Technology has been transforming innumerable sectors. After years of reliance on manual statistical methods like random sampling, financial audit can be considered to be the latest addition to this list. As per Forbes Insights survey, 58 percent of respondents believe that technology will have the biggest impact on audits over the next three to five years.
Some of the audit firms have already recognised and integrated modern technology in their practice. PricewaterhouseCoopers (PwC), for instance, has transformed audit practice around revenue recognition by leveraging big data to look at entire populations instead of just looking at samples of shipping information, invoicing and cash receipts to build a 360 degree view around receivables
Another member of ‘Big 4’ audit firms, Ernst & Young (EY), has built its audit platform “Canvas” which leverages ERP systems to manage entire audit work streams, helping auditors better identify and respond to risks.
On the other hand, Deloitte has added artificial intelligence to its Argus platform, for analysis of audit documents. It employs machine-learning techniques to identify and extract key accounting information like leasing and derivative contracts, employment agreements and invoices.
Back home in India, The Institute of Internal Auditors India (IIA) has recognised the importance of ‘Audit Data Analytics’ techniques to improve fraud detection through generation of variance reports. Even regulators like Securities & Exchange Commission (SEC), have realised the need for leveraging technology to create a system that would enable the regulator to comprehensively track markets across various venues and systems, providing increased transparency and better access to critical data.
Credits : Akhil Handa