Digital auditing and the virtuous cycle
19 October 2021
Accounting firms are in an ongoing battle to attract the best talent, and the best talent understandably gravitates to firms that are forward looking, innovative and have a work culture where they can learn and progress rapidly.
One major differentiator in the talent race which has emerged in recent years in firms outside of the Big Four has been the adoption of cloud based auditing technology, such as the Inflo solution.
This technology is transforming audit through automating the tick and bash work which has traditionally been the job of younger staff, and given them the opportunity to use their creative skills to deliver insights to clients at a much earlier point in their careers.
Auditors don’t need to be data scientists, but the generation of digital natives which is joining the accounting profession has an intuitive understanding of these data tools, and readily embrace and adapt to this change.
It’s much easier for them to move from their smartphones to the digital audit, than from their smartphones back to paper and spreadsheets.
A combination of clean data integration and analysis, all delivered through an intuitive user experience in visualization tools, has shifted auditing up a gear and made it an easier and more enjoyable experience for accountants, and at the same time is delivering better quality audits to clients.
Historically, auditors would do statistical sampling on a small number of transactions, but the new technology allows the auditor to extract 100% of the client’s data from whatever accounting software they are using and take it into an analytical tool for a comprehensive analysis.
The new tools are comprehensive in their ability to capture data, and this helps auditors readily understand trends and patterns they wouldn’t have been able to see using more limited statistical sampling.
Accountants can now hone in on anomalies and anything that looks unusual, prompting new discussions with clients which can potentially lead to further investigation in areas from a cyber review to cash flow analysis.
For clients, the new tools can give them greater trust and confidence in the outputs, and makes for a more collaborative working approach with auditors.
Many clients see the benefits of the technology immediately. For example, they can see unusual journal entries identified across all transactions, or a breakdown in controls.
Other tools comprehensively reconcile journal entries, and enable auditors and clients to see if revenue is flowing through the business as it should, helping to identify mistakes and leakages.
For the accounting firm, this technology is readily accessible and at whatever scale they need for the work in hand and is comparatively simple to implement.
Instead of spending tens of millions in capital expenditure, as the Big Four have, mid tier firms can access these cloud based tools as a service and start using them immediately, without any in-house development.
What is required is a leadership commitment in the firm, a culture which embraces change and a focus on adequately trained staff to use the tools.
At Crowe, we have appointed a number of Inflo champions across the business who are first adopters.
They have led a number of pilot engagements and helped other staff get up to speed with the technology so it can then be rolled out on a more systematic basis.
Assisting the adoption are drop in training sessions where staff can learn more and develop their skills.
All this is creating a culture of innovation and change which staff at all levels are buying into, and not only is this upskilling our people, but it is making our firm a more attractive option for new talent.
From this flows our ability to deliver better quality work to our clients, adding value to our business and to theirs.
Audit firms embracing the digital audit are being rewarded at all levels, internal and external, in what has become a virtuous cycle of improvement.
The positive change it brings to culture and capability are translating into a better service which clients value, and is becoming an important factor in their decisions on which auditing firms they engage.
Want to hear more from Barbara?
You can watch a recorded webcast for the Inflo’s Future Firm Series Part 2: Building digital capability in your audit function. You will discover the capability requirements that partner with digital audit technology and help gain a competitive edge for retaining talent for your firm.