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Economic outlook
During a meeting I attended a few months ago on the future of the accounting profession, one participant described auditing as a mature activity - one that is becoming increasingly unattractive from a business perspective. Almost everyone present, CAs included, agreed. I was shocked.
Many practitioners believe that the decline of auditing began with the computerization of accounting systems. Since automation allowed companies to set up their own internal control departments, they no longer wanted to pay high fees for a service they considered unnecessary. "Slash audit fees!" seems to have become the watchword.
Aware of these pressures, public accounting firms started to look at other lucrative sources of income. Statistics show, in fact, that firms have seen a steady increase in their per-client revenue, thanks to an ever-increasing demand for consulting services.
Of course, there never was a Machiavellian plot between clients and their auditors to switch the business (and the billings) into non-audit services. But the impact may well be the same. Although there may be less audit work to be...