Australia’s auditing profession is currently facing a critical shortage, as highlighted in a recent report by Chartered Accountants Australia and New Zealand (CAANZ).
Despite significant investments in recruiting and training auditors, the skills shortage remains dire, prompting calls for policy changes and proactive measures to address the issue.
The Scope of the Shortage
The shortage of external auditors is exacerbated by the declining number of domestic students enrolling in accounting, management, and commerce degrees. This trend is widening the skills gap at a time when employment in accounting occupations is predicted to grow by 8.5% in the next five years and 16.8% over the next decade.
Consultation with Australia’s major professional service firms has revealed progress in recruiting, onboarding, and training initiatives. However, these efforts have not been sufficient to address the shortage. There are many forces at play here, including increased demand for auditors, however, the root of the problem on the supply side lies in an ongoing domestic decline in interest in the profession, loss of talent to other occupations, and the challenges of attracting and retaining talent, particularly in regional areas.
Concern about work-life balance has affected the recruitment of auditors
Auditors are typically required to work significant extra hours during peak reporting periods. Historically this has been contrasted by quiet off-peak periods. However, these quiet periods are becoming a thing of the past, with interim audits, March and December year ends, and other service offerings, including SMSF audits, Internal Audit, and other assurance and non-assurance services. For auditors, this results in no respite and can lead to burnout.
The COVID-19 pandemic has reshaped how auditing is conducted. Remote auditing has now become an accepted practice. This represents a significant opportunity to restore work-life balance and embrace work flexibility within the auditing profession. Audit firms must now recognise that work will be undertaken at different times at the work office, at the client’s premises, and within the home office environment.
Talent Attraction requires a focus on diversity and inclusion
Historically, the audit industry has supplemented staff with experienced auditors through overseas secondments. Diversity of background and experience has positively influenced the workplace culture and performance. Domestic and international recruitment campaigns bring a real opportunity for audit firms to continue to focus on diversity and inclusion.
Retention of staff at all costs is not necessarily the best strategy
The traditional career path of staying in a single job for many years is becoming outdated, especially for Millennials and Gen Z. Younger workers are keen to gain a wide range of experiences, such as consulting and data analytics, to enhance their professional growth. Instead of prioritising long-term retention, there’s a growing acceptance that employees might step away from their profession for a while and then return with renewed interest and expertise. With Gen Z set to dominate the workforce, employers who adapt to their evolving needs will have an edge.
Particular recruitment challenges in regional firms can be overcome
One of the key challenges facing regional audit firms is attracting qualified auditors. Remote auditing technologies offer a viable solution, enabling auditors to work without the need to be always physically present at client or work offices. This flexibility appeals to professionals seeking a better quality of life and a lower cost of living that often accompanies regional employment.
A Broader Scope of Services will open up recruitment opportunities
A 2019 survey by Chartered Accountants Australia and New Zealand (CAANZ) of 1,000 Australians revealed a significant demand for auditors to expand their assurance scope. Over one-third of the participants want auditors to extend their focus beyond conventional financial reporting. Increasing focus on ESG (Environmental, Social, and Governance) reporting for public and larger private companies will require new skills and capabilities from our external auditors.
Technology and AI-powered data analytics are also transforming traditional audits. Internal auditors, who work within a company, can leverage data and provide valuable advice to enhance the company’s operations and strategic decision-making. In contrast, external auditors focus primarily on providing an independent assessment of financial statements to ensure accuracy and compliance with relevant standards. Both roles are essential, but the value internal auditors add through their in-depth understanding of the company’s processes cannot be overstated.
With the broadening scope of audit services, firms constantly seek professionals from diverse fields such as science, law, business, and engineering. Leading Australian firms like PwC, Deloitte, EY, and KPMG have recognised the need for varied skill sets to meet modern auditing demands. PwC Australia emphasises integrating data science and technology expertise, while Deloitte values legal and business acumen for regulatory insights. EY highlights the value of strong engineering backgrounds for operational audits. This diverse recruitment enriches audit teams and allows firms to provide more comprehensive assurance services.
