Thought Leadership

Lluís E. Guerra Vidiella

Auditor

Adjunct Professor at the University of Barcelona

Barcelona, July 2025

Those who know me in the profession are aware that I have spent the last few months reflecting on the hyper-regulation of statutory audit, and that I feel nostalgic for an era—the late 1980s and early 1990s—when auditors pursued professional excellence guided by ethics, values, effectiveness and efficiency. We were driven by a genuine desire to understand businesses, analyze transactions with critical thinking and skepticism, and to deliver a rigorous, deeply professional response.

What drove us was an almost obsessive will to be the best. Today, however, the prevailing sentiment is one of sadness and suffocation: it seems we have replaced the desire to improve with fear of non-compliance. The focus is no longer on judgment or continuous improvement, but on surviving within an increasingly complex and normative framework.

Immersed in these musings, a few months ago, a dear friend—once a client—whom I hold in great affection, surprised me with a gift: a copy of Aristotle’s Nicomachean Ethics. I must confess that I initially struggled to get into it; however, little by little, the text captivated me. I discovered in it not only a source of ancient wisdom but also a work that directly challenges our way of living today—and one that, in particular, resonated with my reflections on the profession.

I began reading at night, unhurriedly, pencil in hand, and the further I progressed, the more surprised I was to feel that this text, written over two thousand years ago, had something to say to today’s statutory auditors. That’s how I came to draft a gentle reflection on what Nicomachean Ethics can teach us about our professional identity.

The text opens with remarkable force. In Book I, Chapter 1, titled “Introduction: Every human activity has an end”, Aristotle begins with a powerful statement: “Every art and every inquiry, and similarly every action and choice, is thought to aim at some good”. I can think of no better way to introduce the rest of the book.

This idea—simple yet profound—reminds us that human beings, in essence and generally, tend toward the good. Our actions, choices, even our doubts, stem from an intention oriented toward what we believe to be good. There are always exceptions, like the black keys on a piano: more visible, but fewer in number and smaller, but the ordinary tendency is toward the good.

Among colleagues and in many conversations with the regulator, I have often heard a phrase that resonates strongly: “We all want to do things right.” And I am convinced it’s true. The natural disposition of the auditor—like that of any upright professional—is to act correctly and pursue the quiet satisfaction of a job well done.

Thus, with this foundational idea, Aristotle gives us a powerful starting point: anyone who performs their duties with responsibility—including auditors—faces their professional purpose with a firm will to do good.

The auditor, in this sense, is fully aware of the why behind their work. They do not act merely out of external obligation or fear of penalty, but are driven by the conviction that their work holds a deeper meaning: contributing to the common good through their professional practice. This awareness not only guides them, but also motivates them to grow, to pursue further learning, to refine their judgment, and to act with intellectual honesty—not out of regulatory imposition, but out of coherence with their purpose.

For that reason, our work cannot be reduced to merely “complying with the rules.” Compliance is, indeed, a necessary condition, but not a sufficient one. The virtuous auditor—following Aristotle’s logic—is not the one who simply ticks all the boxes on a checklist, but the one who orients their professional life toward continuous improvement, knowing that every decision, every judgment, every report, can and should serve a higher good: building trust, protecting third parties, and ensuring that financial statements truthfully reflect reality within the regulatory framework.

At the core of his reflection, Aristotle affirms: “Human good turns out to be activity of soul in accordance with virtue”. This idea, which defines happiness as the virtuous exercise of our capabilities, can also be applied to the profession: the auditor finds fulfillment and happiness not in mere compliance, but in the ethical and excellent execution of their role.

But this virtuous practice does not arise spontaneously or automatically. Virtue—Aristotle reminds us—is forged over time, through habit and the repeated performance of right actions. That is why the auditor’s will to improve and grow professionally is a crucial factor for the health of our profession. Improvement and growth are not immediate processes: they require a career path, perseverance, effort, and a professional life oriented toward the common good and supported by systems that accompany and encourage that virtuous aspiration.

This is how Aristotle puts it in Book II of the Nicomachean Ethics, when he states: “Hence, (ethical[4]) virtues are neither by nature nor contrary to nature, but we are by nature able to acquire them, and we are completed through habit.”

