Vin Colman is PricewaterhouseCoopers’ U.S. Assurance Leader and a member of PwC’s U.S. Leadership Team. He began running the firm’s Assurance practice, which includes audit and other services, last July when the firm reorganized its management ranks (see PwC U.S. Reshuffles Leadership Leadership Team).
Colman has more than three decades of experience at the firm, most recently as PwC’s East Region Vice Chairman. Now he has plans to take the firm’s Assurance practice in new directions as PwC addresses emerging client needs in areas such as sustainability, cybersecurity, corporate governance and technology risk.
Could you describe how you started your career at PwC?
Sure, I started here in September of 1982, so I’ve been here for over 30 years and rose through the ranks. I went to St. John’s, graduated and started with the firm. I had a lot of different responsibilities over my career. In my younger years I worked in publishing, technology, government contracting and insurance. I had a client that was registered in the United States, but their operations were in Israel, so I commuted back and forth to Israel in the early ’90s.
In the late ’90s and early 2000s, I started getting leadership positions in the firm, starting in the ’97 timeframe, when I was in charge of our computer audit practice. Then I expanded into some of our broader risk assurance types of practices in those early days. I then was the operations leader for our advisory practice, when we formed our advisory practice after the sale of our MCS [Management Consulting Services; PwC Consulting was sold to IBM in 2002].
Then in 2005, I was asked by the leadership of the firm to be our National Office leader, so I led our National Office for four years. The National Office involves our activities that service our assurance partners with respect to the accounting, auditing and risk management positions of the firm. I was the firm’s liaison to the SEC, PCAOB and FASB. I served on the Standing Advisory Group at the PCAOB, and I served a couple of terms on FASAC [Financial Accounting Standards Advisory Council] at the FASB.
So you’ve been involved with the standard-setting process and were able to see that up close?
That’s correct. I was involved in giving input on the standard-setting. For instance, part of the National Office[’s tasks] would be [providing] our firm’s positions on some of the future standard-setting. All those communications that go out to our clients would be part of our National Office process that I led. Then I was the National Office leader during the financial crisis, so I spent some time dealing with certain of those issues during the crisis, particularly with some of the major banks, [financial] institutions and insurance companies. Then I was asked by the leadership of the firm to become the leader of the Assurance practice.
What is the Assurance practice involved in doing at PwC?
Audit is the bedrock of what we do from an assurance standpoint for financial reporting, financial statements and those sorts of things. Then we have broad assurance-type services for technology risk, conflict minerals, cybersecurity, governance and compliance. We have various assurance-type services and third-party assurance services. If you have a shared service center, what is the efficacy of the information that comes out of it? There are other types of assurance services for the market beyond our pure audit-type services, to give assurance for users of information.
Would cybersecurity involve areas like the data breaches that we’ve been hearing about in the news lately?
Cybersecurity is an issue that needs to be dealt with. We would be more on the risk assurance side of it. A number of us deal with that issue, with different types of services and skill sets. The cloud would be another example. As companies are moving to the cloud, how do you have assurance with respect to security around the cloud? Those would be the types of skill sets and services that we would offer. Sustainability would be another one. Sustainability is a significant issue over in Europe, and it’s becoming a bigger issue here in the United States. And we are coming up with skill sets and service offerings to deal with that.
Are you starting to gear up for the new integrated reporting framework?
We have a group of people who are working with the new standard setting that’s being proposed around sustainability by the SASB [Sustainability Accounting Standards Board]. It will be a big focus area for us as we move forward. There are a lot of things that are changing in this world, and we have teams working on each of these changes that are demanding broader assurance-type services beyond the audit.
You mentioned conflict minerals and they just came out with some rulemaking in the SEC about that.
That’s another example. Companies need to have at least an understanding of it by the spring of 2014, with other requirements beyond that. We have a team leading that effort.
What’s involved with leading a team that’s involved with so many different areas on which you’re providing assurance?
When you’re going through the type of change that we’re going through, strong leadership is immensely important. I think people would describe me as somebody who is very motivating and collaborative. I like to listen to other people’s point of view. Yet I do believe I’m high energy, and I try to drive things forward because we are in a fast-paced changing environment. Trying to motivate a large organization to address the changing environment is enjoyable. If you want to collaborate, you need to get the input of other people, listen, be decisive and move forward.
What kind of plans do you have for the Assurance practice? Do you foresee expanding some of these practice areas like sustainability and cybersecurity, and are there other areas where you see client demand?
When you talk about our Assurance practice, we should step back and start with our core audit business. It’s still by far our largest business. My objective is to continue to drive high quality. That is clearly the bedrock of our practice and the services that support our brand. That said, our audit business is an element of our broader assurance business.
There are tremendous opportunities in this changing world with respect to broader assurance. People are certainly expanding internal audit services and third-party assurance services. We talked about sustainability and security, and those changes around broader technology and technology risk, and addressing the assurance around technology risk. For many of these events happening today, we have service teams addressing them.
