Last week in Las Vegas, top auditors met to talk about the busy audit season and future plans. The BDO Alliance Conference in May 2024 was a big event where many important topics in the audit industry were discussed. Here’s a look at what was talked about.
Auditors are in high demand and there aren’t enough of them. Every audit firm I spoke to was fully booked in early 2024. For the first time, auditors can charge more for their services. Many firms have raised their prices by 10-15%, and some even up to 50% in certain industries. Surprisingly, clients are accepting these higher prices with little complaint. This means there might be room to increase rates even more in 2024.
Firms are also getting new clients mostly from referrals and incoming calls. No one is actively seeking new clients because they don’t have the capacity to handle them. There is a big opportunity for firms to use new technology to free up time so they can continue to grow with new clients. I predict early adopters of technology will be able to grow their practice 50% faster than traditional firms.
AI is a big topic at every conference, but no one is really using it in their firms yet. The common advice is to “wait and see.” AI has some flaws and only gets things right about 95% of the time, which isn’t good enough for audits. Imagine if a new associate only checked 95% of their samples and guessed for the rest. That’s why AI isn’t fully trusted in auditing yet.
At Audit Sight, we use technology differently. We use a rules-based system to do specific tasks accurately. We do use some AI, but we always have a CPA check the results to make sure they are 100% correct.
A big topic at the conference was the new presence of Private Equity (PE). Over 75% of CPA firms at the conference have been approached by PE firms. Some have even taken the investment, which has helped them grow and invest in new technology. However, there are questions about what will happen when these investments need to show returns. How will firms handle costs if they don’t meet their earnings goals?
One major topic was the new AICPA Quality Management Standards (QMS). Many firms are not ready for these new rules, which could reveal weaknesses in their quality control. Only a few auditors said their firms have started preparing for these standards. Those who have started reported problems with their internal controls, meaning they need to improve their processes. This summer, it’s important for firms to identify someone to lead this initiative and start preparing before the next busy season.
At the conference, we heard lots of ideas about making things better, even though there are many challenges. The future isn't just about one big change but many smaller ones that come together. Audit Sight is leading this exciting journey. We are a company created by auditors who work hard to make things easy and efficient for everyone involved, including auditors and transaction advisory groups. We believe in using new ideas to improve how we do things. This conference showed us that we are on the right path and gave us a clear picture of where we are headed in the audit industry, aiming for more truth and trust.
Reflecting on the conference, we don’t just see changes; we see a transformation that goes beyond current audit standards. With the insights from the BDO Alliance Conference 2024, we are ready to face challenges and push the audit industry forward with technology and human creativity, aiming to build the audit of the future.
