Why everyone should care about financial reporting

Many people work hard to save and invest their money to buy a home, pay for education, fund their retirement, or do things like go on vacation. These milestones, while unique to each person, are important and special in people’s lives and a lot of blood, sweat and tears goes into achieving these moments for ourselves and our families. 

One of the reasons I’m so proud to be an auditor is that I know how the work we do plays a role in how people achieve these important things in life. The strength of our US capital markets is a tremendous asset and factor in how people can achieve these milestones - and according to the Center for Audit Quality, 74% of investors have confidence in US capital markets. The financial reporting ecosystem that aids in maintaining that confidence - which in turn helps businesses in growing and raising capital. 

While auditors are an important part of this ecosystem, we are not the sole actor working to build and keep confidence in it. Much like a sports team, there are a lot of participants with unique roles involved. Together, each player has a role in the financial reporting system so that our capital markets continue to flourish for the benefit of everyone. 

It takes a village

In sports, it takes teamwork among various roles to play a game. Each player contributes to the success of the team by performing their specific job. The same goes for financial reporting - When everyone plays their role, we all play successfully- and success means quality, reliable financial reporting that can help build trust in the capital markets. Here’s a quick rundown of the key roles:

• Boards & audit committees oversee a company’s financial reporting and operations as well as internal and external auditors
• Management prepares a company’s financial statements and runs internals controls over financial reporting
• Independent auditors provide opinion regarding a company’s financial statements and in some cases the company’s internal control over financial reporting
• Standard setters/regulators develop accounting/auditing standards and enforce them
• Financial statement users consume the information

I’m proud to say that our US capital markets are among the best in the world, and that is enhanced by the participation of all the roles involved. 

Unprecedented technological change

From my point of view, it’s a great time for financial reporting, and to be an auditor, because advances in digital technology are making all of the players stronger. 

Those of us that are a part of the financial reporting ecosystem are working to improve our systems and, at the same time, be more nimble, efficient and insightful, and to leverage the more ‘decision-useful’ information that companies can provide us to reimagine what’s possible for our profession.

We’re embracing this change at PwC through our Digital Workforce Transformation program, which invites all employees across PwC US to increase their technology skills. We are redefining how we do what we do and finding innovative, tech-driven ways to train our people, serve our clients, and contribute to our communities. 

For our audit professionals, this means that we’re doing things like shifting manual tasks to machines, implementing bots to help streamline processes, and making many tasks more seamless overall. We are enabling our auditors to spend more time on what’s core to their job and what they do best -- analysis. By allowing them to evaluate a broader expanse of information more quickly to glean deeper insights, our goal is to deliver quality audits to support the financial reporting ecosystem and ultimately, our capital markets. 

We’re also working on the audit of tomorrow. PwC is laser-focused on tech-enabling the audit, matching emerging technologies with the skills of our people to dramatically shift how we work. We are leveraging these tools to improve quality, increase consistency, enhance real-time information exchange and create superior document management capabilities. We believe that this eventually will transform virtually all facets of the audit, support standards testing, provide risk assessments and insights, enhance collaboration between our teams and clients, support audit execution, and more.

Why does this all matter? 

Simply put, all this matters because solid financial reporting plays an important role in building even stronger capital markets, which in turn increases market confidence, which helps everyone - individual and institutional investors, entrepreneurs, small businesses, large corporations, and workers – maintain or improve their way of life. Because of these stakes, it is now more important than ever for the leaders of our profession to enhance our capabilities, invest in and train our people with tools and technology to let them focus on what’s important, and work with the other players that have roles in maintaining a robust financial reporting ecosystem. We take our role very seriously and are proud to be a part of this powerful team!