Digital transformation is on every business’s agenda, and the auditing profession is no exception. In fact, I would argue that it is particularly important for auditing given the huge challenges the profession—and its clients—face.
The regulatory requirements, the complexity of the global business environment, overall economic volatility and the digitalisation of businesses, have all created a uniquely challenging business environment, and one that’s particular difficult to audit using the traditional audit approach.
The emergence of digital auditing programmes and platforms, and significant advances in artificial intelligence (AI), are showing how auditors can improve the value of what they do for clients not just in the audit space but also in assisting better, more data-driven business decisions.
Smart use of technology is helping audit firms to automate many of the repetitive processes that are involved in an audit.
At the same time, automation enhances the quality of the financial data because it eliminates manual data re-entry, a major cause of errors— garbage in, garbage out is of particular relevance in a digital world.
Digitalisation permits the audit to be carried out more rapidly and accurately, and also makes the process easier for the client, who can share much of the necessary information digitally.
The utilisation of Business Intelligence (BI) and Robotics tools to audit routine audit processes and attributes, can now ensure that our audit approach is fit for purpose for clients unique, evolving environment.
Digital platforms ensure that data is both protected and available to the whole team, leveraging the power of collaboration, overall enhancing the trust and credibility between clients and their auditors.
As is the case with business more generally, the removal of time-consuming rote work can be seen as a way for auditors to reduce headcount, but this is short-term thinking. Rather, it should be exploited as an opportunity to improve working conditions for people with scarce skills, and so improve engagement and retention.
The newly freed-up time will also enable these skilled auditors to perform deeper analysis of financial information, making the results both more insightful and accurate to drive value-added data-driven decision making, but also more valuable for the client itself.
This can certainly have a positive impact on audit teams’ level of job satisfaction, due to performing more purpose-driven work.
A critical skill of an auditor is the ability to apply a high level of professional judgment encompassing both business and digital acumen with an overarching focus on the ethical implications surrounding that. Trust becomes even more important when one is required to leverage technology – and we believe that it cannot replace the need for professional experts.
However, it does require us to enhance our expertise to further analyse and verify the outputs being produced by such tools.
Business benefits for clients can be substantial
As noted above, a big benefit for clients is the seamless integration between the financial audit and IT audit teams. This can result in minimal disruption in their business operations as information is shared on secured digital platforms In addition, because the collaboration happens on a single platform, the process is much more transparent and it is easy to monitor progress and hold each other accountable.
The time invested by audit staff can be channelled to improving their critical thinking ability linked to the valuable analysis of business trends.
Digitalisation truly enables the auditors to mine the client’s data for valuable insights. Overall, the quality and scope of reporting by the auditors is dramatically enhanced, due to identified risks supported by data that has been interrogated, verified, and understood.
This supports clients in being able to respond to relevant risks that contribute towards sustainable business practises in an ever-evolving world being transformed by technology.
In the era of the digital revolution, data has emerged as a crucial asset, akin to gold, for businesses and various organisations. To fully harness the advantages of this data, it is essential for service providers within these organisations to undergo digital transformation.
This step will not only optimise their services but also facilitate seamless digital interactions with their clients. The imperative for auditors is even greater. They are expected to leverage data not just for scrutinising financial information, but to extract meaningful insights that provide significant value to their clients.
However, there are certainly challenges that exist. These include a lack of education and knowledge around the utilisation of such tools. Audit firms have a responsibility to provide sufficient training to staff as technology continues to evolve to ensure that the automation process is optimal.
We have the responsibility to consider the ethical implications of digitalisation and how it may impact client data privacy and confidentiality and ensure that our teams are trained on how to use these tools responsibly.
Another challenge we face is the lack of education for upcoming young professionals which can leave many students being unprepared for this demanding industry which we operate in.
With these technological disruptions, professional bodies, firms, and tertiary institutions have the opportunity to work together in a collaborative and transparent manner, to support the development of the future generation and ensure the sustainability our profession.
Now is the time to turn these challenges into opportunities and truly transform the dynamic of our profession.
By Rochelle Murugan, Partner at Mazars in South Africa