Panorama 02.14 www.AuditFutures.org

auditFutures aims to inspire a global discussion about the 21st century role of the profession and to prototype innovations in audit for a better society.

The second half of the 20th century was remarkable for the sheer number of individual entrepreneurs, thinkers and leaders. The first decade of the 21st century marked the birth of new social movements, new organisational dynamics and new ways for people to connect and work together. This new paradigm of social organisation will welcome modern networks of professionals – dynamic, open, responsible and progressive.

AuditFutures aims at repurposing the role of the audit and accounting professions for 21st century society. We want to look beyond marginal and incremental changes in audit, mandated by the business and regulatory

landscape. If audit has an aspiration to serve society and remain relevant to the public interest, it has to engage with a greater range of stakeholders and invite critical thinking and constructive debate.

We hope to become a catalyst for change and to inspire the profession to take responsibility in determining it its own fate by leading the discussion on the future of our society. By working across the audit and accounting professions at international level, we are building programmes to help and enable innovative thinkers and ‘tempered radicals’ to develop thinking and ideas on the future of audit.

A fundamental aspect of our work is to invite diverse and divergent perspectives to the debate. No single organisation can tackle the wider systemic issues that we are facing today, so this is why we are working by building partnerships and collaborations. We believe that engaging in diverse views will stimulate the debate beyond our comfort zone and

generate innovative ideas and creative solutions.

We focus on thought-leading ideas that have the potential to drive systemic effect and develop solutions for wider impact. By taking an action research approach, we are creating a community of practice to improve the way we work on specific issues.

our objectives: À Convene and build a diverse community of leaders from the accounting profession and civil society

À Prototype and develop systemic solutions that inspire cultural change

À Develop thought-leadership and influence the debate

À Design a vision for the future of audit in 21st century society

our Principles À Create a safe and creative environment where good ideas could flourish and collaborative relationships prosper

À Develop bottom-up, transparent and highly participatory processes, driven by enthusiasm and commitment from a diverse community

À Promote a holistic view of the profession and ensure open enquiry to understand the sources of the problems and develop systemic solutions

À Focus on inspiring and game-changing innovations and less on incremental improvements

We invite you to a conversation worth having.

How do we inspire the profession?

In most ‘groundhog-day’ discussions of the past, the profession has looked at individual areas without considering others. We have to review all aspects of our work and understand that they are not static but are dynamic, interdependent. Through open inquiry and action research, we have identified four essential areas, which enable a comprehensive analysis of the existing profession and further provide us with key areas where we should focus our work. With the insights from the working groups of two AuditFutures assemblies and well over a hundred in-depth interviews and consultations, we have distilled our collective insights into four coherent areas of innovation that we believe are needed to drive systemic change within a profession:

This model defines four dimensions: societal, institutional, technical and human. Our theory of change is that in order for real progress to be made, we need to be able to pause, step back and reflect on all four areas all together

in order to go forward. We must also reorient our collective thinking; it needs to be more joined up, multi-layered and multi-dimensional.

our aPProacH

SOCIETYSocietal Perspective

VISION • ROLE • RESPONSIBILITY

WHATSCOPE

Technical PerspectiveWHOPEOPLE

Human Perspective

WHYWHY

HOWINSTITUTIONS

Institutional Perspective

METHODS • APPLICATIONS • PROCESSES

MODELS • CULTURES • STRUCTURES

PROFESSIONALS • COMPETENCIES • BEHAVIOURS

Why do we need audit andwhat is the role of the profession

in 21st century society?

What are the characteristics and approaches of audit and what innovations are needed to best

serve society?

How is audit delivered and what are the business architectures

that can bring betteroutcomes?

Who are the professionals that can inspire change and what are

the ideal leadership qualitiesfor the 21st century?

Society

Audit should be viewed in the wider social context, considering its function and higher role within society, today and tomorrow. We want to take this conversation above what is legally required from audit and beyond the minor incremental changes in audit and assurance standards. It is very important to look at new areas, consider future scenarios and bring new voices that provoke a more intellectually stimulating social debate.

Scope

There is a real challenge to the relevance of audit in a world of growing information complexity, where financial data could only provide a very limited view of business. There is a growing need to develop solutions for assurance on a diverse range of information and to make audit open to methods like crowd-sourcing and distributed data analytics.

Institutions

In the search for institutional changes that will enable us to do audit better, we have to re-evaluate the function and governance of the profession: the structure of the firms and markets, the policy process and our regulatory framework. There is a need to move away from old cyclical arguments into new engaging discussions that actively question and prototype solutions.

People

Audit is a people-driven economy and a key area of our work focuses on inspiring a socially minded professional culture. We want to explore the new competencies and qualities needed for a modern profession and to engage students, young professionals and leaders in designing the future of the profession.

The aim of AuditFutures is to construct a holistic view and a systemic approach to rethinking the profession. We are currently working on a number of interlocking levels to encompass the whole system – through action research, thought-leadership, and practical engagement on the ground.

