A new biannual survey shows some perceptions of the economy are improving.
The Center for Audit Quality’s fall 2022 Audit Partner Pulse Survey found almost 60% of audit partners expressed pessimism for the U.S. economy. However, the group’s more recent fall 2023 survey showed overall pessimism dropped to 27%.
Julie Bell Lindsay, CEO of the center, explained audit partners are present in all public companies in the country. They are responsible for understanding risks and pressures affecting businesses and the industries they operate in.
“Certainly the economic outlook is stronger than a year ago,” Lindsay noted. “But auditors still see the potential for inflation, while it is falling, to have a significant impact on business operations over the course of the next year.”
Lindsay added almost 70% of auditors see what she calls “inflationary effects” hitting business for longer than 12 months. She asserted businesses are being heavily affected by the country’s current regulatory environment, with a majority saying the effects have been negative, citing additional costs associated with compliance with new rules.
Lindsay acknowledged despite the various challenges plaguing the business community from cybersecurity to learning how to better handle artificial intelligence, the country finds itself in what she terms a “relatively strong position.”
“The U.S. continues to have, I would say, the most liquid and strong capital markets in the world,” Lindsay contended. “We are not without our challenges, but we seem to be coming out of the pandemic and an inflationary cycle in a fairly strong position.”
According to the survey, companies’ top three priorities are cost management, financial performance and overall growth. Lindsay noted while artificial intelligence was lower on the list of companies’ priorities, it is high on their list of challenges because of data quality concerns and data security risks.
Lindsay added companies across the country are also experiencing a shortage of accounting and auditing professionals.
“It is not just getting talent into the companies,” Lindsay stressed. “When you have less talent, that means the existing talent has to take on additional responsibilities and that can hurt retention.”
While half of companies are focused on upskilling, the survey found one in three is working to increase compensation and workplace flexibility for current employees.
