On Dec. 9, 2024, the Public Company Accounting Oversight Board (PCAOB) released a report highlighting intergenerational tensions in the workplace culture of the U.S.’s largest audit firms, including Deloitte, EY, PwC, KPMG, Grant Thornton and BDO. Based on anonymous interviews with senior executives and partners, the report revealed growing concerns about the erosion of the traditional "apprenticeship model," where entry-level employees learn directly from seasoned professionals.

Financial Times reported that the shift to remote and hybrid work has disrupted this long-standing dynamic, creating significant challenges for training and mentorship. Executives noted that managers and partners are increasingly stepping into roles traditionally filled by junior staff, leaving key tasks without the critical “second pair of eyes” necessary to ensure accuracy. These changes have raised alarms about the ability of firms to maintain audit quality, a cornerstone of financial integrity.

The PCAOB emphasized the connection between workplace culture and audit quality, stating that firm leaders must set the tone to ensure independence, integrity and professional skepticism.  However, generational differences in career expectations have made fostering such a culture more difficult. For instance, Gen Z workers approach work differently than their predecessors, often viewing jobs as temporary opportunities rather than lifelong careers. This shift in mindset has made it harder for firms to retain talent and build cohesive cultures.

The report noted that firms with the highest audit deficiency rates often have the greatest proportion of senior managers and partners hired from other organizations rather than developed internally. Retaining talent over the long term appears to offer an advantage in maintaining high standards, but achieving this in an industry known for demanding hours and high stress is no easy task.

Efforts to improve work-life balance have been met with mixed reactions. While younger employees value these initiatives, more than one-third of the partners interviewed believe such changes have lowered productivity and delayed professional development. The annual busy season remains particularly challenging, with grueling hours continuing to deter new talent from entering the profession.

In response to persistent quality issues, some firms have focused on centralizing and standardizing audit procedures. While this approach streamlines processes, it risks reducing the work to a box-ticking exercise, eroding opportunities for professional judgment and making the profession less appealing to Gen Z. Similarly, the offshoring of routine tasks to countries like India has further diluted the apprenticeship model, depriving new recruits of opportunities to develop foundational skills and business knowledge, the Financial Times reported.

Amid these challenges, some firms are reimagining the audit profession from the ground up. By integrating real-time data analysis and AI-driven tools, firms aim to shift focus from routine tasks to more complex, judgment-based work. These innovations could make auditing more intellectually stimulating, aligning with Gen Z’s desire for meaningful and impactful careers.