While cloud services are great for personal photo sharing and music streaming, there’s no way it can be effective for your firm’s audit team, right? Wrong. All too often, the cloud is overlooked for groups working with highly-regulated and sensitive data, but the reality is that it can provide enormous gains in terms of efficiency, productivity and security.
In a KPMG survey of 800 technology leaders, cloud technology is ranked as having the greatest impact in driving business transformation for enterprises; and 49 percent of respondents said that the cloud is the top way businesses will drive cost efficiencies. The same holds true for accounting firms, even when it comes to audit activities. According to the Journal of Accountancy’s MAP Survey, the use of cloud-based systems increased 66 percent in just two years and is used by 59 percent and 77 percent of firms with $5-10 million and $10 million+ revenue, respectively. And there’s no doubt that number is on the rise.
Today, the reality of audit practices relying on an outdated, on-premise solution to house and manipulate data brings with it major weaknesses. Here we take a look at these weaknesses and how the cloud can provide strength in these areas.
Weakness 1: Synchronization and single-user trial balance kills productivity and collaboration—and prevents real-time review.
How the cloud provides strength: With the cloud, there is no more check-out/sync or back-up/restore—all audit data is accessed seamlessly and in real time. With sophisticated, multi-user content, trial balance, engagement management, and document retention management, the entire audit team has up-to-the-minute access to the entire engagement, from any location, without having to transfer, backup, restore or refresh the audit files.
Weakness 2: Security risks have increased due to the wide range of laptops, tablets, and other electronic devices used in firms.
How the cloud provides strength: While many still consider cloud-based services to be less secure than on-premise offerings, consider these facts—cloud businesses must adhere to strict standards and independent audits, known as SOC2 engagements; and because their reputation (and revenue) depends on the security of their services, cloud providers put serious effort and attention to maintaining these security standards.
Further, the cloud enhances security and control over sensitive data by keeping it off of laptops, which are actually the least secure option. According to Alert Logic’s 2012 State of Cloud Security Report, on-premise environments actually suffered more security-related incidents than cloud environments, with on-premise users experiencing an average of 61.4 attacks and cloud users averaging only 27.8. As expected, on-premise users also suffered considerably more physically forceful attacks (i.e., break-ins, etc.) compared to their cloud-based counterparts.
If your technology provider offers cloud services, they should deploy state-of-the-art technology behind strong physical security to ensure that only you have access to your data. Further, they should maintain redundant back-ups of your data, which can be accessed in case of a disaster situation.
Weakness 3: Multi-location audits and/or remote staff are difficult to configure and manage.
How the cloud provides strength: With the cloud, audit teams can access data from across the globe, making it easy to coordinate fieldwork and review processes across multiple locations and allowing remote staff to collaborate in real time. Multi-location audits no longer present a coordination issue because all staff can access the live data simultaneously.
Weakness 4: Version control capabilities are lacking and can cause confusion and rework.
How the cloud provides strength: With the cloud, web-based audit engagement management features eliminate version control issues by eliminating checked out copies and backups so staff, managers and partners will never have to worry about whether they have the latest version of a document. Further, partners and managers can review work from the office, as it is completed. There’s no need to wait for someone to sync work back to the office servers.
Weakness 5: Manual software updates and server maintenance are a significant IT burden.
How the cloud provides strength: Using the cloud, your firm eliminates the need for software updates, manual backups and server maintenance. Your data and applications are always updated, always secure. All you need to do is log in to a web browser and go to work.
By using the cloud, your engagements, workpapers, software updates and colleagues are available in real time with just a click—whether you’re in the office, in the field or anywhere else. With the ability to remove geographical barriers, easily share information, and significantly reduce your IT burden, isn’t it time you took your audit practice to the cloud?
[IMGCAP(1)]Cheryl Stydnicki is senior director in product management for the audit and accounting segment with Thomson Reuters Checkpoint within the tax & accounting business of Thomson Reuters. Working closely with editorial and development, Cheryl is responsible for managing go-to-market strategy, and ensuring firms successfully implement PPC’s SMART Practice Aids audit solution to the most efficient use in their practice. Cheryl has 18 years of experience with Thomson Reuters in the area of product management and account management, and she also has many previous years of experience with a regional CPA firm.
[IMGCAP(2)] Melissa A. Yard is product manager for the audit and accounting segment with Thomson Reuters Checkpoint within the tax and accounting business of Thomson Reuters. Melissa attended Michigan State University where she earned B.S. in accounting with summa cum laude distinction. Prior to joining Thomson Reuters, Melissa practiced in the audit division of Deloitte Touche Tohmatsu.
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