The modern audit: Is your firm ready?
In my last column on audit, I gave an overview of how the cloud is transforming the sector, opening up opportunity to create better auditing engagements. If you think your firm might be ready to embrace this new way of working, it’s important to first dig deeper and ensure this is the case.
When we talk firm readiness, it’s also about readiness within the partner group. In many instances, the decision to move to a more modern way of audit gets derailed because all the key stakeholders aren’t fully bought-in. But if the partners are willing to go down the path and invest in it for the future, your firm might be more ready than you think.
The transition to a modern auditing practice doesn’t happen overnight, and more than anything requires a mindset shift that needs to happen before any real change is executed. So the question is: Does your firm have what it takes?
Investment in change management
What often stalls the transition to a modern, cloud-based auditing practice isn’t money, but a lack of investment in a change management process. Change management entails all the practices that your firm needs to undergo in order to correctly transfer your current infrastructure to the cloud.
Investing in a change management process will mean that you have a more insightful understanding of your business and the ability to oversee all of the changes taking place across the organization. Additionally, it facilitates your ability to measure the impact of change and also enables you to introduce them into the business without disrupting day-to-day operations. A change management process allows for increased innovation, ultimately resulting in a higher return on investment. It’s also important to appoint a ‘champion’ to oversee and project manage the plan to ensure its execution and follow-through.
The right technology
Investing in the right technology will be critical in setting your firm up for modern auditing. Leverage the opportunities offered by the cloud by investing in specialized cloud-based auditing applications such as Hubdoc and AuditFile that will automate the routine aspects of the auditing process.
There are many software providers that can help with this. Find the technology, such as AuditFile, that can provide a seamless, paperless audit system that enables your firm to maintain compliance, with all mandatory auditing requirements completed to a high standard. Technology such as Hubdoc automates administrative tasks including data entry and document collection so it is easier to audit remotely.
The accuracy and efficiency of these applications will streamline your compliance process, leaving you with more time. This additional time coupled with your specialist knowledge and skills will foster innovation and accelerate your firm’s trajectory of growth. It will also provide you with the opportunity to build meaningful relationships with your small-business clients.
A fundamental consideration in modern auditing is workflow. The way cloud technology could affect client relationships, physical location demands and employees should be examined thoroughly.
Cloud technology offers different ways to increase the agility and flexibility of workflow. Primarily, cloud migration enables greater flexibility for employees and also provides greater opportunity for hiring talent, with your talent pool no longer limited by geographical boundaries. But first, consider what tasks would have to be completed onsite with the client. Much of your work you could do remotely, but for the portion that needs to be performed physically onsite, you could potentially limit visits to one or two days, rather than weeks.
The mindset change
In a company, you can’t go into any type of change thinking you’re going to do things the same way you have before. With technology and everything else, you need to have a shift in mindset and be aware that your tried-and-true processes may no longer work, and you may have to reinvent some in order to take advantage of the power of the technology. Being open-minded about alternative methods and willing to pilot new technologies that may not be perfect from the outset is important. In the long run, you will be able to design more innovative solutions and your business models will become more dynamic as the technology grows with you.
While it will take time, adopting the cloud for auditing engagements offers immeasurable opportunity to innovate and improve your company’s scope. By approaching the transition with the right mindset, investing in change management, using the right technology and rethinking your workflows, you can get buy-in from the people that matter. Ultimately, you’ll be better equipped to compete and thrive in a highly competitive marketplace.