Clients are demanding more from auditors because they know machine processes are available to provide greater insights, the World Congress of Accountants (WCOA) learned.
Client demand is encouraging a push towards continuous audit and assurance, a panel discussion on “audit and the machines” heard at WCOA 2018, which took place in Sydney over four days in November.
Mark Edmonson, president and CEO of software company Inflo, told delegates that data analytics is unlocking new assurance opportunities for auditors who can show a deeper understanding and different view of clients’ businesses.
“Clients are saying: ‘Why are you telling me this once a year – and five months after I could do something with it?’”
Edmonson says this could lead to firms providing a different service for organisations that value an independent perspective from someone who really understands the business.
Challenges for auditors
Panelists and questioners debated how auditors could capture the extra value into their fees.
Bentleys Qld audit director Ashley Carle said clients were intrigued by new insights provided by analysis but the extra information may not help her sign the auditor’s opinion.
It was easy to “get lost for days in the data” and clients might appreciate it, but would they pay extra for the audit?
See CPA Australia’s full WCOA 2018 coverage here
Mark Mayberry, director and assurance officer of BDO, said such work solidified the relationship with the client and could lead to advisory opportunities.
Technology might speed the audit process and allow firms to spend less time on an audit but charge the same rate.
“The machines do not remove the ability for the auditor’s judgment,” Mayberry said.
“The robots are not going to take your job away.”
Audit and large firms
PwC Australia partner Kristin Stubbins, the firm’s innovation and disruption leader for assurance, said the technology wave was unstoppable. The most successful clients embraced volatility and disruption and were starting to automate their processes.
Related video: CPA Australia explores the highlights of the IAASB’s conversation on the future of audit at WCOA 2018. Watch now.
The big end of town was concerned about cyber risk and cloud processes, she noted, and there were challenges around implementing robotics at scale. She was seeing more businesses use blockchain ledgers in their supply chains.
Audit and smaller firms
Bentleys Qld is three years into its data analytics journey. According to Ashley Carle, the firm spent 18 months evaluating systems and the process would get delayed whenever a staff member went to a conference and came back with more information.
Her advice was to “just jump in”. “I think we have made leaps and bounds in the past 12 months.”
The firm had begun investigating technology in response to pressure on fees from clients and the difficulty of hiring experienced staff, and also wanted to add value to clients and its own work processes.
Carle emphasised that it was important to train and work with staff so they embraced the technology and were clear on expectations around it.
How data analytics is transforming the audit