Dhe auditing industry is not only in the spotlight of accounting scandals, but is also affected by a shortage of skilled workers. This does not only concern the guild itself, but affects the entire economy. Because the audit of balance sheets is a prerequisite for investors to make money available to companies.
The shortage of auditors is primarily due to social causes, but is being exacerbated by the Wirecard law known as the FISG, which contains stricter liability rules for auditors. The Chamber of Public Accountants (WPK), which is responsible for the supervision and interests of the profession, has been warning of the negative side effects for a long time. “Unfortunately, the WPK’s warnings went unheeded,” said its President Gerhard Ziegler during the chamber’s annual press briefing on Wednesday.
A great additional task
According to the WPK, the stricter liability for violations of professional duties will lead to significantly higher premiums for the auditors’ professional liability insurance. Many will not be able to shoulder the increased risk and costs and will therefore no longer be available as audit service providers. The already small number of auditing companies that can check the balance sheets of companies of public interest will be reduced in the medium term from 60 to 50 providers due to the tightened liability rules. The WPK expects a similar reduction for the number of 3,000 auditors who deal with public interest companies.
According to the WPK, among all German companies there are around 1000 of public interest, which are referred to as PIE in technical jargon. The audit of such companies requires particularly qualified auditors and a lot of staff, because the clients are capital market-oriented and listed companies or larger banks and insurance companies that are of great importance for the entire economy.
The shortage of auditors is exacerbated by the fact that the profession will be given a major additional task with the control of green balance sheets and ESG-compatible, i.e. more sustainable, corporate management. The number of companies in Germany that are required to submit ESG reports will explode from 500 to 15,000. And EU rules require these reports to be audited by auditors, accountants or other auditing providers.
Young people are an important issue
Due to their good training and high qualifications, auditors are also suitable for many other attractive jobs outside of the auditing business. This also reduces the number of auditors. This is reported by Hellmuth Wolf, who as a personnel consultant at Signium has specialized in auditors and tax consultants. “For many employees in large companies, consulting is a more attractive career field than auditing,” says Wolf. “Many young professionals start out as examination assistants, but then switch to consulting or industrial companies,” observes the industry insider.
This is confirmed by a professional supervisor, according to whose experience the majority of auditors go into tax consulting after their exams. According to this, only 15 percent of the professionals would be auditors – and even fewer would take care of the particularly complex audit of companies in the public interest.
The next generation is an important topic for the examiners’ guild, whose average age is very high simply because a lot of experience and a long training are necessary to be able to do the job. According to WPK data, almost a third of the auditors are 60 or older. In addition, according to a conservative estimate, the number of examiners under the age of 60 could fall by 20 percent by 2036 – i.e. within 15 years. As a countermeasure, the professional exam for auditors, which is considered to be one of the hardest of all, has now been modularized. This means that candidates can now take individual parts of the exam separately instead of all at once. This reform has noticeably improved the chances of passing the exam – at least.