There is right now a tremendous need to assist with respect to regulatory risk and how you address regulatory risk. For how you address compliance risk, we are building out broader teams to address those services that are really aligned with assurance and with our core auditing skills and an extension of those skills.
We have two other major activities going on. One would be trying to communicate better with [board] directors and audit committees. We have a Center for Board Governance. The objective is to communicate and assist directors and committees of the board, with a focus on audit committees, to educate them on what changes are going on with respect to current issues, and give them a forum to communicate and collaborate with each other so they can be more effective. We give them the current best practices.
Similarly we recently launched PwC’s Investor Resource Institute, to give investors a better understanding of what we do. It’s important to us to understand investors’ perspectives and listen to them about what they are looking for. We can have a dialogue about how we can service the investor community.
You mentioned that you’ve been on the Standing Advisory Group of the PCAOB. What do you think of some of the PCAOB’s recent proposals, such as identifying the lead engagement partner’s name on audit reports?
As it relates to the partner proposal, we’re supportive of the PCAOB’s objectives regarding transparency. That could include the identification of the engagement partner. That said, how it’s done and effectuated perhaps still needs to be worked through.
FASB is finalizing the revenue recognition standard. How do you think that’s going to affect some of the firms that you audit?
FASB has been working on the revenue recognition standard for an extended period of time and they have been working hard to get the perspectives of the various sectors and have a good understanding of the relative impact and usefulness of the financial information to the public. I think they’ve been patient in working through that process. FASB has put together a good process. They have not rushed to get to an answer. I think they are aware of the impacts. It’s been a healthy debate. They’ve been deliberating and getting input, and I give them a lot of credit for trying to listen and address the various issues. The process has been thorough.
You’ve been involved with FASB’s Financial Accounting Standards Advisory Council so did you provide some input on the revenue recognition standard?
I came off of FASAC in 2009, but they were debating revenue recognition then too. Revenue recognition has been on the table for a long time. For all three of their big projects, whether it’s revenue recognition, leasing or financial instruments, FASB has been trying to make sure they’re collaborating with the International Accounting Standards Board. They have been trying in their process not to rush to a standard and be thoughtful with respect to getting input and understanding the ramifications so that they really are doing what’s in the best interest of investors and financial reporting to the public.
What are your plans for future hiring and talent management in the Assurance practice at PwC?
We have a very large practice and there are various aspects. One would be in our core practice. There’s a true dedication to our people strategy. Here at PwC, we have something called the PwC people experience.’ Being able to ensure that our people who join the firm come in and really have a distinctive learning and development experience is very important to us.
After they come to our firm, they have opportunities in the corporate field, and our objective is to have them want to stay and contribute at PwC because they are growing. We have various initiatives to deal with people as they develop their careers, including flexibility and getting different experiences, both here in the United States and around the world.
We talked about many of the other services beyond the core audit. They can get experiences doing other things in various practices. Being able to enrich their experience here at PwC is a big element of our objective so that our people have the view that they really would like to stay and contribute. PwC is a great place to practice your profession.
Clearly people go through life events. We are driving very hard an ability to both serve our clients but have enough flexibility. We do work hard at times, but we try to find the flexibility with respect to what you do. One of my sons works with the firm, and he tells me all the time what the reality is for somebody at that stage in his career, and what’s important to him. I remember very well, being here over 30 years, when my children were younger, getting to the baseball field was immensely important. In different stages, there are different things, and that’s the kind of flexibility that we want to drive across our whole practice.
So work/life balance is really important?
Absolutely. As it relates to our people strategy, there is another element that we believe is going to be very innovative in our firm with respect to talent transformation and how to be able to motivate, coach and develop people into the future, understanding the new generation and understanding people’s values and how they can work in today’s business environment. We’re making a major investment in how to accomplish those objectives in true transformational activities.
Are there any changes you see coming up in the auditing and assurance field?
Some of the changes that are being made in the accounting and auditing profession, I believe, are positive as they certainly demonstrate the relevancy of what we do as a profession. Whether it’s the changes to the auditor’s report, clearly investors are looking for more information. That demonstrates how relevant we are as a profession and what we do in servicing investors.
Since the financial crisis, it seems like people have been demanding that the auditors get more involved in calling attention to any problems that they find in the financial statements.
Do the firms have liability concerns with auditing because they get held to account more by investors?
In our current environment, we are focused on delivering high-quality audits that clearly service investors. In understanding our responsibility, certainly there are learnings from the financial crisis and some of the debates that have come out since then, and we are incorporating those into what we try to do with respect to delivering high-quality audits, along with the changes that are going on, whether it’s with technology or other types of changes as we move into the future.
Such as the auditor’s reporting model?
That’s one of them. Clearly our number one objective is to deliver quality that’s distinctive in our profession. We want to deliver a unique PwC people experience with respect to coaching and mentoring and the transformation that we have with our people. They are by far the largest objectives that I’m trying to deal with so that we can really continue to be a distinctive firm. We believe PwC is a very distinctive brand, both in how we service our clients and when our people come in here, the experience that they have to work here. It’s been very successful, and my job is to continue that success and continue that momentum.