The Ledger

From McCombs TODAY

Robert Kueppers, deputy CEO of Deloitte LLP, talked about the future of auditing at the Sept. 16 meeting of the MPA Distinguished Speaker Lyceum.

In a speech titled “Accounting and Auditing: Implications of the Current Environment,” Kueppers told students “You’ll never learn anything from an audit that goes perfectly.” He added that he’s seen his fair share of imperfect audits, having worked with Enron, WorldCom and Fannie Mae, among others.

Kueppers highlighted what he sees as the three big issues facing public company auditing:

• The significance of professional judgment and professional skepticism.
• The effectiveness of the financial reporting model and the value of the audit.
• The inevitability of continued globalization.

According to Kueppers, auditors have to make professional decisions every day just in determining what to look at and how much time to spend on it, and they always have to keep their eye out for red flags.

“Professional skepticism is the essence of good auditing,” said Kueppers. ”It’s not about keeping the client happy. It’s about making sure you’re doing your job.”

Kueppers also said that the value of auditing will be questioned over time as it has been in the past, but that the need for professional auditing will never go away.

And as for globalization, he predicts that implementation of the International Financial Reporting Standards (IFRS) is inevitable in the United States. He cites the fact that auditors in the U.S. already have to abide by IFRS if they are auditing the U.S. branch of companies that are based out of foreign countries such as Japan, Mexico or Canada.

However, he stressed to students not to worry about their education in non-IFRS auditing. “Everything you’re learning now is all transferable,” said Kueppers. “The fundamentals aren’t going to change. But at some point within the first five years of your work life…IFRS will be introduced, and at that time you’ll get what you need.”