The future of audit is here. Are you ready? (Sponsored)

Barry McCall speaks to Confirmation’s Director of Sales, Sandeep Shrestha, about the technological advances that are transforming the audit and accounting world.

Living in a world where ‘everything’ is digitised makes it imperative that businesses pursue innovation to disrupt their own business model before the competition does. “Digitalisation is changing the way we work. Businesses now need to be agile and that requires new thinking around processes, systems and data,” says Sandeep Shrestha, Director of Sales at Confirmation, the global leader in online audit confirmations. “For example, Uber is a taxi business without owning a single car and Airbnb doesn’t own a single property. The same trend has changed a lot of what we do as accountants and auditors. I worked in audit from 2009 to 2011 and looking back to that time, we could already see digitalisation coming.”

He points to simplified accounting software packages like Intuit QuickBooks and Xero, which bring automation technology within reach for individual accountants, bookkeepers and small businesses. “About 19 years ago, Confirmation came along and revolutionised the audit confirmation process,” he notes. “Now we have artificial intelligence, machine learning and blockchain, which have come along. These emerging technologies are changing the way we do things.”

One example of this new technology is software that uses artificial intelligence, data analytics and machine learning to identify anomalous transactions. “The Big 4 have developed their own technologies for this but new, similar software is now available to everyone, and accounting firms of any size can use it,” Shrestha notes. “When I was auditing, we did random sampling. Now we can have 100% of the data as the sample. The anomalous and inconsistent transactions become the sample to be interrogated. 
You can spot every inconsistency instantaneously. It really is a game-changer and it’s continuing to change every day. Auditors will have to change their game to keep up.”

But some people remain unconvinced about the benefits of the technology. “Every conference I attend, I meet accounting professionals who are interested in new technology and looking for ways to introduce it into their business,” he notes. “When I speak to them again and ask if they want to use the solution, more often than not they say they love the technology, they really want to use more technology in their businesses, but often struggle with buy-in from key decision-makers within the business.”

Shrestha says professionals who already use the Confirmation platform and other advanced technological solutions understand their benefits. “You have to look at what the technology can do in terms of operational efficiency gains. It can reduce the hours spent on tasks and allow you to use those savings to spend time on other areas of the business. It can also help unlock the power of data. Accounting firms hold a lot of financial data and they can use it to identify opportunities for themselves and their clients.”

He points to the benefits the technology is already delivering to both accountancy firms and their clients. “Solutions like Autoentry are offering data-entry automation,” he notes. “This frees up people from low-value repetitive tasks and allows them to focus on higher-value work. I had to enter all of the data manually when I was working in an accountancy firm, which allows for mistakes to be made – that’s only natural. Mistakes are minimised when you automate the process. Even Xero and QuickBooks perform double-entry bookkeeping for you. If you’re self-employed, you can take a picture of a taxi receipt and mark it as a business expense. Software will recognise similar transactions in future. They will expect their accountants and auditors to use technologies at least as advanced.”

Another issue is competitiveness. “If firm A does not use technology and firm B does, it’s only a matter of time before firm B moves ahead, reduces costs and improves efficiency and profitability, leaving firm A behind,” he says. “Firm A will not be able to compete at the price levels firm B is able to pitch at. Audit services can be very price sensitive and firms have to be competitive. If auditors don’t have up-to-date technology right now, they are not future-proofing their business.”

Talent is another consideration. “Firms want to attract and retain the best talent,” he adds. “A final year student in accounting and finance wants to go and work for an accountancy firm that is innovating and utilising the latest technology to the best effect. They are digital natives and don’t want to go backwards to the days when auditors worked on Excel files with shoeboxes full of paper receipts. Because of their high-tech and hyper-connected upbringing, they will bring a new set of behaviours, expectations and preferences into the workplace.”

He advises firms to stand back and take an in-depth look at where they can benefit most from the technology. “You need to pause and look at all of your internal processes and the type of clients you serve,” he says. “After that, you should sit down and assess what processes can be automated and how technology can improve others. You need to assess and identify gaps and opportunities, see where a piece of technology can add value and reduce costs. Most software companies are happy to offer free trials. Firms need to confirm the value of technology, and they will find that the efficiency gains and reduction in errors quickly repay the upfront costs.”

When it comes to implementing technological solutions, he advises firms to look at where they can use technology to make small changes first. “They should start by developing a digital philosophy, then look at the various pieces of technology on the market and see which best suits the firm in terms of functionality and cost. Once you choose the technology, it’s important to manage the change properly and introduce it to one area at a time and one step at a time.

“Technology is a problem solver,” he concludes. “With the Confirmation platform, it’s so easy to implement and yet, it can reduce the audit confirmation process from eight weeks to three to five days, and that would just not be possible without the technology. That’s why it’s used by 200,000 auditors, 5,000 law firms and more than 4,000 major banks and departments around the world on more than $1 trillion worth of transactions every year. The technology we offer enables our customers to save time and money, stay competitive and attract the best talent and – of course – combat fraud.”

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

(This article is sponsored by Confirmation.)