Audit holds a special place in the hearts and minds of accountants. It is what gets them into trouble in the eyes of the public - whenever there is a corporate collapse, such as Bank of Credit and Commerce International or Polly Peck, the cry of "Where were the auditors?" is heard all around. And it is increasingly seen as a commodity product with which many in the large firms would, it appears, really rather not be bothered.
Nevertheless, it is put up with because - whatever the managements of accountancy firms say about independence of services - doing an audit is a jolly good way to get to know a client and get into a position to sell tax advice, management consultancy and all the rest.
Consequently, accountants are trying to make the most of this situation by "rebadging" audit as business assurance. Risk and its assessment are, after all, trendy at the moment.
The contribution of Arthur Andersen to this development is an audit that uses the firm's extensive computerised knowledge base to help companies identify and analyse all the risks facing their businesses. The idea, it says, is to enable its staff to carry out "a more focused and prioritised financial audit".
Though David Whitmore, managing partner of the UK assurance and business advisory practice, and his colleagues are at pains to emphasise that the development does not enable auditors to detect fraud, they do suggest it will make auditors more aware of the problems that tend to afflict certain sectors. As with any other firm, its people have sometimes found themselves caught on the hop.
Many firms talk about their expertise in knowledge management these days - the need to invest more in developing such networks is given as a prime reason for merging by KPMG and Ernst & Young. But it is a fair bet that few have done as much in this area as Andersen. Having set out its stall - at least until the long-simmering dispute with Andersen Consulting came to a head before Christmas - on providing a truly integrated service, the firm has made great use of information technology to link its tens of thousands of employees around the world. Increasingly, it has sought to draw together everything they know into a database divided into industry sectors.
The Business Audit, which has taken three years to develop, is essentially a development of that process. At the press of a button, an individual called in to audit a company in a particular industry can call on what his or her colleagues around the world know about both the company and its industry.
Nor is such information useful just for the Andersen employee. It also enables him or her to, on single piece of paper, show the company's directors the key influences on their business. In particular, it can highlight risks that may not be crucial at the time but which may threaten the business's long-term viability.
Though it is the firm's hefty investment in technology that enables this instant picture to be procured, Michael-John Saunders, the partner in charge of implementing the approach in the UK, insists that the firm is not promoting the Business Audit on this basis. It is just a tool that enables the firm to provide clients with better advice, he says.
Mr Whitmore agrees. Pointing out that the advance is evolution rather than a revolution, he says it merely carries on a long-standing Andersen tradition of "auditing the business and not just the financial statements".
But an indication of the seriousness with which the firm is treating the development, which has been introduced to leading clients, is that more than two million hours have gone into training the firm's 25,000 auditors around the world.Reuse content