In an interview with the Financial Times in late December, Mr Ellis highlighted that retaining qualified auditors is much more difficult if there’s a “curent of external negativity”.
PwC revealed that its attrition levels for recently qualified auditors were 8% higher than in other parts of its business this year, an increase from a 6% differential in 2020.

Just 15% of qualified auditors joining the firm in the next three months were from the UK with the rest coming from overseas, highlighting difficulty attracting candidates domestically.

Accountancy firms have come under increasing pressure to invest in initiatives to strengthen audit processes after a sting of accountancy scandals at the likes of Patisserie Valerie and Carillion. Deloitte, EY, KPMG and PwC — have been fined £42m in the past three years for audit failures.

Mr Ellis told the FT: “Audit still has a ‘halo’ for entry-level recruits as it’s seen as a trusted business training…However, its attractiveness…is damaged if the external narrative from politicians and regulators focuses on the negatives rather than its critical importance to the economy, supporting investment decisions and capital market confidence.

“At a time when investors want to assess businesses on climate and other ESG [environment, social and governance] issues, the audit profession can’t afford to lose capacity. We need more auditors, not fewer.”

Mr Ellis added that when criticising auditors, it was important to distinguish between cases “where with hindsight auditors had turned out to be wrong” and those where there had been “bad behaviour” by accounting firms.

He concluded: “At some stage, you feel there is a wall of insolvencies that is going to come. If the reaction again is ‘where were the auditors?’, it doesn’t make it any easier to tell a 23-year-old that audit is where you should want to spend the next 25 years of your career.”

Mr Ellis also welcomed the Financial Conduct Authority’s aim to become an ‘improvement regulator’, working with firms to improve their audit quality instead of criticising them for auditing errors.