Enlightening professions: a vision for audit and a better society

In order to continue to be relevant, the profession has to take responsibility in determining its fate and to proactively engage with the public that we aspire to serve. In partnership with the RSA, the UK’s leading multi-disciplinary think-tank for social progress, we are developing a thought-leadership project on the future of audit. This ambitious engagement with the wider society aims to redefine the role of the profession

within the modern context of the public interest and to formulate a vision for the highest aspirations of audit in the 21st century.

Gamechangers network

If we want to accelerate the capacity for innovation within the profession, we need to mobilise and connect “game-changers” from different organisations. We have built a structured programme that allows peers from different firms to build and implement innovations together. Such an entrepreneurial network will not only inspire positive discussions in the accounting firms but will also lead the public to regain trust in audit and assurance.

We are now accepting applications - please visit www.AuditFutures.org/GameChangers for more information.

WHat ProGrammES arE WE WorkInG on?

auditFutures university

To attract a diverse group of individuals and inspire the next generation of professionals, we need to capture the imagination of students by actively engaging them in debates about their profession. We are hosting annual workshops that build bridges between academia and practice, and encourage a more positive and constructive discourse about audit. Our workshops bring together students, academics and professionals for interactive and in-depth discussions that tackle topical issues and core philosophical questions important for the evolution of audit.

Designing the future

To innovate and transform the profession for the 21st century, we need design-thinking that embodies empathy, bold experiments and collaboration. In partnership with the Royal College of the Arts, we are undertaking a co-

creation process that uses new ways of seeing, new ways of thinking, and new ways of asking questions to unlock opportunities for the profession to gain public confidence and deliver trust in society. We aim to build designer-led teams, which include professionals and students, to develop radical and innovative solutions.

Professionals XXI

To capture the enthusiasm of trainee chartered accountants, we are developing programmes that will engage peers in discussing the role of auditing and accountancy within society. In partnership with accounting firms, we will pilot workshops for junior professionals to discuss topical issues and to inspire them to take an active role in driving the profession forward. The sessions will be complemented by annual assemblies at ICAEW and workshops at individual firms.

a vision for audit a better society

This report is a partnership with the RSA. It draws on a literature review, a call out for evidence through the RSA Fellowship, semi-structured interviews and a variety of contributions from people inside and outside of the audit profession who became aware of the project. We invited people to look to the future and take a view of what value audit could bring to society in the 21st century, either as a practice, or a profession. We found the audit profession in a reflective mood. Of the more than 200 people we interviewed or who fed into the project, the majority were auditors, and most were keenly aware that their profession faces searching questions. Thrown into the spotlight by the 2008 financial crisis, it is grappling with the consequences of long-term changes in business, technology and society.

The struggle is unusually public, but the issues it faces are shared by many other traditional professions, whose value is

EnlIGHtEnInG ProFESSIonS

challenged by our inexorable move into a demanding, global, data-rich and trust-poor world.

We believe that the decisions made by the audit profession in the coming years could prove influential in shaping the future value of professionalism. We hope that this report will serve to encourage greater collaboration and debate across all the professions.

Detailed discussions about regulations, standards and processes are important and arguably plentiful, but they tend to focus on specific failures and they can be sourced extensively elsewhere. However necessary they may be, their focus on incidents and events tends to confirm audit within its backward-looking comfort zone. This report offers a place for the profession and its peers to look forward, to assess the bigger picture and express their highest aspirations.

the spirit of this report is different.

It encourages the profession to go beyond Groundhog Day and seize the initiative as the best way of repairing trust, sparking innovation and increasing the economic, social and environmental value it generates. We suggest that it aims high, not just by finding more efficient ways of doing what it does today, but by playing an active role in influencing the development of a society – and within that, an economy – that is better informed by the standards, skills and insights of audit

You can download the full report from our website.

ENLIGHTENING PROFESSIONS?

A vision for audit and a better society

PAUL BUDDERY, STEVEN FRANK AND MARTIN MARTINOFF | FEBRUARY 2014

leaders of the 21st century profession

We strongly believe in the unlimited potential of connecting top professionals together - visionaries, creative thinkers and purpose-driven leaders - influential and bold implementers who share experiences and insights from many sectors. If thinkers from the coffee-houses in the past brought us the Enlightenment, what could a diverse group of people with strong convictions achieve for the profession tomorrow?

We need more than just isolated innovation events and moments of serendipity. Therefore we are creating a network of game-changers who want to build new leadership for the profession in the 21st century – collaborative, connected and dynamic. We are calling on people who are determined and committed to building something bigger than self, to learn from each other and to exchange new ideas.

The structured programme of the GameChangers Network will create a safe and creative space where people from across the profession can work together to develop and pilot their ideas. We all know how it may be almost impossible to innovate when risk has a high cost for an organisation. True innovators need a protected space for experimentation, where they can take risks and learn from mistakes.

