AUDIT

How Technology is Changing the Future of Audits

As one of the world’s purest examples of information collection, organisation, and processing, auditing is set up to benefit from the latest advances in software in a way that few other sectors can match. Data analytics, artificial intelligence, machine learning, robotic process automation – these and other related innovations are a perfect fit for the complex demands of the auditing world.

Many of the challenges facing the current generation of auditors involve the close reading of contracts, identification and analysis of transactions, reconciliation of accounts, checks for anomalies and inconsistencies, and generation of reports. With the benefit of new technology, each of these requirements can now be met faster and at a higher level of accuracy than ever before.

Simply put: Today’s computers can perform data-based logic tasks faster and more reliably than ever before. The current challenge in the auditing world is to develop systems which let human auditors and their silicon counterparts collaborate in ways that play to each other’s strengths.

 

The abilities – and limits – of today’s machines

Audit software can now perform most of the essential tasks of an audit. Optical character recognition (OCR) lets computers scan and process documents in an instant, bypassing the need for lengthy human review, and offering a real-time window into new developments within a client’s system.

Blockchain-based audit bots use distributed ledger technology to automatically keep track of each transaction as it happens, eliminating the need for later account reconciliation. Clients’ financial statements are also auto-generated, removing the possibility of tampering with the data undetected. It is worth emphasising that such an approach builds best practices right into the system, and in doing so helps audit firms accomplish their own over-arching goal of providing a benchmark for trust and consistency within the wider economy.

At the same time, analysis from the collection of publicly available Big Data means that the software is able to predict a client’s audit details in advance – thereby providing instant alerts if the actual data diverges meaningfully from what is expected. When client data has been collected, organised, processed, and evaluated, the AI software automatically generates comprehensive reports for review.

In such an environment, human auditors will be able to spend more energy focusing their investigations in new directions. With software doing the bulk of the heavy lifting during a routine audit, human auditors will have more freedom to examine apparent inconsistencies as well as unusual transactions or data points.

The auditors of the future will therefore need to stay current with the changing business landscape, in order to stay informed regarding sectors and business models that are new and lacking in background data for algorithms to analyse. Auditors must also be able to collaborate smoothly with their computer partners, while continuing to use advanced interpersonal skills to better understand their clients and the business choices they have made.

While humans can now and forever pass the torch to computers in terms of brute calculations and information processing power, advanced analysis and client consultation still require the kind of real-world experience that only qualified auditors can bring to the table. By taking full advantage of the unique capabilities of people and machines, audit firms can provide their clients with comprehensive and reliable analyses that are cheaper, faster, and of better quality than ever before.


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