The auditing profession is in the midst of the most redefining change since the introduction of the Sarbanes-Oxley Act of 2002, and one emerging technology is driving that change in more ways than one: robotic process automation (RPA).
Most people who aren’t involved in the profession tend to think that auditors simply “check the numbers”. But our work goes beyond that – we apply technical accounting expertise and professional judgement to identify risks and opportunities, uncover data-driven insights and act as a strategic advisor to the organizations we work with. But there are still routine, non-judgmental tasks that we perform – many of which can be, and should be, automated. This can free up valuable time for auditors to focus our efforts on tasks that call upon our first-hand knowledge and experience.
The foundational principle for RPA is to automate repetitive, mundane, rules-based office tasks in order to decrease human error and reduce cycle time at a lower cost. Take a junior auditor as an example. He or she may need to spend several days manually adding information from bank statements into an electronic worksheet, whereas RPA may complete this task within a few hours, and without added delays that might result from correcting data entry errors.
The auditor, retooled
While RPA has many advantages, it’s still in the infancy stages in the auditing industry.
“The core competencies are not 100% there yet, and technology does not operate in exactly the same way that humans do,” says Biren Agnihotri, EY Canada Intelligent Automation Leader. “This means the technology needs oversight from professionals who fully understand its benefits and can derive actionable insights from the data.”
Of course, as RPA starts to become more ingrained in day-to-day audits in organizations both large and small, the nature of the auditing job will change as well. Moving forward, all auditors will require more hands-on technical skills to keep pace with the demands of the digital world and the increasingly technological demands of the profession, not only so they can implement RPA but also so they can better understand the contexts in which it operates.
While lower-value tasks will be replaced by RPA, humans are still the most critical element of the auditor toolkit: through their deep-seated expertise, they can spend more time providing relevant insights to deliver true value to organizations.
Closing the skills gap
The RPA shift is also driving the need for more talent with technical competencies. There is a talent shortage in the industry that must be addressed – and soon. The challenge is two-fold: first, firms have to invest to upskill and train their professionals. And second, they have to hire different skill sets for the future to ensure they’re able to address market demands and make the most of the opportunities created by technologies like RPA.
Education also plays a key role, and what’s clear is that the professional auditor curriculum requires a reimagining. An increase in the integration of finance with data-driven and technology oriented programs at universities, at school and in the workplace will help ensure that the employees of today – and tomorrow – are adequately prepared for the future. We have seen the Certified Financial Analyst exam include blockchain on the curriculum and the audit profession must keep pace.
As RPA continues to evolve, the next wave of automation will integrate artificial intelligence. These deep learning capabilities, layered over top of process automation, will undoubtedly enable the auditing profession to soar to new heights. Research company Gartner predicts that, by 2020, AI will create more jobs than it eliminates. Change is inevitable and constant, and we need to be prepared to take advantage of it.
To propel itself forward, the auditing profession must embrace technology as an essential part of the auditing toolkit. Similarly, organizations that want to competitively differentiate themselves and take steps toward modernization would be wise to invest in new technologies and talent with the right skills, or risk falling behind.
At EY, we firmly believe in leveraging the latest technology solutions to help drive that change forward. That’s why we recently invested US$1 billion in disruptive technologies that will offer more robust solutions in all practice areas, including audit. And leading research firms are taking note of this long-standing commitment, with a new report from Forrester Research recognizing our firm as a leader in innovation consulting services.
If you’d like to learn more about how EY can help guide you on a transformative auditing journey, get in touch with me or visit ey.com/assurance.