Keith Johnson, program director for University of Wisconsin Law School’s International Corporate Governance Initiative, discusses the crossroads that auditors are at. He suggests that to win the contest for expanded assurance assignments, audit firms might first re-visit the paradigm that underlies their service model.
Johnson says the current audit process is backward-looking and focused more on financial data or operational procedures than the human behaviors and organizational dynamics associated with items on the checklist. He proposes a medical exam paradigm might be more appropriate. By viewing goals of the audit examination more holistically, value of the service to directors, investors and other company stakeholders could be greatly enhanced.