Today, technology is driving a change movement in all walks of life, be it personal or professional. The way we live and work is revolutionizing and it is important that audit management does not stay behind in adopting the technology. Proactive understanding of how new technology trends will affect audit process and rapid adoption of this technology would transform the audit approach.
However, the technology transformation in the audits not just audited professional’s responsibility. As the audit process is becoming more collaborative within the organization, all stakeholders need to initiate this adoption.
Auditors should continue to invest in newer technologies and engage in constant dialogue with the regulatory bodies to adapt this change. A more risk-taking approach would be required to transform auditor’s role which would be supported by technology.
Company boards and audit committees will have to take proactive steps to resource their technology and effectively train stakeholders in order to understand the technology impact on financial reporting processes.
With a proactive mindset adopted by the organization, the organization should start to leverage technology capabilities to speed up the audit process and reduce the risk of error.
With Analytics technology making rapid improvements, it holds the power to enable auditors to focus their efforts on outliers in the whole data set and provides analysis of huge data sets. With the ability to analyze whole data sets rather than testing a sample based analysis, no data points would be missed in the analysis. With continuous audit review, it allows auditors to review audit evidence in real-time and identify issues and suggest changes in real-time.
Analytics would improve the quality of audits with the ability to categorize data and carry out focused analysis of complex data sets. However, with technology, it would be critical to maintaining data standardization for the machines to carry out advanced analytics.
With present reactive approach having many inefficiencies, the shift towards predictive analytics would help predict events, explain the occurrence using simulation and suggest most effective measures to maximize value.
With Artificial Intelligence-based cognitive computing, it provides audit professionals with many opportunities to improve their services and derive meaningful insights through their audit process. With natural language processing, auditors would be able to quickly locate, process and analyze key components from electronic documents. These ability helps the organization to focus efforts on a more meaningful area having a major impact while automating repetitive or low-impact tasks.
Auditors traditionally wait for year-end to carry out all audits. With Blockchain based Smart Contracts, an audit can be carried when a contract or transaction is created or done. With its secured distributed public ledger, the occurrences of misstatements due to fraud or error would be reduced. With Blockchain, auditing would become real-time bringing more transparency and accountability followed by extensive reporting.
With significant improvements, it presents a huge opportunity for the audit profession to become more trusted and relevant where they would not only conduct audits but also participate in audit based business decision.
Technology presents a bright future for audits but efforts are to start from today.
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