Future Innovation in the Audit Process
In recent years, the profession, including the audit industry has come under the spotlight for being in danger of losing its most vital asset – trust.
Michael Izza, CEO of the Institute of Chartered Accountants in England and Wales (ICAEW) noted that a “continual cycle of high-profile corporate failures” has produced a “palpable crisis in public trust” in the profession, and “fundamental change” is required for it to be regained.
While a variety of changes need to be implemented to ensure trust is instilled again, and various reviews are currently underway to bring these about, a key driver for improvement comes in the form of harnessing the power of technology including data analytics.
Accountancy Age recently covered a blog which looked at how technology is advancing the process of audit and how audit of the future needs to incorporate technology in what is fundamentally a three-step process: extraction of the data; performing analytics on the data; and investigation of exceptions.
In comparison to historical data extraction techniques, which would select a relatively small sample, an auditor can now access a client’s entire system, and sort and analyse 100 per cent of its transactions for a certain data set. Where there are anomalies or exceptions the programme will identify these and provide the auditor with a report for further investigation.