As technological innovations continue to expand minds, break boundaries and introduce new ways of working, industries worldwide are transforming faster than ever. Concepts that were unimaginable or felt like science fiction only ten years ago are becoming the new reality and data sits at the heart of much of this. And while the potential benefits of this tech revolution are huge, there is increasingly a question of trust around how data is used, analyzed and stored.
For the audit, data-driven technology has the power not only to revolutionize the profession—both in terms of access to information and in streamlining workflows—but also to provide greater insight and analysis of the audit. This in turn helps the profession to provide high-quality audits, building greater trust and confidence in the capital markets.
Automation makes it possible to remove the more time-consuming, mundane, process-heavy work that auditors did manually, leaving auditors to focus on the areas of the audit that matter most – identifying potential risks and responding to them. With such vast quantities of data at their disposal along with the latest analytical and visualization tools, auditors are able to identify and address these risks.
Large-scale databases can collect, hold and process terabytes of data, significantly increasing the amount of content that can be assessed. To give a sense of the scale we’re referring to, EY Helix, which is a global audit analytics tool, analyzed over 250 billion lines of journal entry data in just the past 12 months.
Tools such as EY Helix are able to delve down to the level of individual transactions line by line, analyzing them in the context of the whole, supporting a deeper understanding. With this insight at their disposal, EY teams can see trends and patterns of activity that wouldn’t have been visible with a statistical sampling approach, helping them to hone in on the areas of greater risk and interest.
The benefits of utilizing automated systems are therefore clear. However, there are challenges to overcome if automation is to be fully embedded into the audit landscape. Virtually all organizations are on a similar journey, streamlining a vast amount of structured and unstructured data as they look to enhance their analytical capabilities and drive more speed and transparency in their financial process.
The key to the wide adoption of analytical capabilities is trust in the security and integrity of the data, wherever and however it is shared. When companies are providing the detailed information necessary for effective audits, they need to be completely certain it is safeguarded at all times. Auditors need to provide evidence they are responding to these very real client concerns: those who rise to this challenge need to demonstrate advanced security systems to guard against hacks and breaches. As they invest in new technology and modernize in tandem with their clients, they need to ensure that gaining and preserving trust is always the main priority.
It is clear that technology is driving the future of the profession and in time, these challenges will be overcome. Audit, like all other industries, is modernizing; technology will play a central role in this, and levels of trust in the technology will increase.
However, it is important to note that despite the immense power of this technology, audit is not becoming a machine-led industry. An auditor’s judgement, experience and sector knowledge remain essential and it is their deep understanding of the audit process that allows technology to be seamlessly integrated into the areas where it will make the greatest impact. Instead of replacing the role of the auditor, automation is enhancing it, equipping audit professionals with more reliable and detailed insight from which to apply their professional skepticism, add value and provide high-quality audits.
Striking a careful balance of data, technology and human insight is critical in today’s audit profession. When achieved, the skill and experience of audit professionals are complemented by the efficiency of technology, leading to a more insightful and valuable audit for all stakeholders. It is in this environment where the deep benefits of modern technology are most evident.
This article was previously published by Accounting Today.