4 Ways Analytics Software Can Supercharge Your Audit
Auditors continue to face challenges when it comes to securing new business and growing revenues. The landscape has become increasingly competitive and audit firms are now expected to pitch for new business opportunities with cost being the primary opportunity to differentiate.
Client expectations are also changing as they now expect more value from the audit service. At the same time, auditors are trying to increase their profit margins in what has traditionally been a detailed and time-consuming process.
There is now an emerging trend of departments employing audit analytics software, both for internal and external audits. These solutions not only take care of the transactional groundwork that junior auditors would normally complete, but they also provide insights by mining the massive amount of data available.
So, how can analytics software dramatically improve your auditing efforts?
1. Visualizing your data
Rather than looking at reams of numbers and transactions, visualisation can make it easier for auditors to interpret information, identifying and presenting relationships and points of weakness to their clients in a digestible format. The insights and relationships previously missed by the human eye can elevate the auditor to a more consultative role.
2. Data interrogation techniques
When identifying fraud within a business, it’s important to uncover any points of weakness in internal controls. Audit analytics software can take this one step further by allowing auditors to dive deeper into trends or unusual data sets surrounding any specific weak areas.
3. Client and team collaboration tools
The collaboration techniques employed by Dropbox and WhatsApp are embedded within the audit software and allow documents and information to be shared at the same time. However, collaboration isn’t just about sharing documents; it’s the auditor’s commentary around those documents in a secure environment that provides an audit trail for the full process and reduces the risk of error.
4. Streamlined processes and improved accuracy
Using artificial intelligence (AI) within the audit software can highlight more information to the auditor and help make the audit process more robust and efficient, without the manual number-crunching. It also provides a more rounded audit, with truly random samplings of transactions and flagging of anomalous results to allow further investigation and assessment.
The Rise of Data Analysis Skills
However, while the technology is available to help firms transform their audit processes, the skills of the auditors themselves, particularly at the junior level, are likely to change. It is up to the auditor to draw insights and conclusions from the evidence and anomalies, and data analysis skills are becoming more important than being able to complete the traditional ‘grunt-work’ at the entry level.
The judgment of a skilled auditor remains critical to understanding where a false positive may occur in the data, as well as using the right interrogation techniques to apply to points of weakness. The firms that have the edge over their competitors, and are therefore able to better meet the demands of their clients, are those that employ the latest technology – and challenge their employees to use it to the best of their ability.
To learn more about how data analytics can transform your audit process, explore the capabilities of IDEA Data Analysis Software.