We live in strange times. I reminded of this watching an interview of Barack Obama by David Olusoga the other day. Obama talked about the concept of “truth decay” — a phrase which both fascinates and appals me. There are many definitions out there. In summary, it is about the diminishing role that facts and figures play in public life.
And it rings true. We live in a world where public and private figures are trolled, cancelled and doxxed on twitter. Scientists’ patience is being tested to destruction by the persistence of flat earthers. And someone has written sarcastic anti-vaccine graffiti on the vaccination centre in Cardiff. Hmm. It is too close to home.
The audit profession needs to be aware of the challenges presented by truth decay. Audits are there to provide third party assurance to the appropriate stakeholders. Therefore, a breakdown in trust in objective facts will have a significant impact on the profession. The service and assurance audit provides is needed now more than ever.
Who those stakeholders are is an interesting question. Some stakeholders are also corporate bodies (banks, regulators for example). The audit profession is reasonably well-placed to combat the effects of truth decay in such bodies. Communication is key to that process.
Those corporate bodies, are (at least in Britain) still vested in the status quo. Auditors need to continue their work in being present within those organisations. They should take every possible opportunity to be as transparent in their work and deliver insights.
Wider stakeholders such as customers, service users and the general public are also important to consider. More concerning is the impact of truth decay on them. They do not have the same direct relationship to audit and are less involved in the process. The audit profession may need to invest more time in engaging with these groups too in the future. It will need to explain more of what it does and how it has worked with individual organisations to the public.
Auditors could also encourage their clients to share their wider assurance frameworks. This could be useful in building trust. Audit will be of vital importance in gaining assurance, naturally. But sharing the wider system of checks and balances will be helpful in building trust.
Audit cannot be the absolute guarantee against organisational failure of course. Those charged with governance, regulators, advisors, lenders and others will also bear responsibility. The need to tell this story has been long recognised by the profession. But the auditors will need to bear in mind the bigger picture. The world in which they are telling that story is being warped and altered quite significantly by truth decay.