The Auditor of Tomorrow : the Case for New
Competencies and Broader Qualifications
Christopher LEACH
Senior Vice-President,
CTO-Technology Risk Management,
Bank One Corporation
United States
The Auditor or Tomorrow:
The Case for New Competencies &
Broader Qualifications.
By Christopher J. Leach, CPA
CTO, Bank One
Accounting
Luca Pacioli, Father of Accounting
In some ways accounting hasn't changed
much since Pacioli wrote the first
"textbook" in 1494. On the other hand,
accounting has been a leader of the
Information Revolution. Many aspects of
21st century accounting will be
unrecognizable by today's professional
leaders. Understanding the role of
financial and managerial needs today and
in the future requires an understanding of
the past.
The Auditor - A Historic Prospective
Reporting on financial results of an enterprise &
validating the results of operations
Reporting on adequacy of internal controls
Reporting on compliance to accounting standards
(GAAP, GAAS)
Reporting on compliance to 3rd party requirements
(Regulatory, contractual)
The Auditor - Yesterday’s Tools of the
Trade
Calculators
Columnar pads
Integrity
Objectivity
Independence
The Changing Environment of Today’s
Business Environment
Rapid globalization
Global competition
“Business at the speed of thought”
Emerging technologies
New threats to electronic business practices
Today’s Business Needs
Knowledge in the area of the audit (i.e.; IT, systems,
networks, etc).
Real time information & real time audits
Continual audits
Business assessments beyond simply validating the
numbers.
Identification of new areas of revenue or areas that
may present risk.
Accounting – an historical prospective
1494
Pacioli
Writes
Accounting
theory
1887
1890
1933
1934
1914
ICC
Created &
Shermant
Antitrust
Act
Audits
Required
/SEC
Created
Federal
Reserve
Created
1938
1973
1984
FASB
Created
AIA (AICPA)
Issues
1st
Standards
1996present
Assurance
Service
EITF/GASB
Created
New Attestation Services
WebTrust
SysTrust
Other reports
Today’s Challenges
New technology will not solve an old challenge:
determining which information meaningfully reflects the
true state of the enterprise's health. In the long run,
enterprises that can solve this challenge will win a
competitive advantage. Better measurement will foster
greater control and operational efficiency. In turn,
achieving these gains will increase enterprises' access to
capital.
Source: Gartner Group August 2002
Today’s Challenges

The auditing process presents one of the mostsignificant barriers to the rapid deployment of morefrequent and more-timely financial reporting. Most of
the delay in releasing annual closing numbers to the
market stems from the time needed to audit those
numbers.
Source: Gartner Group August 2002
The “New” Audit Professional Services Firm

The People
— Real time decision processes and tools
— Understanding of today’s control environments
— Ability to calculate accruals and provisions in real time
 Methodology
—
—
—
Market expertise and applicability
Global view
Operational view
Re-engineering Needed
Professional Standards changing
Global impact and regulations
Systems concepts understanding
Business risk assessments
Hardware & operating systems proficiencies
Software strengths/weaknesses
Networks/Internet capabilities and limitations
The Auditor - Today’s Tools of the Trade
Calculators
Computers
Telecommunication tools
3rd Party Data
3rd party experts
Software
Integrity
Objectivity
Independence
Today’s Challenges
Keeping up with Change
If we don’t – just ask him what may happen
The Auditor or Tomorrow:
The Case for New Competencies &
Broader Qualifications.
By Christopher J. Leach, CPA
CTO, Bank One