November 17, 2022
What’s Keeping Audit Partners Up at Night?
Besides the jump in SEC enforcement activity, what is keeping audit partners up at night these days? The Center for Audit Quality (CAQ) recently released its 2022 Fall Audit Partner Pulse Survey, and the short answer is that the economic storm clouds are gathering. In the survey, audit partners are asked about “what they are observing in the industries they audit in terms of economic health indicators, challenges and risks facing businesses within their sectors, and how those businesses are adjusting their strategies in the current environment.”
With regard to the economic outlook, 57% of the partners surveyed hold a pessimistic or very pessimistic outlook on the US economy for the next twelve months, a thirteen-point increase since the spring of 2022. Most of the audit partners surveyed expect price increases and inflation to persist for the next twelve months. The audit partners surveyed categorized inflation, labor shortages, and supply chain impacts as the top three risks affecting US companies. The survey goes on to address efforts taken to mitigate risk and to address the challenges identified.
– Dave Lynn