2025 is here, and with it will come many changes, challenges and trends for the industry. In this article, we aim to explore the five main audit trends that will be shaping audit work and their implications for auditors, their clients, and the ecosystem at large.
1. The year of AI
Kicking off with what will undoubtedly be one of the biggest trends for the year ahead: AI. For 2025, we can expect firms to increasingly implement AI tools. The Journal of Accountancy writes that AI can be used to perform journal entry testing or in the planning phase to perform risk identification. AI can automate routine tasks such as data extraction and cleansing, allowing auditors to focus on higher-value areas like risk assessment and professional judgment. This will assist auditors in providing more forward-looking insights for stakeholders, enhancing the role of auditors from retrospective analysis to a more proactive advisory and forward-looking function. According to a recent article by KPMG, three quarters of organizations polled believe it is at least moderately important that their external auditor uses AI to some extent, highlighting industry expectations and increasing the pressure on audit firms to implement concrete AI solutions for their audit work. However, the adoption of AI will also pose challenges. AI is underpinned by data, and that data needs to be complete, accurate, appropriate and gathered in compliance with laws and regulations. This is why it’s essential to have a source of data that delivers data in a standardized, easy-to-ingest format. Leveraging a solution like Verified Transactions, transactional data can be collected directly from evidence providers on the Circit platform, ready to use and in standardized format.
2. Attracting and retaining staff remains a challenge
Our first point on AI leads connects to our second trend: staff shortage. Not only will firms have to invest heavily in training staff to leverage AI effectively and adapt audit methodologies to integrate AI outputs, but this shift will also redefine the skills required in the profession, emphasizing data analytics, technology literacy, and critical thinking. AI may not only enhance audit quality, but also redefine the auditor’s role, turning the profession into a more dynamic and technology-driven discipline. This presents both a challenge and an opportunity. The audit profession has always been known as a high-pressure job, working long hours, with a questionable work-life balance. Younger generations that are joining the profession now seem less and less interested in ‘putting in the legwork required’, particularly where that means tolerating manual work or working in a low-technology environment. The traditional apprenticeship model, where junior staff learn directly from senior colleagues, has been disrupted by the shift to remote and hybrid work environments. Alternative and higher-paying industries like finance and tech are starting to look more and more like the preferred options to a young person just starting their career, or, as a recent report by KPMG and Forbes puts it: “The best and brightest are being lured away by other financial professions offering a higher salary.” A recent survey from Business Insider flagged that 64% of respondents said that improving work-life balance would improve audit quality. The same survey highlighted that around one-third of senior executives and partners feel that remote and hybrid working have a negative impact on their firm’s audit quality control. These two opinions seem to highlight the tensions between the different seniority levels and could potentially pinpoint why the solution to this challenge still has not been found. To address these challenges, some firms are exploring technological advancements to lower manual input required and make the profession more attractive to younger talent. However, balancing technological integration with the preservation of essential hands-on training and mentorship remains a complex issue.
3. Regulation
3a The US – tensions between a profession and its regulator That brings us to our third trend: changes in regulation. Industry professionals are attributing a decline in interest in the profession and the accompanying challenges in attracting and retaining staff to increased regulation. This is particularly the case in the US, where recent regulations and rules passed by the PCAOB (the Public Company Accounting Oversight Board) have been perceived as challenging for smaller and mid-tier firms, rather than enablers to a better and more fair industry. An example of this is Rule 3502, a particularly contentious piece of regulation which introduces personal liability for auditors. Many in the industry have pointed to this rule as an example of why there is decreased interest in audit and accountancy positions. Another example is PCAOB’s suggested new Firm and Engagement Metrics rule, which aims to report, among other things, on partner and management involvement, workload, training hours for audit personnel and retention of audit personnel. The aim is clear: to document the often more subtle elements that influence audit quality. Looking ahead to 2025, these developments suggest a trend toward more stringent audit regulations. Audit firms will need to adapt by enhancing their internal controls and ensuring compliance with the updated standards. The emphasis on negligence as a basis for liability indicates that auditors must exercise increased diligence in their work to avoid sanctions. This also highlights tensions between audit and accounting firms on one side and the SEC (Securities and Exchange Commission), and the PCAOB on the other side. A recent article in the Irish times says Deloitte’s letter to the SEC expressed concerns that the speed with which the PCAOB is pushing through new rules is piling new costs onto audits, while the American Institute of Certified Public Accountants warned that small and midsize firms might be tempted to stop auditing public companies altogether.
