Transparency Report 2021 - Hemione Hudson transcript
I’m really proud of the agility and resilience our people have shown over the last 12 months. They have continued to perform rigorous and challenging audits throughout the pandemic even when the height of the reporting season coincided with tight lockdowns and homeschooling.
And- the last year has not only been about the pandemic. The external environment has also been challenging with the continued focus on Audit Reform, operational separation and the government consultation on reforming the UK’s corporate governance, audit and reporting regime. As the responses to the consultation are considered by BEIS, I encourage all interested parties to continue to engage with the debate.
Throughout it all we’ve remained focused on audit quality. We continue to invest an additional £30m annually in our Programme to Enhance Audit Quality (or PEAQ as we call it) which is made up of four workstreams….
The first workstream is structure and governance. This is all about setting the right foundations that support our objective to perform consistently high quality audits. This year we set up our Audit Oversight Body to provide independent oversight, governance and challenge to the practice.
The second workstream is culture and recognition. We are focused on creating a culture that recognises and rewards the behaviours that support audit quality. Our specific audit behaviours, are Team first, challenge and be open to challenge and take pride and we are embedding them in everything we do from performance appraisals to team meeting agendas.
The third workstream is Supply and Demand. This is about having the right number of auditors with the right skills and experience to be able to deliver high quality. Since the implementation of PEAQ two years ago, we’ve recruited over 950 additional experienced auditors and continued to recruit graduates and school leavers too, virtually onboarding more than 700 people this year.
Attracting and retaining people from diverse backgrounds is core to our strategy. We’re committed to widening access to our firm and profession, and our Flying Start Degree Programme is part of that allowing people to earn while they learn. This year, we’ve expanded the programme with London’s Queen Mary University who are known for their work supporting social mobility. We’ve also focused on promoting inclusion and racial equality and have implemented a number of specific actions including a mutual mentoring programme for our Audit leadership teams.
And finally the fourth workstream is Quality Control Activities. This workstream is about how we set standards and guidance, support teams during an audit and assess the quality of our work so that we can learn lessons and continually improve what we do and how we do it.
Training and development are critical to supporting our people in delivering audit quality. Importantly this year we were able to maintain our training and development programmes virtually as well as introducing new training on supervision, coaching and review.
While I recognise there is still more to do, I’m encouraged by the results of the FRC’s Inspection & Supervision report this year. Our improved results demonstrate the positive impact of the actions we’ve taken through PEAQ.
Auditing this year has posed new reporting and accounting challenges as previously unthinkable scenarios have become plausible. Over the last 12 months we’ve held numerous technical panels composed of our most senior practice partners to support our engagement teams in making difficult judgements. Many of these panels considered the validity of going concern assumptions during these unprecedented times.
As we look ahead we will continue to upskill our people and invest in technology that enhances quality through standardisation and automation. As non-financial audit in areas such as ESG and climate change become increasingly important, our work will continue to make a real difference. It’s an exciting time to be an auditor!
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