A significant proportion of firms have yet to implement new audit technologies and methods, citing poor training, lack of quality data, lack of systems access and lack of funds as the primary reasons.
This is according to
For example, while AI, automation and analytics are often cited as essential for the modern audit practice, they are far from universal among audit firms. The survey found that one third of audit firms say they do not use AI in any form; similarly, 22% said their practice uses zero automated solutions; and a whopping 89% of firms say they are not leveraging technology to enable substantial analytics in audits.
"Despite the progress made in migrating to the cloud and AI adoption, many firms reported some degree of hesitancy toward technology. Much of this hesitancy stems from poor experiences with technology and unmet expectations. Firms reported negative experiences such as poorly designed interfaces, difficulty of use, high costs and lack of staff efficiency. They also highlighted poor integration with other technologies, resulting in redundant processes," said the report.
While the 22% saying they use no automated solutions at all may at first seem unintuitive (it's unlikely they're sending people to manually scan every single invoice, for example), Emily Remington, director of audit professional services with
"Most firms have successfully digitized—they have moved from physical paper to PDFs and Excel spreadsheets. However, if an auditor is manually typing data from a bank statement into Excel, or dragging a PDF from an email into a folder, that process is digital, but it is not automated. In the context of this survey, 'automation' implies a connected workflow where data flows from one system to another without human intervention (e.g., an API pulling bank data directly into the trial balance). The 22% statistic highlights a large segment of the market that is working on computers, but still relying on disconnected, manual data entry processes. They aren't using paper, but they are still doing 'paper-based' work on a screen," she said.
At the same time, the report noted that firms which have embraced new technologies report increased audit quality, higher client satisfaction, and more efficient audits. Those who use AI regularly also report a number of common use cases that help them in research, in writing and document analysis, and in data analysis.
Similarly, the report finds that many firms have not updated their audit methodologies to reflect the changing business landscape, particularly where it concerns shifting to a risk-driven audit approach using data analytics and incorporating roles beyond traditional accounting backgrounds. This isn't to say they wouldn't want to improve things if they could: nearly 20% of firms expressed interest in improving or streamlining their audit approach. But their chief concern is the time and cost of training staff and corresponding change management. As well, however, firms mentioned not having enough documentation, not having enough time for planning, the increased need for higher level staff involvement, as well as client pushback.
Instead, many firms rely on audit methodologies that are years, or perhaps decades, old. The survey found that 24% of firms have been using the same audit methodology for more than 20 years, 13% said they have used the same methodology for 16-20 years, and 31% said they have used the same methodology for 7-15 years. Overall there seems to be a great deal of resistance to changing audit methodology, with the report noting that 75% have not formally documented a transformation plan.
The survey also found that 30% of firms said their specific audit methodology does not enable transformation, even if they wanted to implement it. Remington said that, historically, audit methodology has been synonymous with a linear, form-driven process—essentially a digital checklist where an auditor completes step A to unlock step B. What stands in the way of transformation, she continued, is that these traditional methodologies are rigid; they prescribe exactly what to do (e.g., 'sample 25 items') rather than allowing for the flexibility required by modern tools (e.g., 'analyze 100% of the dataset for anomalies').
"When respondents say staff aren't trained in 'advanced methodologies,' they usually mean their teams are excellent at following the standard checklist (Compliance), but they lack the training to design a risk-based approach that leverages data analytics and critical thinking (data-driven The methodology blocks transformation because it prioritizes 'filling out the form' over 'analyzing the risk'," she said.
Regarding technology, the report said firms need to formalize and document a transformation plan, and invest in a holistic, intentional technology strategy.
On methodology transformation,
"The future of audit isn't coming — it has arrived. Embracing technology on the path to audit transformation is not merely an option for firms, but a crucial imperative for remaining relevant, enhancing audit quality, and delivering exceptional value in a dynamic and rapidly evolving marketplace," said Emily Remington, director of audit product management with
The report also examined anticipated growth strategies at audit firms. The vast majority, 74%, said they plan to increase fees, 65% said they intend to pursue targeted organic growth by industry, 48% said they'd do so without industry focus, 44% said they'd take on more clients, 33% said they'd add technology to increase capacity, and 20% said they plan to pursue growth through acquisitions.
