More than half of all audit partners polled by the Center for Audit Quality (CAQ) in its semi-annual Audit Partner Pulse Survey were more pessimistic about the economy than they were in the spring. As a result, they cited cost management and talent retention as top priorities.

The survey was completed in October, and the CAQ said that it"observed notable shifts in audit partners’ perspectives that suggest U.S. businesses are responding to inflation and a possible recession by scaling back on certain growth strategies while increasing focus on cost savings, liquidity, and improving productivity."

Fifty-seven percent of the 648 respondents held a pessimistic or very pessimistic outlook on the U.S. economy for the next 12 months, representing an increase of 13 points since the previous survey, conducted in May. Seventy-three percent expected price increases to persist, and 68 percent expected inflation to persist for the next year. On the other hand, while only 28 percent expected inflation to last just six to 12 months, that's more than the 22 percent who expected it to last that long in the spring.

When asked to select up to three of the largest risks facing companies in their primary industry sector over the next 12 months, 75 percent of the auditors cited inflation, followed by labor shortages (48 percent) and supply chain issues (44 percent). About 32 percent mentioned cybersecurity  and 31 percent said regulation.

When asked to select up to three top priorities for companies in their industry sector over the next six months, 53 percent of respondents said cost management, edging out talent and labor at 47 percent and financial performance at 42 percent.

The survey also found that respondents are preparing for emerging issues, such as climate change (59 percent) and emerging technologies, including blockchain (63 percent).

To cope with changes wrought by labor shortages, 66 percent responded that they would increase flexibility in the workplace. Sixty-two percent said that they would increase compensation. And 32 percent they were "upskilling" their employees.