Frederic Borràs presents the study “¿Estamos preparados para la próxima crisis?” (Are we ready for the next crisis?)
Frederic Borràs, recognized auditor and corresponding academician of the Royal European Academy of Doctors-Barcelona 1914 (RAED), presents the study “¿Estamos preparados para la próxima crisis?” (Are we ready for the next crisis?), which details the challenges of the audit and financial information and its management to prevent future crises like the one that devastated the global economy from 2008 after the bankruptcy of Lehman Brothers or the ever-recurring Crash of 1929.
“The objective of this paper is to analyse the improvements that have been made in the regulations on financial information and auditing since the crisis, as well as to indicate which projects are currently working internationally, indicating those aspects of improvement to consider having in view of the importance of having adequate financial information for what is required by good regulations. In fact, auditing standards evolve significantly when crises occur, as it happened with the one of 1929 in the United States, that originated the obligatory audit for the listed companies, as a necessary measure to be able to have a reliable financial information”, the author himself points out in the introduction to his work.
Former partner of KPGM, president of the advisory board of Morera Asesores & Auditores and member of the international management council of IECnet, Borràs reviews all the advances and the path that the audit has started learning from their mistakes to arrive at the question that gives title to their study: are we ready for the next crisis? In this sense, the academician points out that the new audit must respond to the new technological environment: cloud, artificial intelligence, robotics, Big Data, block chain… This new scenario requires a different audit, because the current regulations are based on risks and samples, although nowadays technology allows to incorporate the analysis of the information that is generated outside the company.
“An extra effort has to be made towards a predictive audit: the company asks the auditor to look further into the future and does not accept that a company with a favourable audit report collapses or has serious feasibility problems in a reasonable period of time, so that new techniques will have to be developed to advance in this way with the long lights, with procedures that can represent additional security for the users of the financial information”, concludes the author.