Must Have Audit Training Topics for 2021. Takeaways from the Webcast

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On February 9 we invited Carl Mayes to sit down with us to talk about the must have topics on the audit training calendar for 2021.  Carl is the Associate Director at the AICPA who directs the Institute’s efforts to improve audit quality.  In that role he is keenly aware of those areas where auditors are mots in need of improving their knowledge and skills.

Our audience included a mix of financial statement auditors (some of whom are still practicing) and learning and development professionals. 

Here are my four takeaways.

Misunderstandings persist about the requirements of key auditing standards

I was surprised and a little bummed to learn that many auditors do not understand the basic requirements of foundational auditing standards relating to risk assessment and internal control.  

These standards have been with us for 15 years.  The vast majority of auditors grew up with these standards from their undergraduate days through their professional career.  There is a ton of guidance out there on what the standards require and how to apply them.  Internal inspections, peer reviews, the PCAOB have hammered on these topics for years.

How is it possible that auditors and even some audit firms don’t know what these fundamental standards require?

As an L&D guy what I find even more troubling is that these topics are a staple in audit stuff core curriculum training.  Have we been teaching the wrong things?  Are we partly to blame?

I suspect the answer is yes.  So we need to step up and contribute to the solution.  From an instructional design standpoint, I think we’re only talking about base level learning objectives.

Revenue recognition isn’t over

It seems like the profession has been training on rev rec for•ever, but apparently we’re not out of the woods just yet. Turns out that many organizations struggled with implementing the new standard, and they got a few things wrong.  Auditors may not have had an ironclad grasp on the requirements of the standard themselves or how best to revenue with this new model.  

So the need for revenue recognition training remains, but—and here’s the key point—it can’t be the same training that’s been delivered in the past.  It has to be updated to narrow the scope to identified problem areas, but then go much deeper and include lots of application, analysis and the exercise of judgment in ambiguous situations.

This is a different approach than most revenue recognition modules we’ve seen delivered over the past few years

The final chapter on COVID has yet to be written

There’s a lot that falls under the COVID umbrella, for example

  • The cascading effect that the severe economic downturn had on audit client profitability, asset valuation and cash flow
  • How audit clients adjusted their business model in response to pandemic business conditions.
  • How changes to this business model affected internal control and increased the client’s vulnerability to fraud

I’ve talked to a few firms who insist that most of the COVID accounting and auditing issues relate to 2020 and audits that are being performed in 2021.  They argue that they did their COVID training last fall, and that’s all that they need because the issues won’t be around after the current busy season.

These folks are a lot smarter than I am, and they’re probably right.  But their firm may be different from yours.  My suggestion is that the technical and the learning people need to get together to decide what COVID related issues need to be updated and addressed in 2021.  In these situations I always caution people that there may be some things you thought you “covered in training,” but maybe the training wasn’t as effective as you’d hoped and a little refresher is in order.

Carl and his team have been busy

Everyone on the webcasts—audit team leaders, learning professionals the AICPA and me—we all want the same thing.  We want to better equip auditors to do their jobs at the highest possible level.  

For their part, Carl and his team at the AICPA have created A TON of helpful resources geared towards auditors and firm learning teams.  These are published and available for free at the Enhancing Audit Quality page 

Truth be told, the training slides really aren’t my cup of tea; they’re just lecture slides.  It’s the other stuff that is much more valuable.  Learning folks may not get to excited to have access to “Internal Inspections Aid; Assessing Non-Compliance with AU-C 315 and 330” but you’d be missing out.  These technical sounding documents are crucial to more thoroughly assess learner needs.  They’re solid gold when it comes to the design of case studies and real world scenarios, which is how I’ve used them.  

It may take an SME to fully appreciate everything that’s there, but learning and development teams would be wise to check these out.

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