This will help us focus on systemic ideas and solutions to the challenges that the profession and society are facing. Even large organisations might present narrow viewpoints rather than looking at the bigger picture. As a multi-disciplinary group from the professional community, we can have a bird’s eye view of the auditing profession and develop ideas and solutions that will have long term effects and address systemic challenges.

GamEcHanGErS nEtWork

What will the network look like?

Participants from a range of organisations will come together to mobilise ideas and innovations for the audit profession in the 21st century. We are seeking to recruit professionals with leadership aptitude who want to serve a higher purpose, above and beyond their own self-interest.

This dynamic group will start off with thirty visionary and creative thinkers who have audit and accountancy experience and the ambition to deliver challenging projects.

What we will do?

Our goal is to establish a self-sustained and growing group with ongoing support from AuditFutures.

We will start by recruiting thirty professionals from a diverse range of organisations. The network will meet together for seven intensive full-day sessions. Each session is designed

to help participants discover, design and build innovations with systemic effect. Workshops will be supported by visiting speakers and coaches with expertise in innovation, design thinking, social networks and leadership. Most importantly, participants will learn from one another: innovators from genuinely diverse backgrounds will broaden their knowledge and have a chance to challenge each another’s assumptions.

We are now accepting

applications!

Visit our website for more information

and to submit your application

(Deadline 28th march)

www.auditFutures.org/Gamechangers

Now is the perfect time to rethink how education could inspire and engage with the next generation of professionals. We believe that the role of universities should be to solve global problems, to reinvigorate the accountancy profession and redefine its goals for 21st century society. The university is the perfect place to promote professions and attract diverse and talented young people who will lead the next generation of practitioners.

The aim of our programme is to act as a bridge between academia and practice, and to inspire a more positive and constructive discourse.

our approach

Part of our engagement with universities aims to initiate discussions and to facilitate workshops that use a philosophical inquiry process to debate and reflect on the topics of morals, ethics and innovations that can advance audit in the 21st century. In actively engaging

auDItFuturES unIVErSItY

students and academia in this debate, we aim to challenge current thinking and perspectives, and instead inspire new ideas by introducing students and future auditors to contemporary challenges facing the professions.

In discussions with students, the sessions will aim to crowd-source and analyse the set of competencies, skills, qualities and values, essential for accounting students and future auditors in the 21st century. This will further help us understand what strategic (institutional level) and behavioural changes (individual perceptions and abilities) should take place and how we can support their development.

We aim to foster constructive and informative sessions that will move away from the blame game directed at academia or the profession, and instead explore approaches and theories of change that both sides could discuss and develop together.

The workshops will be carried out within the participating universities as single half-day sessions, which university students from undergraduate and graduate programmes will be invited to attend. Led by AuditFutures, in partnership with academic staff and professionals, the sessions will facilitate discussion and challenge thinking by embedding a proven philosophical approach and encouraging self-reflection and creative thinking.

upcoming events: À 10 March: Manchester Business School

À 2 April: Cardiff Business School

À 3 April: University of Hertfordshire

To innovate and transform the profession for the 21st century, we need design-thinking that embodies empathy, bold experiments and collaboration. In partnership with the Royal College of Art, we undertaking a co-creation process that uses new ways of seeing, new ways of thinking, and new ways of asking questions to unlock opportunities for the profession to gain public confidence and deliver trust in society. We aim to build designer-led teams, which include professionals and students, to develop radical and innovative solutions.

Design students are now leading this project by working with the AuditFutures community and other leading professional institutions. They aim to create an active link that connects the future of the profession with the needs of modern society.

Design students will collaborate with our AuditFutures team to design and develop future services that improve the development of trust between

DESIGnS For tHE FuturE

organisations, communities and individuals.

Students will use a variety of research methods to understand stakeholder needs, the landscape of trust and auditing services, and the opportunities inherent in new tools, technologies and business models.

They will develop personas and user journeys to use in co-creation workshops in order to create plans for new trust based interactions and interfaces that can be blueprinted and tested with the ICAEW and partner organisations.

We hope that in their work, design students will develop a number of alternative blueprints for new models of ‘economic’ trust and tangible evidence of future auditing tools and reporting systems.

ICAEW is a world leading professional membership organisation that promotes, develops and supports over 142,000 chartered accountants worldwide. We provide qualifications and professional development, share our knowledge, insight and technical expertise, and protect the quality and integrity of the accountancy and finance profession.

As leaders in accountancy, finance and business our members have the knowledge, skills and commitment to maintain the highest professional standards and integrity. Together we contribute to the success of individuals, organisations, communities and economies around the world.

Because of us, people can do business with confidence.

www.icaew.com

The Finance Innovation Lab is an incubator for positive change in the financial system. Co-convened by ICAEW and WWF-UK and launched in 2008, the Lab aims to create a financial system that works for people and for the planet. We build communities of innovators and advocates who are creating a better financial system, help them grow as leaders and scale their work through a series of incubator programmes. AuditFutures is one of them.

www.TheFinanceLab.org

© ICAEW 2014

AuditFutures is a thought-leadership programme of ICAEW, run in partnership with the Finance Innovation Lab