In today’s business landscape, audit automation has become increasingly vital. A recent study conducted by KPMG and Forbes Insights revealed that 98% of executives acknowledge the extensive use of advanced technology by external audit firms.
This article will focus on the concept of audit automation and its benefits for firms. By adopting cloud-based technologies and leveraging data analytics, auditors can streamline their workflow, enhance collaboration, strengthen data security, and gain valuable insights.
What is audit automation?
Audit automation refers to the use of cloud-based technologies to streamline the audit workflow. It enables auditors to work from any location and collaborate in real-time, ensuring secure access to audit data. By embracing cloud-based solutions, auditors can overcome challenges such as data collection and evolving standards.
With the aid of automation, tasks that were traditionally time-consuming and prone to errors can now be completed efficiently. From workpapers to analytics, cloud-based audit automation offers significant advantages, including enhanced productivity, improved data security, and the ability to harness data analytics for deeper insights into clients’ businesses.
Why is audit automation necessary?
Audit automation addresses inefficiencies caused by disparate applications, streamlining data collection and analysis. It overcomes challenges in aggregating financial data, ensuring a smoother auditing process. Moreover, outdated, on-premise solutions pose risks to data security and accuracy. Implementing audit automation is crucial for firms to enhance efficiency, gain insights, and mitigate risks effectively.
According to the Future Proofed study, executives expect several benefits of audit automation, such as improved data accuracy, deeper business insights, and real-time identification of risk factors and anomalies. This highlights their top-ranked expectations, including gaining insights into risk areas (90%) and benchmarking KPIs across processes and units (86%).
Benefits of audit automation
Audit automation offers three clear advantages that positively impact firms’ operations:
1. Real-time collaboration and increased productivity
Audit automation enables seamless collaboration among team members, enhancing productivity in multiple ways. Firstly, it facilitates a seamless flow of data, allowing real-time updates and eliminating delays associated with manual processes. Auditors have access to the most up-to-date information for analysis and decision-making.
Additionally, audit automation allows for simultaneous access, enabling teams to work concurrently on audits regardless of their geographical location. This capability streamlines the process, reduces time constraints, and enables efficient allocation of resources.
2. Enhanced security and data protection
Implementing audit automation comes with robust security measures and data protection mechanisms. Cloud technology adheres to strict security standards and undergoes regular audits. Data is stored and transmitted securely, protecting sensitive information from unauthorised access.
Transitioning from on-premise solutions to audit automation software also reduces the risk of data breaches and system vulnerabilities. Cloud technology employs advanced security protocols and encryption techniques, providing a secure environment for audit data.
3. Data analytics for valuable insights
Audit automation empowers auditors to gain valuable insights through sophisticated data analytics capabilities. Automated systems allow auditors to analyse complete data sets, identifying anomalies, outliers, and potential risks that may have otherwise gone unnoticed.
Furthermore, audit automation enables benchmarking of key performance indicators (KPIs) across various processes, business units, and industry peers. This comparative analysis provides valuable insights into performance trends, areas for improvement, and industry best practices.
Audit tasks that can be automated
Audit automation plays a crucial role in streamlining and improving the efficiency of various audit tasks. In audit engagement management, audit automation software serves as centralised hub for organising work papers and trial balances. This digital approach eliminates the need for manual document management and reporting, allowing auditors to access and update information in real-time.
Audit methodology can also benefit from automation. Customised audit programs can be created based on risk assessments, ensuring a targeted and efficient approach. Automation helps auditors stay up to date with regulatory changes, adapting their procedures accordingly.
Secure confirmations, a critical aspect of the audit process, can be greatly improved through automation. Traditional methods, prone to errors and delays, can be replaced with streamlined digital processes. Automated confirmations enhance data security, reducing the risk of unauthorised access and ensuring the integrity of information.
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The integration of technology enables auditors to focus on higher-value activities, such as data analysis and strategic insights, ultimately benefiting both the auditors and their clients.
If you’re interested in finding out more about the current trends within the accounting industry, be sure to take a look at what the INAA can do for you. You can discover the benefits of INAA membership here, or apply for your membership on our join us page.