- Report reveals how technology is transforming audit and practitioners need to make a skill shift
- Auditing is moving from a historical exercise to delivering forward-looking insights
- Data analytics is the most mature of the new technologies
Technology is transforming the audit process, driving changes in business models and demanding a more proactive and forward-looking approach from practitioners.
For those in the audit profession, these changes require a significant skill shift. The successful auditors of today – and tomorrow – need a sound technological understanding to enable them to continue servicing clients and executing high-quality audits.
These are the key findings of a new research report Audit and Technology, commissioned by Chartered Accountants Australia and New Zealand (CA ANZ) in collaboration with ACCA, which focusses on the implications of new technology on the audit profession as we know it.
Exploring the views of leading practitioners, the report provides an understanding of how the changing business environment is shaping technological change in auditing.
"If we can anticipate the possible impacts of technology and harness it so we understand the benefits to the accounting profession, technological change could then be such an empowering opportunity rather than a challenge for our profession," said Simon Grant, Group Executive Advocacy and Professional Standing for CA ANZ.
As the adoption of technologies gain momentum, they have the ability to transform the audit profession from reactive and backward-looking into a proactive and constant source of insights, with the auditor as custodian and interpreter of the underlying data.
It's not only top tier accounting firms accessing this technology, it is becoming increasingly affordable for small and medium-sized practices.
“If we can anticipate the possible impacts of technology and harness it so we understand the benefits to the accounting profession, technological change could then be such an empowering opportunity rather than a challenge for our profession,”
More than 90% of the world's data is estimated to have been generated since 2016, and significant amounts of it are financial. This means auditors need the latest technological tools to analyse higher volumes of data than ever before. The most immediate impact of technology will be automation and the elimination of manual and routine tasks.
The shift to cloud-based accounting systems and the standardisation of processes has made data more widely available, easier to move, easier to manipulate and analyse, and less prone to corruption and errors.
And while robotic process automation can remove the need for manual intervention, there is still little appetite for the 'human-free' audit because while this can remove errors and spot patterns, humans are still needed for their communication skills, judgement, professional scepticism and empathy.
While harnessing technology, practitioners should not lose sight of the fact that the human aspect remains important, and that the time technology saves can be invested in client relationships.
In the face of these exploding technologies, audit remains at its heart a very human activity.
The report also explores the public expectations of the audit profession, further to our recent research on what the public wants from audit – which showed strong public support for the role of auditors to be expanded into areas such as the prevention of corporate collapses. Also in that survey we asked how technology might affect the audit process, the most popular response was that respondents believed it will make audits more efficient. Technology is seen as an enabler. In that evolution, technology has a key role to play in developing the skills of the profession.