Technology has improved the audit process, but human experience is still vital

Audit, like so many industries, has been revolutionised by changes in working practices which gathered pace during the Covid-19 pandemic.

Right up until the start of 2020, many firms were auditing primarily face-to-face, often spending weeks at a company’s site.

Lockdown meant communication needed to take place via Zoom or Teams and tried and tested processes were no longer effective, necessitating confidence in going about the process in a different way. The increase in adoption of more powerful technology across the industry has largely snowballed from there.

As auditors and clients began to see first-hand how technology could improve the audit process, they began to consider more closely how else it could improve accuracy, reduce risk and make the audit process more efficient.

Ever more stringent audit standards designed to challenge audit firms to refocus on and enhance the quality of work have served to increase the importance of audit firms freeing up staff to focus on more complex matters, and will continue to do so going forward, meaning those firms who don’t embed technology in their audit processes will be left behind.

Improving the audit process

Automated audit systems such as Inflo are now becoming the norm for many firms, and software such as Datasnipper vastly reduces the time spent manually extracting data, enabling auditors to refocus their efforts into more thought-intensive areas of the audit.

Whereas in the past, the laborious process of obtaining bank confirmations by post could delay an audit, systems such as Circit enable swifter access to more comprehensive data than could ever be provided on a bank letter.

Sensitive financial documents are now uploaded via secure platforms, rather than copies being physically carried round or sent via email. This vastly reduces the risk that confidential information is lost or accidentally sent to the wrong person.

Auditors can also better interrogate data by using software which sets parameters for what is considered normal, flagging up anything outside of this as suspicious, which wouldn’t be apparent to the naked eye.

For example, if all except for one journal in an accounting system has been uploaded during normal working hours, the outlier having been uploaded at midnight on a Saturday, auditors will be notified of this anomaly and can use their judgement as to whether this is a cause for concern.

In addition, data visualisation tools can enable auditors to challenge management assumptions and assertions, or to spot trends or unusual relationships in data that otherwise would be imperceptible.

New talent in the industry

The exciting part is where technology can take us from here in raising audit quality and ensuring public faith and trust in audit is safeguarded in the years to come.

Technology can be effectively utilised for far more than just the routine areas of an audit and can massively enhance audit quality – our challenge is to map out how this is to be achieved, revisiting it as the environment in which businesses operate continues to change.

In years gone by, the first few months of a training contract would be synonymous with some frankly rather monotonous routines - increased automation will allow junior members of staff to build their exposure to more challenging and subjective areas of the role faster, making audit a more exciting prospect for talented new entrants.

It is these new entrants to the industry who can be the flag bearers for future technological growth, as they are often highly digitally aware and confident with new technology. Their knowledge of tech, coupled with the years of audit experience enjoyed by those of us who have been in the industry longer, is a formidable combination capable of amplifying audit work for years to come.

Professional scepticism

The industry has a responsibility to use available technology to give our clients the best service possible, but that cannot be done through new systems and software alone.

When auditing a company, if something doesn’t feel right, usually it isn’t – despite what technological aids might indicate. Therefore we must properly harness technology and utilise it to improve the audit process, as well as the quality of audit work.

As an industry, by combining our human expertise with the advantages that technology gives us, we carve a truly exciting and innovative future for the audit profession.