The values of the new breed of auditors and corporate reporters have shifted and the next generation want reforms to the sector that reflect those beliefs, according to Leonid Sokolovskyy, PhD researcher at Alliance Manchester Business School (AMBS).
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“There is definitely a shift, a generational shift,” says Sokolovskyy.
Through teaching Manchester University’s accounting and finance students, Sokolovskyy says he’s seen how the younger generation have a different perspective on issues like the future of audit.
“They want to be doing something that is beneficial to society. They want to perform a function that creates value and doesn’t destroy value.
“There’s a different set of priorities. People are more aware about the impact on the environment, they’re more aware about the importance of a healthy relationship with work, mental health and building a strong community.”
The Manchester students’ passion is reflected in their collective submission to the Financial Reporting Council’s (FRC) future of corporate reporting initiative. In it they write: “A better form of socially responsible capitalism is possible if only we have the courage to pursue it.”
They add unequivocally that “public interest matters” when doing business and warn the regulator that should they not take the lead in developing corporate governance rules that put public interest at the forefront, then the FRC itself is in danger of becoming “irrelevant and detached” from the broader needs of society.
Charlotte Edwards, a final year BSc Management student specialising in accounting and finance at AMBS and one of the authors of the submission, says it was her goal to become a FTSE 100 financial director before she started her degree. But now, having seen the many auditing scandals and glacial pace of reform, she is unsure what the future holds.
“I’m going to go into the company that I’ve joined, hopefully do my three years, come out with my qualification and see what the world is like. I don’t know whether I want to be sucked in and involved in that world, in that bureaucracy while having these ideas that maybe won’t be listened to,” she says.
What she wants as an auditor or financial director is for her work to have purpose and meaning.
“What is audit for, what is it we’re really trying to do, are we trying to make the world a better place? Are we acting in the public interest, are we supposed to be making these reports as unbiased and clear for the public as we can? I think it’s hard when there’s not always a clear pathway for those ideas to be expressed and respected.”
Ting-Chun Lin, an MSc Accounting student at AMBS, like many students did her undergraduate degree, spent a couple of years in the real world of accountancy before returning to the university for further study. She saw first-hand the disconnect between what accounting students are taught and what their work comprises of.
“I hold a high moral and ethical standard in my heart and I thought as an auditor, I was like a police officer. I thought our job is to make sure that corporates are doing their job – like a watchdog, looking over them,” she says.
Instead, she says the reality is that young auditors blindly follow the guidelines and don’t exercise professional judgement in what is essentially a tick-box procedure.
“Professional judgement is the core value of auditing. Without it, the value of the profession is diminished” she adds.
Both Lin and Edwards admit to a certain level of naivety in their expectations of work, but their career goals are reflective of a wider trend. A report by Harvard Business Review found that more than nine out of 10 employees were willing to trade a percentage of their earnings for greater meaning at work.
Sokolovskyy says the accounting profession needs to be acutely aware of this, particularly as it is the sort of career path that people “drift” into.
“It’s a very limited amount of people who will tell you, ‘Oh I’m really passionate about auditing and accounting’.
“There is a danger of accounting to some extent degenerating as a discipline,” Sokolovskyy says, if the future of corporate reporting doesn’t engage properly with stakeholders, shareholders and the public at large.