Washington DC, October 30, 2024 – Going into 2025, a potential recession, ongoing inflation, and geopolitical instability are just some of the top concerns of audit partners and the companies they audit, according to the Center for Audit Quality’s (CAQ) most recent Audit Partner Pulse survey. The Audit Partner survey provides independent and objective perspectives on a range of topics, including economic risks and business transformation.
“Public company auditors are in every public company, of every size, in every industry, in the U.S.,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “This breadth and depth provides public company audit partners with unique insights into how America’s businesses operate.”
Below are key findings from their observations.
Partners Neutral on the Economy Despite Perceived Risks
- A potential recession is the largest economic risk factor audit partners foresee over the next 12 months, followed by regulations and geopolitical instability.
- Despite the risks, audit partners’ outlook for the U.S. economy over the next 12 months is trending neutral.
- Auditors are less positive about inflation, with the majority believing it will continue to impact businesses in their primary industry sector for the next six to 12 months.
Businesses are Concerned for the U.S. Election
- According to the audit partners, most businesses are concerned about the potential impact of the U.S. election on their financial performance over the next 12 months (65%).
- Despite this, most public companies are not adjusting their business strategies and do not foresee direct disruptions to their business are a result of the election.
Labor Strategies Signal Mixed News for Workers
- Audit partners report a significant shift in labor priorities, with labor shortages dropping down considerably among their list of economic risks.
- According to the audit partners, upskilling employees is the top human capital action they are observing among companies in their industry sectors (66%).
- However, this is closely followed by reducing headcount (59%) and decreasing workplace flexibility (51%).
Technology Shifts in AI and Cryptocurrency:
- The shift in labor strategies may be influenced by public companies’ use of technology. According to the audit partners, process automation (62%), customer service (52%) and predictive analysis (34%) are all areas they see companies increasing their utilization of artificial intelligence (AI).
- While the audit partners reported an increase in the use of AI, organizations appear to be losing interest in cryptocurrency, with most (83%) reporting that organizations in their industry sector have no exposure to it.
Download the report, Fall 2024 CAQ Audit Partner Survey, to access the full survey results.
About the Center for Audit Quality
The CAQ champions the public interest in the capital markets by:
- Elevating the quality, credibility, and transparency of public company audits;
- Advancing critical issues affecting public company audits;
- Driving innovation in assurance; and
- Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.
- As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.
Contact:
Brad Jacklin
Director of Communications
Bjacklin@thecaq.org
(202) 494-9560