Assurance delivered mostly positive results, driven by our focus to transform the audit, developing our people and embracing new technologies.
“Quality first, purpose always”
Our Assurance practice prides itself on bringing enhanced insights and value to our engagement teams and clients, while also driving consistency and quality in the execution of our work. In the coming year, we’ve set ourselves tough targets in winning new, brand-defining appointments. Our commitment to audit quality continues to underpin all that we do.
Our Transparency Report sets out how the firm is governed, details on our audit quality processes, independence and principal risks, together with the challenges we face and how we are responding to them. It also provides an update on our ongoing initiatives to improve audit quality, and how we have adapted our audits to respond to the COVID-19 pandemic.
Our commitment to quality is a foundational value of our strategy. This year, we continued to reinforce and elevate the importance of delivering quality through consistent leadership messaging and campaigns.
Our focus on quality was further reflected in our performance in 2020, with 41 audit engagements (2019: 51), representing 100% (2019: 90%) of the audit engagements reviewed being classified as compliant, or compliant with improvement required.
Our system of quality management was also subject to a full review during the year. The review was conducted by the PwC network’s global Quality Management for Service Excellence team.
Assurance Quality campaign
We launched an Assurance Quality campaign during the year to provide greater focus on the quality of our Assurance services. This ongoing campaign aims to ensure more consistent audit quality by focusing on the important cultural aspects of audit delivery, such as fostering a culture of skepticism and challenge. We are also carrying out a comprehensive review of the risk and return of our audit engagements to ensure we achieve a return that allows continual investment in, and focus on, quality.
Responding to COVID-19
The COVID-19 pandemic introduced a number of challenges to our Assurance practice. During the COVID-19 crisis, our first priority was to keep our people healthy and give them the flexibility to care for themselves and their loved ones. At the same time, we were also focused on continuing to run our business and serve our clients. Our existing tools and infrastructure allowed our people to shift to working in different ways and to coordinate and communicate with our clients.
We also increased the number of consultations required, as well as guidance issued to our teams. We actively participated in the COVID-19 task force of the audit regulator, the Independent Regulatory Board for Auditors (IRBA).
Read more about the firm’s response to COVID-19.
Some of our measures of audit quality are included in the table below.
We adopted our current strategy in response to the changing business environment and our commitment to better meet our clients’ needs. In sharpening our market focus, we have made industries the organising principle around which we offer our services to the market. This year we continued to strengthen our industry programme.
Mandatory audit firm rotation, which will come into effect in April 2023, will adversely impact our listed company audit business as companies will be compelled to award their external audit mandate to another firm. To pre-empt this, we are focusing on winning new external audit clients. In 2020, these included the Sanlam, Absa and Investec external audit mandates.
Beyond our Core Assurance offerings, we are also pursuing a strategy to build our Broader Assurance Services business. Recent successes in this area include our appointment as co-sourced internal auditors of Life Healthcare.
In the coming year, we have set ourselves tough targets in winning new external audit mandates and brand-defining co-sourced internal audit appointments.
Being commercial means growing our business and adapting our methods to be more efficient and sustainable.
For the year to 30 June 2020, our revenue reached R3.5 bn, up 10% on the previous year. We have seen growth across all areas of the business this year, including winning a number of major external audits. We’ve also seen promising growth in Risk Assurance (non-statutory assurance services over areas of risk not covered by the financial statements audit).
Our audit teams continue to enhance the quality and efficiency of our audits by using our Service Delivery Centres (SDCs) to perform standardised audit and administrative procedures. Similarly, our Centres of Excellence (COEs) apply expertise and advanced technology tools to drive quality and efficiency even further.
Streamlining, standardising, centralising and automating portions of the audit enable specialists to develop unique perspectives and bring enhanced insights and value to our engagement teams and clients, while also driving consistency and quality in the execution of our work.
In the coming year we will continue to optimise the way we work through ongoing programmes to digitise our audits, transform our processes and implement a strategic workforce plan.
We have been conducting audits since 2009 using Aura, PwC’s global audit documentation system, which is used across the entire PwC network. Aura is supported by a series of technology-based audit support tools and templates, which are accessible via a range of electronic devices ranging from PCs to smartphones. These tools increasingly integrate with Aura, populating audit evidence directly into Aura.
In addition to digitising our systems, we also continue to upskill and invest in our people. Our digital transformation journey proceeded with our team being trained in applied data analytics and robotic process automation via virtual Digital Academies. Overall, our audit professionals completed more than 41,000 hours of related training.
In the year ahead we aim to support our people’s journey to greater well-being through digital upskilling by, among other things, achieving 100% attendance of our staff at Digital Academies. We also plan to embed staff who have advanced digital skills in our engagement teams to apply digital capabilities and develop new digital solutions.
Read more about our digital transformation.
Our people are key to the performance of high-quality work and we continue to recruit and promote talented individuals across Assurance.
With the onset of the COVID-19 pandemic, ensuring the health and safety of all our people has been our top priority. With our people working from home, we have made a concerted effort to engage and interact with them positively. We have focused on communicating with our teams and our clients in new ways, which has enabled us to successfully meet their needs and align our priorities and achieve desired outcomes.
We hire candidates from diverse backgrounds who have appropriate skills; have a questioning mindset and intellectual curiosity; and who demonstrate courage and integrity. Diversity is good for our performance and creates value for our clients.
Find out more about transformation, diversity and inclusion.
Coaching and development
We continue to invest in our people by providing ongoing professional and personal development and training.
Our Assurance training programmes are designed to support our staff and partners to continuously develop the technical, digital and business skills they need to be high-performing professionals. During the year we delivered training on a range of topics, including assurance methodology, accounting, risk and quality, technology enablement, digital and business skills. COVID-19 and the resultant lockdown changed the way in which we delivered training. To supplement our extensive Global Assurance curricula, we developed more than 60 hours of local training and converted 57 hours of classroom training to a virtual classroom format. These virtual programmes have been rated highly by participants and well attended. This resulted in an increase in average training hours in Assurance of more than 30% from the prior year. Overall, Assurance staff completed 296,000 hours of training in 2020, which equated to an average of 72 hours per person.
We set aside dedicated time for coaching every day, and encourage our staff to seek coaching when they are not unsure of things. The goal is to develop their professional acumen, and avoid possible mistakes or time wasting.
In the coming year we will concentrate our efforts on retaining top talent, improving employee engagement, proactive performance management, and achieving our transformation and inclusion targets.
Among our priorities during the COVID-19 pandemic have been securing the well-being of our people, protecting the sustainability of the firm and protecting jobs. To support others, our partners and staff donated substantial amounts to feeding schemes to support communities in distress.
Assurance partners and staff donated personal time to participate in educational and mentoring programmes to support the development of underprivileged children in communities.
In the coming year Assurance will be embarking on an ambitious initiative to provide meals to schoolchildren, to contribute to their growth and development.
Quality is our number one priority and will remain so in 2021, and beyond, as we continue to maintain and improve upon the consistently high standards in our conduct, decisions and delivery.