The Future of Audit: An evolving financial reporting ecosystem in Singapore

The COVID-19 pandemic has exacerbated many of the existing challenges faced by organisations and exposed them to new sources of risks. In this complex and volatile environment, the role of audit – that is, to bring integrity and trust to the financial reporting ecosystem by increasing transparency across and between stakeholders – has only grown in importance.

To examine how the audit profession should evolve to meet both current and emerging requirements within the financial reporting ecosystem, NBS and Deloitte Southeast Asia jointly conducted two sets of research in the first half of 2021:

1. A survey that sought to understand the effects of COVID-19 on the external audit process from the perspectives of audit committee members, board members, and CFOs
2. A series of three virtual focus group discussions with auditors to understand some of the opportunities and challenges that they have identified while conducting audits in the midst of the pandemic

The combined findings showed thorough perspectives relating to the external audit processes such as stakeholder expectations, audit efficiency, technology adoption, and talent and skills. More importantly the report examined how the audit profession can take steps today to ensure its relevance tomorrow, concluding that the old certainties of financial reporting are being permanently reshaped by the pandemic and its accompanying wide-ranging repercussions on risks, technology, and ways of working.

Audit committees, board members, management, finance teams, auditors, and all other stakeholders in the financial reporting ecosystem must now work together to ensure that their actions and practices are well-equipped to deal with the challenges of a world remade by COVID-19.

Faced with an uncertain future, the role of audit remains certain. Audit must preserve – if not enhance – the level of integrity and trust of tomorrow’s financial reporting ecosystem. The onus, therefore, is on all players to ensure that the evolution of the financial reporting ecosystem contributes towards driving responsible business behaviours, improving the clarity and transparency of relevant reporting, and ultimately providing stakeholders with more meaningful information to make informed decisions.

Read the full report here.