Clients increasingly view the use of advanced technology as a differentiating factor when selecting their auditors, both in terms of how much people trust them and how much they're willing to pay for their services.
This is according to the second
However, the BDO report noted this is less about how much a firm will collect in fees and more about how technology is a proxy for perceived value overall. The figure means that finance leaders view technology as a differentiator worth rewarding when it demonstrably improves audit quality, transparency or efficiency.
The report also found, somewhat paradoxically, that while finance leaders were more willing to pay auditors who use advanced technology, a growing proportion believe that such technology can also lead to cost reductions, going from 29% last year to 46% this year.
Just as advanced technology is a differentiator, so too is its absence, but not in a good way. The BDO study found that clients notice when a firm's technology lags behind others, as 34% said limited use of advanced technology was one of the top reasons they would consider switching audit firms (behind poor project and deliverable management, at 36%).
"These findings underscore the growing expectation that audit firms not only keep pace with operational advancements but also proactively provide value by investing in tools that align with their clients' evolving needs," said the report.
AI governance
While the BDO report did not specifically define "advanced technology," it presumably includes some form of AI. The report found that AI governance and safety is a priority among organizations, but people can see room for improvement. The poll found that 43% of organizations have a formal AI governance framework, 37% rely on IT oversight, and 20% have no framework in place at all. This is in contrast to a previous study from risk management solutions provider AuditBoard, which found only 25% of organizations having fully implemented an AI governance program.
The BDO study suggested, though, that people's confidence in their AI governance may be dissolving as they become increasingly aware of what strong AI controls really mean. While 99% of respondents rated their finance and accounting data governance as somewhat mature or mature, the proportion of those describing it as mature declined from 55% to 46% between last year and this year.
For organizations that want to bolster their AI governance, BDO recommended that leaders clarify how AI is being used across core business processes, from detecting anomalies and transforming data to improving forecasting, compliance and decision support, and ensure there is a sufficient understanding of its scope and limitations; invest in training methods such as staff-led sessions, vendor showcases and self-paced modules to ensure effective adoption and risk mitigation; and, if a formal AI governance framework is not in place, prioritize its development to manage risks like bias, overreliance and inaccurate outputs.
