In the article ‘CEO Round Tables’, Chigbo provides the views of some of the top CA firm chief executives, during a round table discussion concerning IFRSs, globalization, and women in the audit profession, in December 2010. The CEOs involved in this discussion were Trent Henry of Ernst and Young, Phil Noble of Grant Thorn-ton, Chris Clark of PWC, Daryl Ritchie of Meyers Norris Penny, Keith Farlinger of BDO Canada, and Bill Thomas of KPMG (Chigbo, 2010).
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During the round table discussion, the CEOs mentioned that globalization is one of the biggest challenges facing the audit practice (Chigbo, 2010). Ritchie mention that due to globalization, many things in the business environment have changed. The needs of audit clients have changed, as well as the way they conduct business operations. However, the audit practice is still operating under a regulatory system, which was designed a long time ago (Chigbo, 2010). He therefore points the need to develop a new audit regulatory system, which would enable auditors to move forward in the currently globalized world market. According to Clark and Thomas, globalization has affected the education system, which was initially developed to train audit and accounting students (Chigbo, 2010). They state that due to globalization, there is a need revise the current education system for audit professionals, in order to attract and retain relevant professionals into the audit practice, especially the young people. This is because, young people, who are well trained in the audit practice, will be able to better handle the changing needs of businesses, handle climatic changes in the profession, and adopt more flexible and responsive methods of dealing with clients, since they are conversant with the features of globalization, as opposed to the older generation of audit professionals .
Moreover, the CEOs points that early adoption of the IFRSs by Canadian companies has both positive and negative effects. Some CEOs think that, by early adoption of IFRSs, Canada has a higher voice on the international stage, as opposed to the US, which is yet to adopt the IFRSs (Chigbo, 2010). Furthermore, they point that by adopting IFRSs, Canada has been able to align itself in the global market, hence allowing it to maintain its position in the global marketplace. However, some of the CEOs point that early adoption of IFRS by Canadian companies may be a wrong move, especially if the US eventually fails to adopt the latter, given the fact that Canada conducts a lot of trade with the US (Chigbo, 2010).
In the discussion, the CEOs seemed to agree that a North American designation in the audit profession would not be necessary. They argue that Canada, like other countries, has different business environments, different business risks, and different regulatory systems. Therefore, a North America designation would mean lose of Canadian and other countries voices in the audit profession. Nevertheless, they state that building global alliances and reciprocity among various professional bodies would assist in developing a global designation, which would allow talent migration, as opposed to a North American designation (Chigbo, 2010). Finally, the CEOs argue that, in order to increase the number of women in the audit profession, companies need to develop work/life balance programs for their female employees, adopt flexible working conditions, and address the work barriers, which prevent women from advancing in the audit career.
It is very surprising to discover that, IFRSs are not international recognized or internally implemented by all companies. From the discussion, the CEOs points that Canadian companies were the early adopters of the IFRSs. They point that, the US companies are yet to adopt the IFRSs. This is quite surprising to me since, initially, I thought by being international standards, all countries of the world, which engage in trade either internationally or regionally, ought to have adopted the IFRSs. In my own perspective, international financial reporting standards help businesses, to achieve uniformity while reporting their financial positions, even where they have operations in different countries of the world. Moreover, through IFRSs, business entities engaged in trade with various entities from various countries of the world, are able to conduct business, without violating the financial reporting requirements of other countries. Therefore, it is surprising to discover that despite the numerous trading activities, which take place between Canada and the US, the two countries operate under different financial reporting standards.
In addition, I found it interesting that despite the numerous changes that have taken place in the global market due to the effects of globalization, many companies, especially, the most prominent ones in the audit practice (KPMG, PWC, and Ernest and Young), still use the old regulatory systems. In fact, the mention of globalization being one of the biggest challenges facing the audit practice was more interesting. This is because, given the importance of external audit in business organizations, companies offering external audit services should be acquainted with the changing trends in the market. This provides clear evidence that, audit firms need to develop resourceful human resources, who would be able to meet the external audit objectives among various clients, given the changing needs of clients, and changes in the way business operations are conducted in the current globalized market. This means that, an audit professional should be well conversant with the emerging trends in the market, and should be able to work with different technological features, while conducting an audit engagement.