South Africa


  • Service: Audit
  • Date: 2014/07/28

The audit model and the profession 

Financial statements no longer give insight into companies’ changing fortunes. So auditors must evolve themselves in order to remain relevant as a profession.
Jean-Paul Vellutini, Head of Audit, KPMG in France, shares his views on the current value of audit and future state of audit.
  • Has the quality of the audit improved since the 2007 financial crisis? If so, have stronger regulatory oversight and standards driven the improvement, or has the profession done so?Close Open
    One thing I say is that an audit cannot be more relevant than the information that is subject to the audit. In my view, the quality of the audit is one thing and the relevance of the information we audit is another. I think that audit quality has improved, to some extent because of stronger oversight and also because the profession has decided that quality is essential for driving our efficiency. What has not been addressed so far is the relevance of the financial information we audit. We were expecting a lot from the European Commission’s green paper, but it only challenged the independence of the auditors. In my view, the main question should have been what information independent auditors should look at.
  • Does the common compliance-based training that auditors around the world receive encourage them to take a ‘tick-the-box’ approach, rather than the more inquisitorial approach that is required? Close Open
    It’s not a question of formal training alone. It’s also on-the-job, informal training you get, spending time with people at your clients. We should not limit the training to what is provided formally. I think training has to evolve. In France we’ve done it. We’ve put more emphasis on internal control aspects and IT aspects. We believe our people need to have a much better understanding of IT and internal controls. I believe these two examples should be made a greater part of a normal auditor’s training.
  • What meaningful improvements or innovations in the audit has the profession made recently? What is the most meaningful improvement or innovation? Close Open
    If the question is in relation to the profession, I don’t see anything in terms of major improvements or innovations. Based on our skills, we can provide much more than a binary report. KPMG has some innovative vision. For example, our data and analytics initiative is critical. In my opinion we need to expand the scope of the audit.
  • Is there merit in extending the audit beyond the financial statements or even the annual report? If so, what would you suggest? Who wants this? Who will pay for it? Close Open
    Companies may be hardly willing to pay for more assurance if it is only compliance or regulatory driven. But I think investors will eventually demand they do so. The more sophisticated investors’ decision-making process is, the more they need to rely on information that’s not covered by the financial statements. If companies can only access capital or clarify their value to investors by providing this assurance, then they will do so. In addition, if we can demonstrate that bringing additional comfort on areas such as risk, internal control, contracts, etc. contributes to the company’s performance, they will seek out such assurance.


Jean-Paul is Head of Audit in France. He joined KPMG in 1985 and was elected to partnership in 1997. He has led the Industrial Products Business Unit in France and was Head of the EMA Region from 2011 to 2013. He is and has been Lead Partner on a number of French PIEs and global accounts.

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Value of Audit

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Through the Value of Audit programme, KPMG is bringing together investors, audit committee members, regulators, standards setters and management to share ideas and help build consensus around the future of audit.