In this final excerpt from my conversation with Julia Penny, we discuss the issues of attracting and retaining accounting talent and what help firms may need to seek when designing a system of quality management. We have often discussed how an accounting firm is only as good as the people who work there. So how will developing and implementing a system of quality management impact a firm’s ability to retain and attract talent?
Firms are going to have to consider their objectives and risks areas, such as capacity challenges which we are seeing across the profession. We are facing real challenges in terms of having the right resources and the right level of expertise in terms of the retention and attraction of talent. This is going to be one of those areas that the profession needs to be developing a solution to that challenge.
The solution is not to go and hire more people because there aren’t necessarily more people to hire. Everybody in the profession is wanting to hire more people, but the opportunity to leverage technology to automate some of the routine or basic tasks not just save the time, but also creating that consistency that's needed when you're looking to create quality across the organization. Having the right technology will free capacity to be able to resolve some of the challenges around the resource issue and allow firms to have the right people with the right skills.
Firms are also looking to create improved career paths and skill development, because people aren't spending that time entering things into a spreadsheet. Technology is everywhere so for graduates coming out of university or college into an accounting firm, technology is second nature. To put in front of them paper-based or desktop-based applications and showing this is how a big firm works or a small firm works does not create that excitement and enthusiasm for them to stay longer term or to develop in role. Firms will also need to consider how to utilise those that embrace technology to lead on projects to utilise and embed technology into the firms’ culture.
As a firm chooses to implement a system properly, it's going expose some of their weaknesses and that's something we should embrace. We can then come up with a plan to address those weaknesses through technology.
There are ways to solve issues without implementing technology to solve pain points. However, adopting a technology driven approach will naturally shake up the firm's strategy in many areas. And that's going to be an opportunity for firms to embrace better ways of working.
This is going to set firms up for longer-term success. It's not just about let's check the quality box. It’s an opportunity for firms to think about where strategically they want to be in three to five years at the same time as implementing the standards.
There will need to be a cultural change. This will be a change management program that involves training. And that doesn’t necessarily mean classroom-based sessions, but training in terms of firm wide understanding what you’re trying to achieve with a quality management system. And how each role in the firm contributes to a system of quality management.
In terms of responses to risks, coming up with the responses will be quite challenging. Some firms will be used to identifying areas where things might go wrong and may require support in how to develop reasonable responses. Responses might come more naturally to those more used to writing policies and procedures. Smaller firms especially may not have this skill internally so it may be challenging to come up with responses. In this situation, smaller firms may rely on service providers and their lists of responses to find ones which best fits their circumstance.
Root Cause analysis may also be an area where support is required in terms of the tracking and monitoring pieces, such as cold file reviews or peer reviews. Smaller firms do already outsource a lot in this area and will continue to want to outsource because they won't have either the expertise or the time internally to be able to do it.
An area that would be particularly difficult is writing it down, the design, in terms of the time that it would take to work this into a format that your firm can use as a system of quality management, particularly the risks, the responses, and the objectives. Smaller firms may want to rely on a starting point from technology company or another company supplying them with a skeleton. And then they can work out how to tailor it for their circumstances. Firms across the globe are moving into the modern digital age, applying progressive technologies throughout their audit processes to drive more efficient and higher quality audits.
At Inflo, we believe the implementation of these new standards should be approached with this same mindset. With the new standards' emphasis on technological innovations taking place in the profession, firms have an opportunity to design a new kind of quality management system.
Inflo QMS is a practical solution for using technology to enable a modernized system of quality management. Available stand-alone, or as an integrated part of Inflo’s Digital Audit methodology, Inflo QMS utilizes hybrid intelligence to efficiently design and implement a comprehensive risk-based quality management system.
Taken from a Conversation with Julia Penny, JS Penny Consulting. To hear more of the conversation, watch the on-demand recording or download the free guide.