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How technology is transforming audit today

  • Highlights

  • Audit-meaning and scope

  • How audit is transforming technology

  • Technology cannot completely replace humans

  • Financing options making technology available to CA firms

Technological advances are a game changer for audit. Big data and analytics are enabling auditors to assess ever-increasing volumes of data. This is changing the nature of audit by enabling auditors to better identify financial reporting, fraud and operational business risks and tailor their approach to deliver a more relevant audit.

What is auditing?

An audit is the examination of the financial report of an organisation - as presented in the annual report - by someone independent of that organisation. The financial report includes a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and notes comprising a summary of significant accounting policies and other explanatory notes.

How technology can transform audit today?

The combination of big data, advanced analytics and visualisation technologies are delivering audit and business insights that impact the way an audit is planned, executed and delivered. For example, instead of testing a sample of revenue transactions to assess the appropriateness of revenue recognition, an auditor can now analyse all revenue and contra-revenue transactions to identify inconsistencies across the business or anomalies with specific customers or business units.

Additional read: Best GST software for CAs to invest in

Data analytics

Analytics is changing both
- the way we conduct our audits and
- What those audits deliver.
It allows us to extract and analyse ever-larger data sets and meaningfully present that data visually to our clients. In short, we’re simplifying the audit through innovation.

Cognitive Technology

Cognitive technology—also known as artificial intelligence—can go through a vast amount of data faster and more precisely than any person. It can also determine loopholes in a company’s practices. And it can point out where and how systems, operations, processes and controls can be improved.

Can technology replace humans?

Accounting as well as auditing involve a lot of judgement. A lot of data scanning / data entry is being done by machines, but we are still far away from being able to speak to “Jarvis” that can pass accounting entries without human intervention. A human is still required to prepare data in standardized sets and upload.
Audit firms are increasingly using technology to improve audit procedures. We are currently witnessing a tectonic shift in the field of accounting which is powered by a host of cutting edge technologies.

However, battle to make such technologies accessible on a wide scale is waged by the advent of a host of ingeniously designed lending products. New options such as CA loans which are available today, comes packed with features like flexible payment tenor and unsecured lending, which makes them the ideal financing solution for audit firms of all sizes.

Additional read: Top accounting software for CAs in India

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