Getting ready for the digital future (Sponsored)

Dec 02, 2019
CONFIRMATION’S Fergal McManus considers some of the changes technology will bring to audit in the years ahead.

The impact which artificial intelligence, machine learning and other automation technologies will have on the audit process and accountancy practice in general is a hot topic, but it is nothing new to Fergal McManus and his colleagues at CONFIRMATION.

CONFIRMATION, part of Thomson Reuters, is the digital platform and global network trusted by audit firms, banks, law firms and other companies to quickly and securely verify financial data. Founded in 2000, CONFIRMATION has pioneered electronic confirmations and reshaped and modernised the audit confirmation process. Today, CONFIRMATION helps 200,000 auditors in 170 countries confirm more than $1 trillion in financial data every year.

Other parts of the audit process are finally about to follow, according to McManus. “Technology is making audit firms more efficient,” he says. “AI and blockchain are becoming more prominent at the moment and offer the potential to automate a vast amount of the manual work that all of us loathe doing.”

The impact will be profound. “We are used to doing audits from the top down, starting with the financial statements,” he says. “Automation will allow us to go from the bottom up, using the complete dataset. That will open the prospect of 100% sampling, which will greatly improve the process. That’s something that’s popping up everywhere in discussions and it will definitely shape the future of audit. We digitise and automate one part of the audit process, but the wider audit is making strides forward in automation.”

The CONFIRMATION platform has delivered real benefits to auditors through the years and will help them prepare for the other elements of automation coming down the line. “From our perspective, we focus primarily on audit confirmations,” says McManus. “That’s what we specialise in. The audit confirmation process was traditionally a very laborious process. Sending out faxes, emails and letters and waiting for responses – sometimes for weeks and months on end – can be very frustrating. If you don’t get the response to the confirmation request, you can’t complete the audit.”

CONFIRMATION operates at the intersection of efficiency and fraud detection, he explains. “The platform ensures auditors receive timely confirmations from authorised parties and helps detect and eliminate fraud.”

Accountancy firms need to make the most of the opportunities presented by automation, says McManus. “I spend a lot of my time working with audit firms in Ireland and my goal is to make the confirmation process less of a burden for them,” he says. “My advice is to give CONFIRMATION a go. It’s easy to sign up, it’s just a two-minute process. Once you do that, you can reap the benefits of speed and fraud detection in the confirmation process.”

One of the key features of the platform is its massive user base. “We have long-standing relationships with over 4,000 banks and more than 5,000 law firms,” McManus notes. “That’s a huge network of responders who send secure, encrypted information much faster to auditors.”

Another feature is the ability to future-date requests. “This allows an auditor to proactively create and send requests up to 90 days ahead of the year-end, meaning banks can respond straight away once the year-end date arrives. In the US, the first week of October tends to be a very busy time on our platform, as auditors are putting in their advance requests for year-end.

“Once you have the information from a client on a particular engagement, the quicker you put requests through, the quicker you get responses back in January. You could have all the responses back at the start of January. That’s a super feature of the platform.”

CONFIRMATION also gets actively involved in the process. “We have an in-house account manager who works with our banks to speed up their audit confirmations process and help them respond to confirmation requests as quickly as possible. The platform is always moving forward and evolving in order to improve the experience for auditors. CONFIRMATION was founded by an auditor who was frustrated with the inefficiency of the confirmation process and, to this day, all updates are designed with an auditor mentality.”

McManus believes that AI, machine learning and other technologies will have a significant impact in the short-term. “We are automating the confirmation process. This trend will continue, and we are seeing small- and medium-sized firms now moving away from paper-based and manual processes and adopting our platform. It is now imperative for auditors to reduce the time and effort spent on the audit confirmation process so that they can invest that time in providing additional value to their clients.”

To get in touch or learn more, visit www.confirmation.com.