Embracing the future of audit (Sponsored)

COVID-19 has pushed many audit firms into working remotely and completely online. This unexpected shift has accelerated the adoption of new technologies at these firms. What firms had once seen as desirable now proves a necessity. Staff have recognised the value of remote working and their ability to maintain human connections through videoconferencing tools. Cloud-based software platforms offer greater ease of interaction and collaboration between multiple people such as when working on shared files.

This kind of online communication has become routine and can be used going forward for greater collaboration between auditors and their clients, building relationships based on mutual trust.

Many auditors have enthusiastically embraced change, particularly when that means automating routine tasks and enhancing communication. So, what else does the tech future hold for auditors?

As clients produce increasing volumes of data in ever-larger datasets, auditors can deploy advanced analytics to use this data effectively.

In their recent webinar on the Future of the Audit, Confirmation’s founder Brian Fox discussed tools such as Inflo, and their ability to seamlessly integrate with client systems to analyse and manipulate transaction-level data.

He compared this with junior auditors manually riffling through a stack of journal entries, struggling to do more than scratch the surface.

Systems using AI techniques, such as machine learning and data mining, can rapidly trawl through a company’s financial data to flag up areas of concern and any outliers that merit further investigation, and natural language processing applications can read through hundreds of pages of documents and reduce the time it takes for auditors to review, say, a client’s lease contracts.

With the introduction of 5G device-to-device communication, the output from these complex tasks can be presented to clients in real-time, enabling auditing to take place throughout the year, not just at year-end. 

As Inflo’s CEO, Mark Edmonson said, “If we can shift the value of audit to something that gives real-time insights and helps grow the business, it will become a much more interesting proposition.”

The growth of online working has also led auditors to reflect on how many site visits are actually necessary. Do they need to be present in-person to check inventory, for example? 

In a 2018 Journal of Accountancy podcast, EY’s Hermann Sidhu discussed the growing use of drones to check warehouse inventory or inspect sites such as mines or timber yards. The process can be done outside working hours and at greater speed by a machine than a human being.

These are among the many innovative tools that auditors will have at their disposal in the future, sitting alongside digital platforms like Confirmation that serve to enhance security and drive efficiency.

Confirmation pioneered the idea of digital confirmations in 2000 and still leads the industry today. More than 16,000 audit firms, 4,000 banks and departments, and 5,000 law firms have put their platform to work. They span 170 countries and process more than one trillion dollars in confirmations each year.

(This article is sponsored by Confirmation.)