Audits have long been the foundation of trust in financial reporting, but that foundation is now under strain.
Technology is moving faster than traditional methods can absorb, regulatory structures are struggling to balance compliance with innovation and the workforce responsible for carrying out assurance is shrinking and watching their incentive structure erode.
In the face of such changes, a new report from the Pennsylvania Institute of Certified Public Accountants argues modernization in auditing is soon to be required across the industry. For CFOs, the findings highlight what to ask of audit partners and how to prepare internally as expectations around assurance expand beyond the balance sheet and into claims about sustainability, technology’s role in the audit and impacts on corporate performance.
Trust and technology
Investor expectations are no longer limited to financial accuracy. In the PICPA survey, nearly half (49%) of auditors said financial accuracy is still the “most critical aspect” of the practice, while 40% pointed to financial transparency.
However, areas like sustainability metrics and technology capabilities are areas where CPA firms and organizations alike are overselling themselves to their potential clients and stakeholders.
The report warns that companies often exaggerate these measures to appeal to the market, creating risks for both investors and executives when the numbers do not hold up. High-profile scandals at Theranos, Nikola and Volkswagen demonstrate how misleading narratives can distort valuations and reveal the limits of audits confined to historical data.
Technology is also reshaping how audits are conducted. Artificial intelligence, blockchain and cloud platforms make it possible to test entire datasets, highlight anomalies as they emerge and deliver continuous assurance instead of a snapshot in time, the report stated. Survey results show that more than half (56%) of auditors expect technology tools to transform their work in the next five years, compared with the 43% who felt the same about the past five.
While the potential efficiency gains are significant, the report cautions that if AI tools detect problems before auditors, investors may begin to question whether traditional audits are evolving quickly enough. As Kimberly Ellison-Taylor, a technology and finance executive quoted in the report, put it: “Technology will get to trust before the profession understands technology. But we need to stay engaged so that when things go wrong, we’ll be there to save the day.”
For CFOs, the priority is ensuring audit partners adopt tools that improve accuracy and insight while preserving the independence and professional skepticism that give assurance credibility. This, among many other areas of focus around audit demand, was also part of the advice former Public Company Accounting Oversight Board Chair Erica Williams recently directed at CFOs.
Regulation and talent under pressure
The framework that governs audits is also under strain. Oversight from the PCAOB and SEC remains vital, but prescriptive standards and these inspection regimes often push firms into a compliance checklist that limits the innovation required to improve audit quality, according to the report.
Rising costs are also compounding the issue, particularly for smaller firms that are moving away from public company audits and reducing the choices available to CFOs. The report detailed that over a third (35%) of auditors said focusing more on high-risk areas would most improve quality, 31% pointed to stronger integration of technology and 15% cited better staff training. The report also points to regulatory sandboxes as one way forward, creating controlled environments where firms can test new methods and technologies with guidance from regulators before rolling them out widely.
Workforce challenges, as CFOs understand well, add another layer of difficulty. PICPA describes the shortage of skilled auditors being shaped by the demands of new technology, the complexity of standards and the limited number of professionals entering the field. Larger firms have begun embedding AI into their assurance practices, with PwC’s Deanna Byrne noting that her firm is using the technology to free auditors to focus on higher-judgment areas. Smaller firms often lack the resources to compete, losing professionals to larger rivals and widening the gap.
Retention has emerged as an even greater concern than recruitment for some firms. Jerry Maginnis, who chairs several public company audit committees, said in the report that “retention is my No. 1 talent concern, not the pipeline.” Strategies like flexible work models, structured career development and wellness programs are highlighted as essential both for keeping staff and for improving audit quality.
The implication is clear for finance chiefs. The availability, price and consistency of audits will increasingly depend on whether firms can attract and keep the people required to deliver reliable assurance. However, as these firms continue to struggle to retain their top talent and cut entry-level positions and headcount in the name of technology, finance leaders looking for a human connection may be more inclined to work with a smaller firm that can assure an experienced, hands-on audit.
Steps CFOs can take now
The report closes with recommendations that translate directly into the CFO’s agenda. When asked how technology should be integrated into audits, 44% of respondents supported full adoption of artificial intelligence, while slightly more (46%) favored a limited but important role.
CFOs and auditors alike should be expected to adopt scalable technologies that automate repetitive tasks and expand the use of analytics, but both should also invest in training programs that prepare auditors to work effectively with data-driven tools.
Finance leaders should also prepare for a shift toward real-time assurance, where audits provide continuous insights into both financial and nonfinancial risks. The report states that the future of auditing is not a continuation of the past but a reinvention of the principles of trust, transparency and accountability that markets depend on. The takeaway here for finance leaders is that the changing makeup of audit means pressing these firms, particularly the large ones, to deliver more than just a year-end opinion. They must ensure their processes, technology and goals evolve to meet the demands of investors, regulators and the business environment ahead.
The PICPA research surveyed 115 auditors across public accounting, corporate finance, government and education. The findings were published on Sept. 23, 2025.
