The Inevitable Digital Revolution
We all see it, our audit clients are going through a technological revolution. Digital innovation is upon us. Words like efficiency, productivity, labour, new markets, have taken on new meanings as their scope and boundaries grow exponentially.
So, what is the role of the auditor in all this? Auditing experts have a unique challenge before them, not only do they need to allow new technology into their field, they need to do so and match the client’s leap forward. How do you audit drones and robots? As businesses change in unimaginable ways at unprecedented speeds, auditors must find ways to keep up with the new demands. Here are three technologies that promise to revolutionise the auditing industry:
Audit professionals are perhaps too accustomed to the idea that the only way to perform Audit Analytics is through people with specialised data analysis skills and tools that require strong technical knowledge. Organisations with this thinking tend to be able to carry out excellent analysis, but lack the ability to increase capacity and scale.
Auditors must typically carry out their investigations by using samples of transactions to audit. This requires skill and experience, but is nowhere near the capabilities of data analytics tools. Now, an entire set of transactions, whether 100 or 1 million, can be tested at once.
Unfortunately, things still need improvement, and auditors are waiting for businesses to consistently enter quality data, which will then lead to quality insights.
Robotic Process Automation
One of the most highly anticipated innovations coming to the CPA profession is Intelligent Process Automation (IPA). It is a process that includes:
- Robotic Process Automation (RPA)
- Artificial Intelligence (AI)
- Cognitive Computing (CC)
- Other technologies
It looks set to overtake the less capable Robot Process Automation (RPA) which is well-suited to some tasks but has its limitations. IPA is capable of making automation scalable, flexible and intelligent. IPA is the trend of the future in automation.
Although IPA sounds incredibly futuristic, it won’t fully replace human beings – yet. Instead, IPA is aimed at significantly reducing employee time spent on manual and repetitive tasks. This will allow our human auditors to focus on high-value, creative tasks.
A blockchain is a digital ledger created to capture transactions conducted among various parties in a network. It is a peer-to-peer, internet-based distributed ledger which includes all transactions since its creation.
Some have suggested that this would eliminate the need for an auditor entirely. If all transactions are captured in a blockchain forever, then what is an auditor for?
In fact, blockchain is simply another tool that makes an auditor’s life easier, allowing them to focus on creativity. Blockchain simply records the transaction, but tells us nothing about the nature of the transaction.
Was it an illegal transaction? Incorrectly classified in the financial statements? Unauthorised? These are questions that only an astute auditor would know to ask.
Digital Innovation in the Auditing Industry
It seems that the role of the human auditor is still very much necessary to execute a successful, creatively analysed audit. Professionals, however, need to keep their eyes on the technologies that are on the verge of causing paradigm shifts in the business community in general, and in the world of accounting and auditing services in particular.
Brown Assurance Services is a tech savvy, human driven assurance and auditing company. Call us today to learn about the latest in auditing technologies and services.