This principle emphasizes that fundamental qualities in our practice—such as professional judgment, skepticism, or independence—are not acquired through laws or manuals, but are shaped through repeated practice, careful deliberation, corrected errors, and decisions shared with experienced colleagues.

Relying solely on the rules, without internalizing the principles and values that inspire our purpose, poses a serious long-term risk. Many of us, trained in the 1980s and 1990s, had the privilege of integrating those principles into our professional DNA. But a young auditor today does not become virtuous by knowing the regulatory text, but by acting rightly again and again, until sound judgment becomes second nature. The question that challenges us is how many of those youngsters today reach that level of virtue, in view of the statistics on premature abandonment of the profession and the lack of solid role models.

We must also acknowledge that prudence is one of the main virtues of an auditor. According to Aristotle, virtue is the mean between two extremes of vice: "(...) every expert avoids excess and deficiency, and seeks and prefers the mean; but not the mean of the thing, but relative to us."

I vividly remember, back in 1992, one of my professors from the doctoral courses — then the director of the Barcelona office of one of the international Big Four firms — who used to insist: “Auditing is a profession of responsibility.” Over time, I understood that he did not refer solely to regulatory compliance, but to the moral weight of our conclusions. Being an auditor, he told us, means understanding the consequences of what we affirm or omit. And that requires more than technical skills: it requires prudence. Today, rereading Aristotle, I recognize in those words a profound intuition of that practical wisdom which is not reduced to applying rules, but deliberates well on what is right to do in each specific case.

Therefore, the auditor must also seek this mean: neither indulgence nor inflexibility; neither paralyzing skepticism nor naïve trust. One must know when to stop, when to doubt, and when to move forward. And that knowledge does not come from the rules: it comes from experience, character, and the virtue of prudence.

In Book VI, Aristotle distinguishes five types of wisdom or dispositions of the rational soul that enable the attainment of truth, and reserves prudence for those who know how to deliberate well about what is good and convenient for life: "Prudence is a true, rational, and practical disposition concerning what is good and bad for human being".

Prudence is central to the professional dignity of the auditor. Aristotle distinguishes it from mere technical skill: it is not enough to know how to apply rules; the good auditor must be practically wise, deliberate well, act rightly, and consider the common good. This is exactly what we do when we deliberate on the significance of a risk, the sufficiency of evidence, or whether to issue a qualification. The auditor needs prudence, not just rules. In times of hyper-regulation, where everything seems designed to limit judgment, this dimension of our profession is obscured. Yet it remains essential: without prudence, there is no true auditing.

In chapter 2 of Book II, Aristotle insists that virtue consists in finding the mean between excess and deficiency, and that "he who deviates slightly from the good can still correct himself, but he who strays too far, like those far from the center, cannot even recognize the error." This principle can inspire a key question: should we not apply the same criterion to the regulation of our profession?

A balanced regulation would be one that, without ceasing to protect the public interest and without renouncing the technical and ethical guarantees of audit work, does not suffocate the professional with overly detailed procedures, redundant documentation, and mechanical reviews that end up displacing judgment and personal responsibility.

Excessive regulation can be as harmful as laxity: both extremes endanger professional virtue. The first by replacing judgment with blind obedience; the second by giving way to arbitrariness. The auditor’s virtue, by contrast, requires freedom to decide, training to do it well, and awareness of the ultimate goal: to contribute to the common good through transparent and truthful financial reporting.

From this perspective, it would be worth examining whether current regulations promote that virtue or, on the contrary, displace it. A virtuous regulatory framework would be, following Aristotle, one that does not merely seek compliance, but fosters right action in those already inclined to the good. Is this not, after all, a legitimate aspiration for those of us who love this profession?

As an epilogue, reading Aristotle through the eyes of an auditor has led me to reaffirm that our profession is, above all, an ethical practice. It requires technical knowledge, yes, but above all it requires virtue: the virtue of being just, prudent, courageous, and temperate in the exercise of a public responsibility.

In this context, the dignity of the auditor lies not in their power or status, but in their ability to morally excel in a task that contributes to the common good.