Ongoing learning and development are crucial for audit firms
To address the audit skills shortage, the CAANZ report identified several critical areas for ongoing professional development:
- Audit Training
- Accounting Training
- Quality and Risk Management Training
- Digital and Analytics Training
- Identifying and Addressing Fraud
- Sustainability and Climate Reporting and Assurance
- Ethical and Professional Obligations
Professional associations must adapt to support learning in these areas. Audit firms must be seen supporting professional development activities, with study leave and some financial support essential to staff seeking to develop their skills and experience.
Industry-focused strategies and policies must evolve
Professional bodies should engage with students as early as high school to promote the benefits of a career in auditing. Highlighting the long-term financial prospects and the importance of auditors in business governance can shift perceptions and generate interest among younger students.
Universities play a crucial role in shaping the future talent pool. The CAANZ report recommends that university educators integrate more practical, real-world examples into their curricula to better prepare students for careers in auditing. Emphasising the societal impact and varied career opportunities within the profession can help attract more students.
Employers must address the working conditions and remuneration concerns that deter graduates from pursuing long-term careers in auditing. Competitive salaries, better work-life balance, and clear career progression pathways can improve retention rates among young professionals.
Expanding recruitment efforts to include a more diverse range of candidates and leveraging global talent pools can help fill the gap. Professional bodies and employers should team up to create pathways for international students and professionals to enter the Australian audit market.
Call to Fast Track Visas for Auditors and Accountants
CAANZ and CPA Australia have recently called for 11 accounting, auditing, and data-related roles to be added to the occupation’s list eligible for fast-tracked migrant visas. These roles, including external auditors, accountants, and finance managers, cannot be adequately filled by domestic candidates, international students, recent migrants, or those on skilled migration visas.
The joint submission by the professional bodies highlights that the shortfall is set to worsen due to increasing company reporting requirements and the rise in insolvencies. Notably, the shortfall is most acute for external auditors, with a reported deficit of more than 300 auditors across the six largest accounting firms (BDO, Deloitte, EY, Grant Thornton, KPMG, and PwC). Approximately 1600 external auditors at these firms are on temporary skilled visas.
What is the National Audits Group doing to address this?
The National Audit Group is tackling the challenges of attracting and retaining talent by leveraging technology, embracing work flexibility, and fostering a diverse and inclusive work environment.
By integrating advanced tools and automating routine tasks, NAG enhances efficiency and allows auditors to focus on complex, engaging work. The shift from a culture of ‘presenteeism’ to flexible remote working options helps restore work-life balance and maintain productivity and client engagement, making the profession more appealing.
Emphasising continuous learning, NAG offers extensive training in areas like digital analytics and sustainability, ensuring auditors remain up to date with industry standards and future opportunities.
To further attract talent, NAG highlights the importance of diversity and inclusion, ensuring leadership reflects the workforce’s diversity. They also focus on employee well-being and building a sense of collaboration and teamwork.
Recognising the unique expectations of Millennials and Gen Z, NAG provides varied work experiences, faster career progression, and opportunities for meaningful work aligned with social justice and environmental concerns.
These strategies make National Audits Group a forward-thinking, attractive employer
Conclusion
The auditor shortage in Australia is a multifaceted issue that requires coordinated efforts from educational institutions, professional bodies, and audit firms.
By implementing these strategies, the auditing profession can attract and retain the talent needed to meet growing demand and maintain high standards of quality and assurance.
Steve Prowse | National Audits Group
www.audits.com.au
Stephen has 20+ years’ experience working in and for local government, including audit, finance, insurance and risk management, property, and business management including a large regional airport and livestock marketing centre. He has successfully managed and delivered complex capital projects with budgets in excess of $20m, in the public sector.