3.b UK – The establishment of ARGA and CPIA In 2024, the UK's Financial Reporting Council (FRC) implemented significant measures to enhance audit quality and market competition. The FRC's Annual Review of Audit Quality revealed that 26% of inspected audits did not meet the required standards, with 13% of FTSE 350 audits requiring improvement. Firms like BDO and Forvis Mazars were urged to make urgent improvements due to declining performance. Looking ahead to 2025, we can expect more stringent audit regulations in the UK. The anticipated establishment of the Audit, Reporting and Governance Authority (ARGA) is expected to further strengthen regulatory oversight and initiatives like the newly launched Centre for Public Interest Audit (CPIA) are designed to build confidence in audit work, with tools like the annual audit trust index providing benchmarks for progress.
4. Bank connectivity
As the need for real-time access to financial data grows, seamless integration with banks will revolutionize how auditors obtain, analyze, and verify client data. Bank connectivity allows auditors to access real-time transactional data directly from financial institutions, reducing reliance on client-provided documentation and ensuring auditors have the most up-to-date information for assessing financial health and risks. This empowers auditors to perform more robust analyses of cash flow, unusual transactions, and patterns that could indicate fraud and eliminates the potential for manipulation of bank statements or inaccuracies in client-provided information. Strengthened reliability of the audit trail enhances trust with stakeholders, including regulators and investors. As we discussed in the previous point, regulatory requirements for audits are becoming increasingly stringent. Direct connectivity with banks will help auditors meet demands for greater accuracy and compliance with standards like ISA 240 (Fraud) and ISA 330 (Audit Responses to Risks). Circit has more than 52,000 integrated evidence providers available on our platform. Connecting directly to trusted sources in a secure and regulated environment means all of the above is addressed in one single solution. Our recent partnership with Swift has unlocked even more options to benefit from this.
5. Shifting from client service to client experience
The trend of audit shifting from a traditional client service model to a client experience focus will continue to evolve over 2025. According to KPMG's Audit 2025: The Future is Now report, 62% of respondents want auditors to articulate a clear point of view on critical issues, reflecting a demand for more than just compliance; clients seek informed, actionable recommendations that guide strategic decision-making. Key trends include a desire for greater transparency (47%) in how audit opinions are formed, along with insights into areas not typically covered by audits. Clients also expect a forward-looking approach, with nearly half (47%) prioritizing risk forecasting and leveraging data analytics to uncover interdependencies (46%). Additionally, 42% seek a more holistic understanding of their organization’s current state and future prospects. This shift underscores the need for auditors to go beyond delivering standard findings, instead providing tailored insights grounded in their deep understanding of the client’s operations, controls, and industry. Putting it all together The audit profession in 2025 is undergoing significant transformation, driven by advancements in technology, evolving client expectations, and stricter regulations. AI is the newcomer with potential to reshape audits, though it may be too early to say how exactly and what this will look like in practice. Attracting and retaining talent remains a challenge as firms must balance technological integration with meaningful mentorship and improved work-life balance to appeal to new generations. Heightened regulatory scrutiny, particularly in the US and UK, is pushing firms to strengthen controls and improve audit quality but bank connectivity can be a part of the solution, contributing to increased audit quality by providing real-time access to verified financial data. Finally, clients are demanding a shift from traditional service to a more tailored experience, with auditors expected to provide actionable insights and forward-looking guidance. Together, these trends are redefining auditing as a dynamic, technology-driven, and value-focused profession.
