External auditing (hereafter referred to as auditing) has evolved from a routing checking of the books of accounts to a vital part of the governance processes of companies. Factors such as the volume of transactions, information technology, globalization and the constant increase in the complexity and number of laws, regulations and standards governing entities and their auditors have all impacted drastically on the evolving role of the registered auditing profession. The corporate collapses, business failures and fraudulent financial reporting scandals of the late 1009s and early 2000s led to a very turbulent time and resulted in a credibility crisis for the auditing profession. 

In South Africa, the new Auditing Profession Act was seen to give effect to Government’s intention to ensure that the auditing profession performed its monitoring function and that it could be held accountable for any future corporate bankruptcies (Laschinger, 2006: 40).

Similarly, the International Federation of Accountants (IFAC) issued new auditing standards that introduced a new risk-based audit methodology and more stringent documentation and reporting requirements. 

Across industries the following factors have been identified as compliance challenges:

• Data security – Organizations often collect and maintain personal data to deliver better services, personalized experiences, or enhanced productivity. However, data security breach can expose this data to hackers, leading to financial losses and reputational damage.
• Inadequate training – Ensuring that all employees have the required compliance training based on their job roles, remains one of the most challenging factors leading to regulatory compliance in most companies.
• Inconsistent documentation – It results in inconsistency across an organization, which can cause inconsistently performing processes and, eventually products, profitability and efficiency.
• Regulatory compliance – Compliance management systems have played a major role in the effectiveness of auditing processes across organizations. Lack of standardized processes or reliable internal controls have added some dynamics to the challenges.
• Risk assessment challenges – Recognizing the challenges auditors face in certain aspects of risk management, particularly in the context of less-complex entities.
• Applying the appropriate auditing techniques – this is paramount to the success of every company’s auditing framework.
• Keeping up with regulatory changes – Lack of awareness of regulatory changes. Regulations are evolving faster than ever and keeping up isn’t just a challenge; it’s a necessity.

Morningside Consulting and Training Group’s senior team of professionals craft customized auditing, assurance and reporting solutions across industries, including local governments (municipalities), provincial government departments, State Owned Entities (SOEs, mining companies, warehousing and logistics companies, transportation companies, financial institutions, insurance companies, gambling companies, hospitals (private and public), education institutions, Non-government organizations (NGOs and Public Benefit Organizations (PBO), political organizations, retail and consumer services companies, estate agents, construction companies, and various other industries.

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