16 Oct 2023

Lessons in higher learning – fostering critical thinking in the next generation

Our firm’s recent adoption of revised ISA 315, Identifying and Assessing the Risks of Material Misstatement, proved to be more challenging than we had anticipated.

Our firm’s recent adoption of revised ISA 315, Identifying and Assessing the Risks of Material Misstatement, proved to be more challenging than we had anticipated.  Our new working paper templates are in many ways superior to their predecessors, and we expected to see improvements in our risk assessments and the linkage between identified risks and planned responses.  To prepare for the adoption, we held professional development sessions to inform partners and staff of the upcoming changes, offered several in depth workshop sessions where audits teams could bring actual client files, and then followed up with written guidance on how to best complete each new form.  Looking back over the highs and lows of this transition, it appears that we should have focused more on the importance of critical thinking skills in applying all auditing standards, including ISA 315.

Across the globe, the need to advance and retain younger staff at public accounting firms has never been greater, and so we must consider the unique needs of this demographic in our training strategies.  While it's important to note that critical thinking skills can vary widely among individuals of all ages and experience levels, younger staff members often face challenges when it comes to critical thinking.

Here are some factors that may cause younger staff to face difficulties with critical thinking, and some suggestions for how these can be addressed:

  1. Limited Experience: Younger staff members may not have had the opportunity to accumulate the breadth of experiences and exposure to different situations that can enhance critical thinking. Experience often provides a valuable foundation for making informed judgments and decisions.

Addressing: Encourage and allow younger staff to seek out diverse experiences, participate in cross-functional engagements, and collaborate with colleagues with different areas of expertise. Provide mentoring and guidance from more experienced colleagues.

  1. Lack of Exposure to Complex Situations: Critical thinking often involves analyzing complex or ambiguous situations. Younger staff members who are relatively new to the profession may not have been assigned similar tasks in the past and may be unsure of how to begin.

Addressing: Whenever possible, require senior staff members to assign tasks to junior members that require analysis of complex issues, and to provide guidance and resources for completing the tasks appropriately. Ensure that senior staff assist junior staff in breaking down the task into manageable components and then provide constructive feedback on the results.

  1. Overreliance on Technology: Growing up in a digital age, younger staff members may have become accustomed to quick access to information and solutions through technology. This can lead to a preference for surface-level information and hinder deeper critical thinking.

Addressing: Encourage the use of technology as a tool to support critical thinking rather than a sole source of information. Teach junior staff to evaluate the quality and reliability of online sources and emphasize the importance of digging deeper into complex topics.  Hold them accountable for “showing their work” via references to established accounting and auditing standards.

  1. Fear of Making Mistakes: Younger staff members might be more hesitant to voice their opinions or make decisions due to a fear of making mistakes. This can hinder their willingness to engage in critical thinking.

Addressing: Foster a culture that values learning from mistakes and encourages open communication. Structure the audit planning meeting as a safe space where junior staff can share their thoughts without fear of judgment. Highlight that critical thinking involves exploring multiple options and considering potential outcomes.

  1. Need for Skill Development: Critical thinking is a skill that can be developed over time. Younger staff members may need guidance and practice to hone these skills effectively.

Addressing: Offer training programs, workshops, and/or courses that specifically focus on developing critical thinking skills. Provide opportunities for problem-solving exercises, group discussions, and analysis of firm-specific scenarios.

  1. Limited Exposure to Diverse Perspectives: Younger staff members might not have interacted with a wide range of individuals with differing viewpoints, which can impact their ability to consider various angles in critical thinking. 

Addressing: Encourage collaboration and interaction with colleagues from diverse backgrounds, both within and outside the firm as this exposure can broaden staff perspectives and enhance their critical thinking abilities.  Look for opportunities to have junior staff interact with clients, bankers, and other users of audited financial statements.

By recognizing the challenges that younger staff may face in developing their critical thinking abilities, and implementing strategies to address these challenges, our firms can cultivate a workforce that excels in critical thinking regardless of age or experience level.

-Phoebe Elliot, Director of Standards
KRP LLP Edmonton, Alberta, Canada