Technology is transforming the accountancy profession, and has the potential to revolutionise audit.
What are the drivers for technological change in audit?
It is not only the increase in volume of data, but also the changes in business models which lead to disruption and ultimately innovation in the way of working in markets and new sources of value.
Tomorrow’s auditors will need to be technologically savvy to service businesses and to execute high quality audits. In this latest report, ACCA and CA ANZ have provided an overview of some of the various technologies which are likely to affect the audit profession in the near future.
The technologies mentioned include data analytics, distributed ledger technology (DLT), robotic process automation (RPA), drone technology, machine learning (ML), amongst others. Reference is also made to smart contracts and cloud technologies.
"Communication skills will be among the most important competencies across specialist areas, and have been identified In ACCA’s research as an area where there is a large skills gap"
Auditors will have to continue adapting to the changes in business models and understand the various technologies used by businesses.
The conclusions in this report were supported by panel discussions held in Greece, the Czech Republic, and Slovakia, with panellists representing audit practice, audit regulators and clients, along with technology experts. The report is also backed up by interviews with audit practitioners and technology experts in the audit profession.
Technology offers the ability to both improve the quality of audit and to add value to it: audit is moving from being a reactive, backward-looking exercise to a proactive, predictive, forward-looking one, working in real time. And as such, it provides an opportunity to help businesses by providing timely insights.
Advances in technology raise many questions about the future of audit, a number of which reflect some long-standing tensions.
Technology offers the ability both to improve the quality of audit and to add value to it: audit is moving from being a reactive, backward-looking exercise to a proactive, predictive, forward-looking one, working in real time. As such, it provides an opportunity to help clients by providing timely insights.
Nonetheless, if AI and related technologies are fully implemented, it could raise questions about the auditor’s independence. ‘A quality audit requires the auditor to maintain independence at all times when performing the audit. At the same time, audit quality is enhanced by the closeness to an audited entity that is acquired through repeated involvement in the engagement.’ (Tenets of a quality audit, 2018)
"Technology only helps with the visualisation of a problem – people then need to analyse what is typical and non-typical."Dalimil Draganovsky, Head of Assurance, EY Slovakia
1. Auditors need to adapt to the changes in business models.
2. Among the available technologies, data analytics is currently the most mature and is currently used by most firms.
3. The audit profession is still at a very early stage with AI and has not embedded it as deeply as it could.
4. The human relationship between client and auditor remains important: not everything can be replaced by technology.
5. Auditors will need to be more adaptable to change in future.