Changing with the times (Sponsored)

Jun 03, 2019
Advances in technology are impacting the audit and accounting professions in a variety of ways. Kyle Gibbons, Managing Director for Europe with Confirmation, and his colleague Fergal McManus, Regional Account Manager for Ireland, explain what the changes mean for the industry.

Technology is transforming the way we live our lives, so it should come as little surprise that it will have an impact on auditing. That’s the view of Kyle Gibbons, Confirmation’s Managing Director for Europe, who points to his firm’s online audit confirmation platform as an example of a tool that wasn’t available to auditors just a few years ago.

“Technology is changing not just audit, but all aspects of our lives,” he says. “New tools are becoming available all the time. There was no electronic technology involved in the audit process 50 years ago. Now, a lot of the work previously done on paper has been automated. The more standardised pieces of work are being carried out by machines. For example, 100% sampling will happen more and more in future; auditors will no longer have to extrapolate from samples of 5% or 10%. That will be a welcome advance.”

This will require more senior audit professionals to learn new skills, sometimes from surprising sources. Their junior colleagues just starting their careers will quite often be far more familiar with the latest technologies than they are.

“Younger people are digital natives,” says Gibbons. “By and large, older professionals have not grown up in the tech space. For example, younger professionals are using WhatsApp to communicate with colleagues. There’s nothing wrong with that, but some people think it’s not appropriate to use chat messaging technology for this purpose. Younger people see little reason for a divide between the tools they use in their private and professional lives, so the most valuable thing experienced auditors can do is ask if technologies are beneficial and add to the audit process. If the answer is yes, adopt them.”

Fergal McManus agrees. “This generation of younger auditors coming through are using technology in every aspect of their lives: for learning, hailing taxis, ordering food, monitoring their health and so on. Their older colleagues should watch, listen, and learn from them even though there can be a bit of a fear factor, which is understandable. Technology does bring change and not always for the better. We have to make sure that it does make things better for auditors and accountants.”

However, learning is not all one way. New entrants to the profession still have much to learn from their more experienced colleagues. “It’s the other side of the same coin,” Gibbons points out. “People can become too dependent on technology. People don’t engage their critical faculties as much if they use technology all the time. Some people see little need to calculate sums in your head if you have a calculator on your phone, for example. However, the value in going through the process is that you see how you get the answer.”

He asserts that many junior auditors don’t know what a confirmation is. “They think it’s something just given to them. As the confirmation process is increasingly automated with tools like ours, they don’t think about the purpose. Experienced auditors know these things and understand the need to gain comfort around assets and liabilities through independent confirmation. Younger auditors don’t necessarily appreciate that, and this is an example of what they can learn from their older colleagues.”

The way auditors do their work will change as well. “More of the day-to-day work spent on crunching numbers and cross-referencing in a routine way will be phased out and replaced by technology,” Gibbons points out. “Accounting firms need to prepare themselves for that. They will need to hire people who can do the high-level work which can’t necessarily be replaced by a robot. They will need people who can exercise judgement and are good at communicating and building relationships. They must also be open to change. Those that do will be profitable and successful in the future; those that don’t will have their margins eroded over time.”

Students will have to be prepared for these changes as well. “The universities and educational institutions will have to train students in how to use platforms like Confirmation,” says McManus. “Students have to be prepared for what the new audit world will look like when they leave college, and that preparation has to be introduced throughout the courses. The institutions also have to be proactive and look ahead to future technological developments.”

While there will be challenges, advances in technology do promise a brighter future for the audit profession. “What our technology does is save time,” says McManus. “It takes away manual, mundane processes from junior auditors and enables them to move into more engaging work. Rather than spend time folding paper and licking stamps to get confirmations, they can move into other areas of audit with much higher levels of job satisfaction.

“Technology helps gain knowledge and expertise much quicker,” he continues. “It makes the role more challenging and the work more gratifying and this, in turn, helps with recruitment and retention. Graduates coming out of college expect to use the latest technology. They have already been using it in every aspect of their lives, so they expect to use it in work. They want to work with the best technology available and don’t want to spend their time on outdated manual processes. The firms which adopt the latest technologies will be the ones that succeed in attracting the best talent.”

This article is sponsored by Confirmation.