John Leotta
National Audit Leader
John Leotta is a National Audit Leader with Deloitte. He is a member of Deloitte’s Energy & Resources Industry Group and has previously held a number of leadership positions, including National Leader Real Estate and Construction, and audit Operating Unit Leader National Strategic .
For John, trust is about having confidence, integrity, belief and credibility – whether applied at a corporate or individual level.
“It’s the individual that instills confidence through truth and a sense of reliability, but with a backdrop of a strong organisation, a strong brand, quality service and product.”
As an audit leader, opinions are anchored to an ethical and professional standard. For those opinions to be trusted requires integrity in how an auditor will work with management and the capabilities to justify that belief. Those capabilities must be consistent across the team, and the team itself must work together in an environment of trust.
Ultimately our team must feel trusted and trust us to
provide the opportunities to develop their knowledge and their career because
our interest is genuine. In turn, this breeds the next generation of audit
professionals to keep providing that confidence to the capital markets.
On a day-to-day basis, John is focused on how best to engender this confidence, working alongside multiple stakeholders, typically the CFO, CEO and the broader executive. For reasons of governance, he has a separate responsibility to the audit committee chair, the board and ultimately the shareholders. “Importantly, we play a key role in providing confidence to the capital markets, and here we share a common purpose with the regulator, the Australian Securities and Investments Commission,” says John.
Respectful scepticism
With such a range of stakeholders, ‘professional skepticism’ is crucial. It’s not an adversarial view, more of a respectful search for the truth, looking for contradictory evidence, to confidently challenge management or the board. It’s about ensuring that conclusions are thoughtful and considered, and ultimately can be trusted.
Arriving at the right conclusion requires judgement.
Things aren’t always black and white. Often there is a range of different outcomes. It is so important to have somebody objectively look at a board or management’s judgment and offer an opinion, considering a range of options from conservative to aggressive, as often they don't otherwise have that objective measure.
Asking why a certain position has been deemed the most appropriate helps to shore up the thinking and engender confidence. Or the challenge may inevitably lead to a position being changed.
A good example and one more relevant in the recent economic environment is impairments: for example whether a company’s investment or assets are still worth the same as they were before a disruptive period. After analysing future cash flows and other key assumptions, there can be a value disconnect between auditor and company’s leadership. John and his team may need to disagree and suggest an adjustment to the value.
“We're not advising in such cases. We're effectively assessing the value. This can be a difficult conversation but one that inevitably builds trust. A ‘call it like it is’ moment, rather than sugar-coating a problem or agreeing without diligently questioning everything.”
Two heads work best
Much has been talked about regarding the automation of industries and while auditing can leverage certain number-crunching AI and other digital technologies, ultimately John is just as focused on leveraging the intelligence of another Deloitte Partner.
“You can't simply systemise where there's a judgmental evaluation of a range of outcomes, or a number of different inputs you have to evaluate. Our model of consultation ensures we have the depth of lived experience in the room to confidently manage the issues and make the judgements that need to be made. When conclusions need to be challenged, experience counts,” says John.
Sustaining trust in sustainable reporting
Auditing is constantly evolving to meet the ever-changing requirements from regulators and the interpretation of new laws. One of the most recent changes is in the nascent regulatory area of sustainability and ESG compliance, with new laws, standards and frameworks designed at pace. Sometimes six to 12 months, compared to several years.
“We are playing a key role in sign-off on climate frameworks, helping organisations transition to renewables, more sustainable practices, and workforce practices – even supply chain governance or ethical concerns like modern slavery. We are playing a critical role in this trust equation.”
John is passionate about his work, how rewarding it is to solve issues, deal with complex judgments, and manage stakeholders externally and across Deloitte teams around the world. Once an exclusively financial instrument, auditing has rapidly evolved to become an end-to-end solution. Helping clients create value, make better-informed decisions, or navigate new reporting standards while also playing an active role in creating a better, more transparent, and more trusted society.
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