It is rare that I disagree with Mark Lee but his post on the future of the profession at AccountingWEB struck a nerve with me. In talking about International Standards on Auditing, Mark said:
Audit firms will need to invest in new training and systems to comply, but there won’t be any additional fees so this is simply an additional cost to be covered.
Say what? Time and again it is being shown that the profession is not training people to an appropriate standard, hence many of the problems emerging from the banking crisis. What’s more, it is also clear that risk and compliance management solutions are far from making the kind of audit quality difference one might expect. In my view this means that Big 4 professionals in particular don’t have a choice. Especially if they want to restore their tarnished reputation.
At the same time however, it must seem absurd to be talking about investment when the economy is in such deep trouble and showing signs of unpredictability. Yet that is exactly what I believe professional firms should be doing. Investment now will pay enormous dividends later as the economy picks up. What’s bad about that?
The problem is that investment decisions are almost always taken at the wrong time in the economic cycle. Business invests when times (and cash flow) are good. Assuming you believe that all economies behave in a cyclical manner, that’s too late. Investment is about preparedness not reaction. But then how do you fund investment when credit is difficult to obtain? The obvious answer is to turn capex into opex. That’s another reason why saas could be a better alternative to traditional on premise solutions.
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