughts on what trends and changes audit teams should expect to see roll out in 2018. Read on for the perspective from Lenny Block, CPA, CIA and Vice President of Internal Audit at the Nasdaq Stock Market.

 

Q: If you could build the ideal audit team for your industry, how many auditors would you have on your team?

 

Lenny: I think that a smaller but more qualified team is better. I’d rather hire three senior auditors than five auditors who are mostly junior. You can get more done with senior people.

 

Q: What would be the specific skillset of each team member?

 

Lenny: This is the million dollar question. You need well-rounded people who are flexible, able to adapt to new situations quickly, and quick learners. Auditors are like internal consultants, so one of their most important skill is critical thinking—understanding of the root causes, knowing how to connect the dots to the facts to determine what it all means at a high level.

 

They’ve also got to be a good communicator with all levels of an organization – from the administrative staff all the way up to senior management, both verbally and in writing. They need to be good listeners—after all, the word “audit” is from Latin and means “to listen”.

 

You also need to have people well-versed in technology. This doesn’t mean they need to be programmers, but we’re in a data-driven world so they need to understand data analytics.

 

In terms of education, you don’t necessarily need to have a CPA. You need someone educated in a business discipline, which would be flexible because we do a lot of auditing in a business environment, so a business degree is important, or even a technology degree.

 

Q: How do you think the audit teams of 2017 and 2018 will differ?

 

Lenny: Audit teams of 2018 should be more well-skilled in the areas I just talked about, including communication, critical thinking and data analytics skills. They should be a little bit more technology focused. It’s a progression of moving the skillset from ten years ago into the next century. But it’s not going to happen overnight or over a year.

 

Q: How do you think changes in the 2017 audit landscape will affect audit teams in 2018? (e.g., PwC was in court at the time of this interview because a regulator is attempting to hold the company liable for losses arising after PwC failed to detect fraud at a bank that later collapsed.)

 

Lenny: I do think that cases such as this could impact audit in 2018. There have been a lot of scandals in the papers recently that show us there are vulnerabilities in companies—for example, the Wells Fargo investigation, the hacking of Sony Pictures, and the hacking of Target. Audit teams are starting to react more to news in the industry and asking, “How could this happen at my company?” Then they focus more on those areas.

 

Q: What role do you foresee data analytics playing in the audit teams of 2018?

 

Lenny: Data analytics has been a big part of audit teams in 2017 and will play an even bigger role in 2018. Each year we expect more data to be available, therefore analytics just becomes proportionally as important to keep up with the data that is out there.

 

Audit teams should be looked at as trusted advisors, as partners in the business. We’re there to help; we’re all on the same team and work for the same company. We’re trying to help the company. We’re not out to get anybody, we’re just trying to make people more aware of risks in their company and things they can do to mitigate the risks. That’s the value of audit.

 

To learn what our other industry experts had to say about these questions, download your copy of the full 2018 Audit Team Trends Report now

 

 

About Anu Sood:

Anu Sood is the Director of Product and Corporate Marketing at CaseWare Analytics and is responsible for the company’s global marketing strategy. Prior to CaseWare Analytics, Anu worked in various roles in the high-tech industry and her accomplishments range from writing software for telephone switches to launching a new global satellite communication service. Anu has extensive experience in strategic marketing, corporate communications, demand generation, content marketing, product management, product marketing and technology development.