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 allowing auditors to identify better financial reporting, fraud, and operational business risks and tailor their approach to deliver a more relevant audit.
What is auditing?
An audit is examining an organisation's financial report - 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
- Notes comprising a summary of significant accounting policies and other explanatory notes
How can technology transform audits today?
The combination of big data, advanced analytics, and visualisation technologies deliver audit and business insights that impact how 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.
Analytics is changing both
- The way we conduct our audits
- 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—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, involves a lot of judgement. A lot of data scanning/ entry is being done by machines, but we are still far from speaking to "Jarvis" who can pass accounting entries without human intervention. A human is still required to prepare data in standardised sets and upload it.
Audit firms are increasingly using technology to improve audit procedures. As a result, we are witnessing a tectonic shift in accounting, which a host of cutting-edge technologies powers.
However, the 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 available today come packed with flexible payment tenor and unsecured lending, making them the ideal financing solution for audit firms of all sizes.
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