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The next generation’s view of risk management: career or steppingstone?

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1 year ago

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A great benefit of my five-decade career in internal auditing and risk management is the opportunity to work with young people. 

Whether working alongside freshly minted graduates early in my career, working as an adjunct college professor in my mid-career, or speaking at colleges and universities today, being around young, eager minds is simply uplifting and inspiring for me.

So, it should come as no surprise that a recent visit to a major university provided fresh inspiration and insights including this one: The next generation is more likely to see accounting or internal auditing not as a career but as a steppingstone. And here’s the shocker — that may not be a dreadful thing.

One of the biggest challenges facing internal auditing and accounting is recruiting the next generation of workers to each respective profession. The growing use of advanced technology, primarily artificial intelligence, promises significant changes in how accountants and internal auditors will work in the future. To be sure, some speculate AI could soon doom both professions to irrelevance. But as I noted in a recent blog post, the changing nature of our professions may position them for success in the AI era.

This is particularly relevant to how the next generation sees our professions and the kind of work that will attract them. As the first true digital natives, Gen Z and millennials are naturally comfortable with digital tools and platforms, often mastering them with ease. What’s more, this influences how they work, learn and what they expect from their jobs.

So, what does this mean to our professions?

Deloitte’s 2025 Gen Z and Millennial Survey addresses this question nicely. The survey of more than 23,000 young people concludes they are seeking a balance of money, meaning and well-being. From the report:

“Career fluidity is a defining feature of the modern workforce: Nearly one third (31%) of Gen Zs plan to switch employers in the next two years. And while millennials may be more settled in their careers, 17% say they plan to leave their employers within two years. Their job hopping is not driven by a lack of loyalty. Many Gen Zs and millennials see it as a strategy to seek stability, better work-life balance, a greater sense of purpose, and an opportunity to learn and acquire new skills.”

This observation is backed up by longer-term data collected by the U.S. Bureau of Labor Statistics. Its Employer Tenure in 2024 report found the median number of years that wage and salary workers had been at their current jobs dropped to 3.9 years in January 2024, the lowest since 2002. The report found workers between 25 and 34 years of age had a median job tenure of 2.7 years compared to 4.6 years for those 35-44, 7 years for those 45-54, and 9.6 years for those 55-64. 

This data supports my sense that the next generation is looking for jobs that will challenge them, give them opportunities to grow their skills, and provide the work-life balance they rate so highly. These factors also support the idea that young people are leveraging jobs in internal auditing and accounting as steppingstones to opportunity, not somewhere they will stay for a lifetime.

Here’s why that’s not a bad thing. If accounting and internal auditing are viewed as the front door to other career paths, we can succeed in recruiting top talent. The challenge is to present accounting and internal auditing as attractive, even exciting, steppingstones that offer stimulating and meaningful work, the opportunity to travel, competitive wages, and what I call a crow’s nest view of the enterprise. This last aspect could be particularly alluring to younger workers if they see it as an opportunity to identify where they might go next.

Interestingly, the Deloitte survey found that the traditional ambition of “climbing the corporate ladder” is not particularly attractive to Gen Z. Indeed, the report found only 6% say their primary career goal is to reach a leadership position. However, those views could change over time, and a broad base of experience gleaned over numerous stops could be the ideal training for leadership roles within internal audit, finance or the C-suite.

I’ve had a chance to meet many people who came to internal auditing early in their careers, had a prosperous tenure there, then went into the business, who were later tapped to come back to be the chief audit executive. I’m one of them. It’s not a badge of shame to leave internal audit because that may be your best strategy for a leadership role.

From an executive management perspective, this is an ideal strategy; leverage internal auditing and accounting to lure great talent into the organization.

I have written extensively in the past decade about how growing risk velocity, an increasingly volatile risk landscape, digital disruption and a sense of permacrisis are dramatically changing risk management. How we manage these new challenges will define the future not only for accounting and internal auditing, but for business. What I’ve learned is that trying to fit this new reality into traditional approaches to business will never succeed. We must accept change and embrace chaos.

And so it is with the views of the next generation of workers. They hold the key to balancing humanity with technology. We shouldn’t get caught up in whether we will capture the best and the brightest for the next 40 years. But while we have them, we must ensure they develop the key skills that accounting and internal audit offer that AI cannot deliver: critical thinking, relationship acumen, intellectual curiosity, empathy and ethical resilience.

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Accounting

Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

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7 days ago

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September 5, 2026

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Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

Corporate accounting departments face an expanded regulatory mandate as mandatory sustainability and Environmental, Social, and Governance (ESG) reporting frameworks take full effect internationally. Governed by the European Union’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) IFRS S1 and S2 standards, enterprise financial controllers are now legally required to track, verify, and report non-financial data with the same internal controls and auditability as traditional financial statements.

