Technology and the future of audit
Did you now that four out of every five clients think that their auditor should use more sophisticated technologies for gathering data and undertaking their duties?
The auditing sector has been slow to adapt to change and many are still stuck in the stagnant past, unsure of which technologies they should adopt to facilitate their work. Whilst auditors still need to retain excellent knowledge, judgement, and professional scepticism, auditors that want to stay on top of the game need to be prepared to usher in a more transformational era of auditing.
As regulatory and compliance demands continue to increase, removing human judgement and instead focussing on a combination of expertise and digital tools is the best way to proceed. So what are some ways that technology is set to impact the future of audit?
Right now, over 2.5 quintillion bytes of data are created every single day and more and more businesses are waking up to the fact that harnessing this data offers immensely valuable benefits for business. The prevalence of this data and the fact that more and more businesses are realising its importance and utilising it, means that there is more information for auditors to sift through.
In addition to this, if auditors also harness the masses of data that a business creates, and then figure out how to gain better insights from it, they can offer a far superior service to their clients. In other words, the inclusion of large amounts of unstructured and non-financial data can be used to identify and control risks with much more insight and accuracy.
AI has the power to sift through vast amounts of data whilst performing digital analysis on it, in a way that humans could never imagine. By harnessing the power of algorithms that absorb information, reason, and think, large amounts of information can be processed with just the click of a button. The capabilities of AI in audit, far surpass any team of auditors and the results that are gained can provide invaluable insights to both the auditor and the business.
Auditors can use AI to essentially redesign their work to allow them to carry out a structured analysis of data that would not have been possible a few years ago.
As the name suggests, predictive analytics involves using data sets and advanced data analysis to make probability-based predictions about the future. In the context of audit, auditors can use digital tools to extract information from a company’s system, and then use predictive analytics to help identify patterns that either do or do not align with anticipated outcomes. This type of technology can be very useful in gaining insight into clients’ financial and business risks. Auditors can also use client data, combined with market and industry data to allow a deeper understanding of the state of the business.
At BDO Malta we are always seeking to redefine our audit approach by making the best of new and innovative technologies. With our finger on the pulse, we have a clear vision on how to retain our position as respected, ethical, and forward thinking audit service providers. By utilising these technologies, and more as they become available we aim to increase the level of service we provide, as well as its efficiency and the overall satisfaction of our client base.
Learn More about BDO's Technology Advisory Services here.