Lesson 3: Confirmed: a data-first mindset sparks better questions
Our digital audit approach deepens our understanding of the companies we audit and helps us fulfill our responsibilities as independent auditors. The question is: how can we use this experience to propel us into the future and drive the evolution of the independent audit?
Data helps our audit teams bring objectivity and a skeptical mindset to the audit – a commitment to see old processes with new eyes. They use first-quarter or early-year data to develop a comprehensive audit plan that focuses on the risks that matter.
For example, incorporating the Helix Analyzer reports on general ledger and subledger data into risk assessments helps audit teams to better understand the sources of and flow of transactions. This allows EY teams to ask probing questions about areas where there are risks of material misstatements and the controls that are designed to prevent them. Using a data-first approach can inform walkthroughs and make sure that our teams capture all the critical risks. A data-first audit enables the audit team to develop a more holistic view of business processes by enabling teams to see the correlations between multiple accounts.
We know that data can challenge assumptions and present insights and inspiring new perspectives. Building that in at the front end allows the auditor to deliver value in real time throughout the audit cycle.
What comes next?
Like everyone, we are continuously absorbing and applying the knowledge gained from working through today’s business and regulatory environment. Our clients are addressing the complexities in accounting and corporate reporting resulting from these shifting cycles. But one thing is certain: a data-first approach is the key to delivering an audit that is responsive to the ever-changing risk profile of our clients.
At Ernst & Young LLP (EY US), our clients and our audit professionals alike meet change with a new appreciation for the technologies that enable the digital audit. We are seeing that data-driven procedures can bring insights to management and audit committees that enable them to be proactive in investigating issues and addressing risks.