The expansion shifts ESG compliance

This regulatory expansion shifts ESG compliance from marketing departments to corporate accounting offices. Financial managers are now responsible for gathering, consolidating, and verifying carbon emissions metrics, supply chain labor conditions, water usage, and climate risk exposures across multi-tiered corporate structures. These non-financial metrics must be integrated into standardized general ledgers to withstand rigorous third-party audit assurance processes.

To comply with these rigorous reporting mandates, accounting software providers have added dedicated ESG modules designed to aggregate data from IoT sensors, utility platforms, and vendor management systems. Controllers are implementing internal control frameworks—modeled after traditional COSO frameworks—to ensure the completeness, accuracy, and consistency of sustainability disclosures, protecting organizations against greenwashing penalties and litigation risks.

The transition requires significant cross-functional collaboration between accounting teams, legal counsel, and operational directors. Accounting professionals are expanding their technical expertise beyond financial ledgers to master carbon accounting methodologies, lifecycle assessment standards, and non-financial data governance protocols, fundamentally expanding the role of the modern corporate accountant.

Why This Information Matters
Mandatory ESG disclosures require companies to treat environmental and social metrics as audited financial records. Executives, accountants, and board members must institute formal tracking and assurance processes to satisfy legal mandates, maintain investor confidence, and mitigate regulatory non-compliance risks.

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Accounting

SEC’s Semiannual Reporting Proposal Faces Investor Pushback: What CFOs Need to Know

Published

2 weeks ago

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August 25, 2026

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U.S. Securities and Exchange Commission (SEC)

A proposal from the U.S. Securities and Exchange Commission to potentially shift some public companies away from quarterly financial reporting toward a semiannual model is drawing significant pushback from investors, even as it continues moving through the regulatory process. The debate has direct implications for corporate finance teams, auditors, and the broader transparency of U.S. capital markets.

What the SEC Proposed

According to a summary published by accounting advisory firm Cohen & Co., the SEC issued a proposed rule on May 19, 2026, aimed at simplifying financial reporting requirements for many U.S. public companies. The proposal would potentially reduce the frequency of certain mandatory disclosures from quarterly to semiannual, a structural change that has not been made to core U.S. reporting requirements in decades.

The proposal follows an extended debate within U.S. policy circles, with proponents arguing that reduced reporting frequency could lower compliance costs and free up management time for longer-term strategic planning rather than quarter-to-quarter results management.

Why Investors Are Pushing Back

Comment letters submitted in response to the proposal have been extensive, and according to Cohen & Co.’s review of the public record, investors “appear to be largely opposed” to the shift, viewing frequent interim reporting as a core benefit of U.S. capital markets relative to other jurisdictions.

Accounting and law firms have taken a more measured position, generally urging any changes to remain aligned with the Financial Accounting Standards Board (FASB), whose existing disclosure requirements and guidance are built around a quarterly reporting cadence. A shift to semiannual reporting without corresponding changes to FASB guidance could create friction between SEC filing requirements and GAAP-based disclosure expectations.

Lessons From the U.K. Experience

The debate is not without precedent. The United Kingdom moved away from mandatory quarterly reporting for listed companies in 2014, returning to a semiannual disclosure requirement. According to Cohen & Co.’s analysis, that experience offers a cautionary data point: there was no measurable increase in capital expenditure or R&D investment following the change, while analyst coverage of affected companies declined as reliable interim information became less available — a particular risk for smaller and newly public companies that rely on analyst coverage to maintain investor visibility.

Practical Implications for Finance Teams

Beyond the debate over disclosure philosophy, the proposal carries practical complications. Many companies have debt covenants and credit agreements structured around quarterly financial delivery; a shift to semiannual reporting could require renegotiating those terms. Reduced reporting frequency would also extend the “window of market silence” between disclosures, a factor that governance and investor-relations teams would need to manage carefully to avoid information asymmetry.

Separately, and unrelated to the reporting-frequency debate, the SEC and FASB have continued finalizing more routine updates this year. New Accounting Standards Updates are taking effect for December 31, 2026, fiscal year-ends covering income tax disclosures, credit loss measurement, induced debt conversions, and stock compensation, according to Eide Bailly’s review of 2026 ASU activity. Additional guidance on paid-in-kind dividends and environmental credits is also on the near-term horizon.

What to Watch Next

The semiannual reporting proposal remains in the comment and review phase, and no final rule has been adopted as of this writing. Finance leaders should monitor the SEC’s regulatory agenda for further movement, while treating the current quarterly reporting requirement as the operative standard until any final rule is issued and an effective date is set.

Given the extent of investor opposition documented in the comment file, a full shift to mandatory semiannual reporting appears more likely to result in either a scaled-back compromise or continued study rather than swift adoption — though the SEC’s ultimate direction remains uncertain.

 

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

Published

4 weeks ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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