Transformation of technology enhancing audit procedures.
The transformation of technology has enhanced audit procedures evolving the traditional sources of information gathered during an audit. As businesses grow and operations become more complex, technology assists in analysing data.
Cloud software have allowed access to large volumes of data, which enables the audit process to begin before the site visit. The ability to obtain data earlier allows for audit planning and to identify risk areas to ensure the audit is tailored appropriately to the particular entity. Access to client reports allows auditors to identify transactions, which are outside of the normal transaction-level testing and gain further assurance.
Audit software have created opportunities to analyse data more efficiently and allows auditors to test a larger sample of transactions. An increase in samples can increase the quality of the audit, enabling auditors to verify every stage of documentation to address management assertions. This is particularly beneficial to such areas as revenue recognition.
Audit programs allow auditors to analyse account balances and movements, whilst also generating reports that provide a story of the business, such reports provide an audit and business insight to clients. In addition, access to large volumes of data allows auditors to spend time performing value-added services to clients including data analytics, which provide insights into the operations and processes of the organisation. As the use of data analytics increases among firms and technology evolves, this analysis may replace typical audit procedures.
The advancement in technology has demonstrated an improvement in financial reporting, the ability to detect fraud and identify business risks. Additionally, technology has allowed for auditors to keep up with the demands for compliance among areas including revenue recognition and internal controls. Technology has assisted in aligning the audit with the expectations of regulators, investors and clients.
Lastly, as the audit profession has significantly changed, there is a focus for junior accountants to have such skills as business acumen and ability to interpret complex data. Due to technology, junior accountants are exposed to more high-level tasks rather than spending countless hours agreeing bank account balances.
Whilst the end result appears the same to clients, the audit procedures have changed due to technology, which in turn has produced a more efficient and effective audit. As technology continues to evolve, where will it take the audit profession?
If you are in need of an audit or would like to find out more about technology advances in relation to your audit, contact one of our Audit Specialists today on 03 9835 8200 or alternatively complete your details below and we’ll be in touch.