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PwC Australia has released its 2021 Audit Transparency Report, which speaks to the challenges the big four accounting firm has had to overcome in the last two years, and how it’s positioning itself going forward as a result.
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‘The most challenging 2 years to date’: PwC Australia reflects and outlines goals ahead
29 October 2021
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PwC Australia’s 2021 Audit Transparency Report has been released this week, providing an overview of how the firm is progressing in response to what it calls “the appropriately high expectations of the regulators, our clients and the market”.
Upon reflection, PwC Australia assurance leader Matt Graham said the past four reporting seasons have been “more complex and uncertain than any in the prior two decades”.
“Looking forward, the short-term challenges for finance teams and the audit profession may be even greater due to the compounding nature of economic uncertainty, additional attrition and the understandable, but ever-increasing, expectations regarding quality,” he said.
“The COVID environment has put a lot of pressure on organisations, auditors and regulators. More uncertainty, significant judgements and a rapid shift to more virtual operations and controls have both increased risk and required new ways of working.
“The past two years have been the most challenging of my 27 year career to date. The Australian capital markets have held up well during the pandemic but it has come at a significant cost behind the scenes.”
As a result of this cost, Mr Graham said PwC simplified its goals in assurance during the last 18 months, ensuring it maintains a people-first approach.
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“Eighteen months ago we simplified our goals in Assurance and told our people that we only had two non-negotiable priorities – their safety and wellbeing and the quality of our work. Everything else came second. We had some conversations with a small number of clients where a combination of our prioritisation of wellbeing and quality and delays in preparation from their side, often for the same reasons, meant that we couldn’t realistically help them meet their statutory deadlines. The majority of clients were understanding and they were often mutual decisions,” Mr Graham said.
“It will get harder before it gets easier. The Australian finance sector, including auditors, significantly relies on expatriates. We have many team members who haven’t seen family for nearly two years and others who’ve been waiting that long for an international work experience. We’ve committed to our team that our wellbeing and quality priorities will not change and we’re determined to co-create with them a plan for 2022 that enables them to be at their best by looking after what’s most important to them personally while at the same time ensuring our audit quality standards continue to improve.
“We’re doing everything we can to communicate with and treat all of our PwC team members in a way that tries to prevent the significantly higher attrition rates that many commentators are predicting for 2022.”
Looking ahead
Going forward, Mr Graham said PwC Australia has a clear vision in mind in response to both feedback and expectations set by its people and the market.
Firstly, the firm is committed to sharing the outcomes of a practice-wide review of its culture as it relates to audit quality, involving nearly 2,000 people.
Secondly, the firm has promised to share more detail on instances of non-compliance with policies relating to audit quality, including independence, learning and education and global file inspections.
Thirdly, the firm is looking to improve both the frequency and detail of specific conversations with clients on their perceptions of audit quality; and lastly, it has committed to share the status of implementation of management actions to recommendations made by the audit quality advisory board.
“We understand that when we commit to transparency we are accountable for continuously improving if we fall short of the standards we expect. We’re confident we’re becoming a better Assurance team together as a result of this commitment over the past three years,” Mr Graham noted.
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