Staffing for the Future
SOXRISKINTERNAL AUDITCOMPLIANCE
We are facing the truth regarding our own bad decisions about staffing and our unwillingness to change how we do things. It is time we move in a new direction.
It should come as no surprise to anyone that less and less people are graduating from college with accounting degrees. This has been widely reported and according to the CPA Journal:
“One of the more significant crises currently facing the accounting field is the large and long-term year-over-year decline in the number of college students majoring in accounting. The AICPA’s 2023 Trends Report notes that from 2021 to 2022, there was a 7.8% and 6.4% decrease in the number of bachelor’s and master’s degrees, respectively, granted in accounting. This comes after a consistent decline of 1-3% per year, which has persisted since the 2015-2016 academic year … The lack of entrants into the accounting profession comes at an inopportune time, as a large pool of accountants are concurrently retiring or leaving the workforce (L. Ellis, “Why So Many Accountants Are Quitting; Even Some Accounting Majors Don’t Want Accounting Jobs,” Wall Street Journal, 2022; J. Constantz, “There Are 340,000 Fewer Accountants, and Companies Are Paying the Price,” Bloomberg News, 2024)”
We can only imagine that the explosion of AI in the past few years will continue to accelerate this trend as less and less young people see a future in the field. The existential threat of AI to many industries is becoming very real, very quickly. Case in point: Block’s layoffs of 40% of the staff. While some people are arguing that the real reason may not be AI after all, it is safe to say that we have already turned the corner with AI to the extent that it can reduce the need for overhead across a number of areas. The fact that a company in the financial services space just laid off so many people probably means that a number of young people with accounting degrees or in college, may be rethinking their choices.
But what does this mean for the future of staffing GRC roles? Specifically, risk, audit, and SOX professionals who would otherwise be coming from accounting backgrounds? We, the editors of Internal Audit Next, believe that the future of this profession will be built on a greater understanding of nuance and, most importantly, a deep understanding of the business operations and imperatives of the companies in which they work. We are firmly planting our flag on the hill that says we should have been doing this a decade ago.
In many ways, GRC roles have not really seen dramatic shifts in the day-to-day work activities of your typical auditor, risk professional, or SOX specialist. While technology has dramatically changed industries, work habits, and work activities for millions in the past five to ten years, we didn’t see much change the GRC space. Sure, we did focus on data more, but how many teams are still using spreadsheets, testing samples (as opposed to full data sets), or simply lack a clear understanding of the business challenges being faced by the business units in the companies in which they operate? Dare we stay it, the skillset is stale and arguing over the risk and control matrix not being formatted the way you like it is really missing the bigger picture.
The fact that most audit job postings are still looking for people with accounting degrees, means that the industry hasn’t been evolving while everyone else around us has. And that’s never a good thing.
Our opinion is that audit, risk, SOX, and compliance leaders need to look at their own processes in the same way they are supposed to be looking at the rest of the business. If done properly, we believe that most leaders will draw the same conclusions we have arrived at:
Audit, risk, and SOX processes are easy to teach.
For GRC professionals to add real value, they need to have a deep understanding of the businesses for which they are providing assurance.
Value has to be the driver in every conversation. By that we mean, “What is the value we are bringing to the table?”
Staffing needs to be experienced professionals with subject matter expertise in the areas of the business that matter to our organization.
Seasoned professionals offer greater value.
Recruiting from within the ranks of your stakeholder teams and orgs will drive better outcomes
The staffing model of the GRC teams today is broken. It is time to throw out the old stone tablets that dictated the rule that good auditors come from accounting. Let’s bring in new thinking around staffing and catch up with where the rest of the world is and is heading. To do otherwise will only result in making us all candidates who are ripe for replacement by AI.
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