The Future of Audit

Considerations for auditors ready to go virtual

The future of accounting is taking advantage of technology disruption to eliminate the site visit and go virtual. Today, audit fees are increasingly competitive and commoditized. However, with innovations in technology like artificial intelligence and machine learning, professionals can now automate processes like never before by differentiating your service offerings.

As intimidating as it may seem, there are steps you can take to make moving to a fully automated process seamless and cost-effective over time.

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Benefits of cloud software

A report from cybersecurity giant McAfee found that 97 percent of organizations use cloud-based software in some capacity. That statistic indicates that you’re probably using the cloud already, even if you don’t know what it is. The question, then, is whether you’re taking full advantage of it. Cloud-based data is accessible from any device and allows for easier collaboration between team members and better communication with clients.

Clients have come to expect a different level of responsiveness, so it’s important you can demonstrate that you’re using the most up-to-date technology. Many times I find that cloud software gets confused with desktop software that is hosted. There is a difference.

Cloud software is written in the cloud; it is not a desktop product that is hosted on the internet. Although you are accessing it through the cloud, you will lose the benefits of true cloud software with the latest technological developments such as artificial intelligence, machine learning, and taking full advantage of third-party applications that will integrate with your general ledger system to automate data-heavy processes.


Automating the workflow

There are a myriad of areas in the workflow where transactions are recorded. It could be a point-of-sale system, it could be an employee clocking in for their shift, it could be accounts payable, expense reporting, or your workpapers.

As you automate each task, it allows you to create a new process to automate one more task remotely, rather than physically being at a client location. Automating one process at a time can save hours each month because it eliminates the need to manually enter or manipulate the information, or request documents.

If you are able to keep the data in a central place, residing in the software being utilized, the majority of the backup information you need to audit a client should be readily available to you.

“Having machines to do all these tedious and repetitive tasks could sound scary for many accountants because they are also very time-consuming and thus very lucrative,” explained Stephanie Weil, CEO of Accounteam, in Forbes. “However, if the AI system is well configured,” she wrote, “it can eliminate accounting errors that are generally hard to find and thereby reduce our liability and allow us to move to a more advisory role.”


Taking the first step

When considering the road to workflow automation, it’s wise to think of one common process at a time. You risk over-complicating your workflow and overwhelming your staff by trying to automate everything at once. Try taking the most cumbersome manual process that will give you the largest return on investment and moving it to a virtual system first.

For example, if automating the confirmation process would save you the most time each month, you can use a tool like Confirmation.com to get ahead of the game and connect it to your general ledger, rather than sending paper confirms. Additionally, you may find driving or traveling to clients wastes time when you can do most of the work virtually and be able to get to more clients in a day. To ensure you still maintain a human connection, using video chat technologies such as Zoom, Google Hangouts or Webex are a great alternative to physically going to a client location. This still provides a personal touch even if you are not physically in an office. Drones are already transforming the way inventory is assessed and have been found to be even more accurate than a person doing the physical inventory count.

Decide where you want to begin by mapping each part of your standard business processes and determine one or two areas to begin with this year. As you test them and begin to implement them into the standard processes, then you can set the next one or two areas you want to attack next.


Boost efficiency and save time

Take continuous audit, for example. Automation can help auditors use technology to validate data as it occurs in real time by making the audit ongoing, and by automatically generating sampling throughout the year and updating workpapers. The flow of data becomes year-round, continuous, and has big benefits to time savings and profitability by reducing those non-value-added tasks during crunch time.

Continuous audit reimagines the workflow and can spot trends or missing data before a year-end audit. Continuous audit spreads the work evenly throughout the year and increases accuracy, as well as streamlining the workload for your firm’s staff.

Auditors have more time to offer valuable opinions and feedback throughout the year that would differentiate your audit from your competitors. As the searchable data is broadened to other sources such as contracts and emails, which creates a wider picture of a client’s business activity, you can catch issues as they arise, before it is too late.


The human impact

Adopting an increasingly automated workflow, you can take on a more advisory role with clients and dedicate more time to your team culture.

Many times, as auditors, your team is out in the field, at the mercy of the corporate culture they step into. Instead, if you can keep more of your staff together, better relationships can be established internally since your staff will be able to spend more time together.

If you can create an environment of collaboration and teamwork, you may find that you are able to keep staff longer and create a greater sense of happiness in the work they do.

If the future of audit moves virtual, it’s vital for firms to start building a culture that fosters togetherness, collaboration and virtual communication channels as a result.

Great team leaders properly engage with their team members and clients. They understand what they need, their strengths, weaknesses and challenges, because they create time to continually check in and connect with each and every team member. As you are implementing technology, be sure to think about the human side of the implementation, as well as creating a positive work environment for the future.

As automation boosts efficiency, saves time, and changes workflow processes, your firm can focus on adding the most value to your clients and one another.

This article is part of an occasional series exploring the evolving landscape of the audit and the auditing profession. Other installments include:
"Looking ahead in a time of rapid change," by Susan Coffee of the AICPA
"The enduring importance of professional skepticism," by Sara Lord of RSM US
"Dialogue with academics and students is critical," by Cindy Fornelli of the Center for Audit Quality
"Where is the audit profession going?" by Mervyn King of the IIRC

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