Public policy: shaping the future of our industry

It is an exciting and decisive time for the audit profession: market expectations are shifting, regulatory requirements are expanding, technology is transforming the way audits are performed, and sustainability has become an imperative for companies as well as individuals. All these evolutions reshaping the audit industry, in which Forvis Mazars is playing its full part, are critical to building and maintaining trust and confidence between businesses and the public.

The expanding scope of an auditor’s work

The core mission of auditors is expanding into several fields beyond traditional accounting skills. As companies are increasingly required to account for their performance in new strategic areas such as ESG (environmental, social and governance) and information technology, auditors face growing demands to provide assurance in these areas. This means Forvis Mazars has a critical role to play in helping shape pioneering approaches, frameworks and benchmarks regarding how corporate performance is accounted for and assessedin these fast-evolving areas.

On both the ESG and the digital front, the European Union, which is at the forefront of the regulatory dynamic, has already introduced mandatory audits through the introduction of groundbreaking legislations such as the Corporate Sustainability Reporting Directive (CSRD), the Digital Services Act (DSA) or the Digital Markets Act (DMA), with regulators around the world also moving in this space.

These regulations aim to impose a full set of obligations on different industry actors – from large online platforms and search engines, financial services firms, to corporates and AI pioneers – in order to eliminate greenwashing, empower users online, enhance cyber security, and protect data privacy.

How we engage in the public debate

The increasing demands on auditors in different fields come on top of a wide range of challenges, including questions regarding audit quality arising from significant corporate failures, which have had a substantial impact on the economy, financial stability, retail shareholders and trust in the profession. At the same time, the decreasing number of auditors and audit firms able to address new expectations feeds the risk for entities to become audit orphans (unable to find an auditor), at the very moment when they expect more support from auditors.

Therefore, conversations regarding reform of the audit market are taking place in multiple jurisdictions and forums around the globe, seeking to find solutions to the common challenges faced by the profession. At Forvis Mazars, we take part in these debates by sharing our views and responding to public consultations at national, regional and global levels.

We contribute to the discussion on the future of audit and the need to adapt audit regulations, standards and frameworks to the new context. We share our expertise, experience and feedback on the most efficient levers to improve audit quality and build confidence by engaging with key stakeholders and regulators through our involvement in professional organisations, key working groups and institutions around the world, which include:

• Board membership of IFAC and IAASB, the international audit standard-setters.
• Membership to the Forum of Firms, an association of international networks of accounting firms that perform transnational audits.
• Board membership and chairing working groups at Accountancy Europe and the European Group of International Accountancy Networks and Associations (EGIAN), professional organisations that represent auditor associations and accountants across Europe.
• Participation in various key working groups of national audit institutes around the world.
• Membership on expert teams, such as the European Financial Reporting Advisory Group (EFRAG) and the UN Human Rights Council.
• Partnerships with key public and private stakeholders such as the UN Global Compact, the OECD FAST-INFRA (Finance to Accelerate the Sustainable Transition Infrastructure), EUROFI (the European think tank dedicated to financial services) or ICGN (the International Corporate Governance Network), for instance.   

What we stand for

Our aim is to encourage fruitful exchange of views on new audit challenges, support the development of solid audit standards and guidelines worldwide, and create a vibrant and attractive audit ecosystem. Ultimately, we believe that the increasing demand for audit is a positive recognition of the added value of auditors’ work and methodologies in addressing societal challenges such as ESG and AI. This is why our recommendations to policy makers are centered around building trust and quality in the audit market, and ensuring auditor independence is the cornerstone of the evolving audit system.

Our key recommendations include:

1.  Incentivising the opening of the PIE audit market to additional audit players in order to build trust and enhance audit quality, and properly address new demands and expectations.
2. Ensuring companies have a real choice when selecting their auditors, thereby protecting them from the inherent risks of a concentrated market.
3. Making sure the biggest entities benefit from the ‘four eyes’ principle and cross-reviews, which are key features of joint audits.
4.  Allowing auditors to benefit from the widest skills and securing the multidisciplinary model within existing safeguards.
5. Mandating a level playing field for sustainability reporting by implementing reliable, consistent and comparable sustainability standards such as the ESRS in EU Member States, and the International Financial Reporting Standards Sustainability Disclosure Standards in other jurisdictions.

Our contributions to these debates are public and available on our website as well as on the websites of the institutions leading these consultations.

Read our contributions to public consultations