Data driven audits – 6 tech considerations to maximize your audit capabilities
Over the last decade new accounting information technology has flooded into the market, providing accountancy firms with an opportunity to improve the efficiency and profitability of their business and deliver better outcomes for their clients. For auditors the data-driven audit can be transformational, allowing them to re-direct their focus from time-consuming, manual tasks to more effective data analysis, predictive insights, and fostering their drive to provide trusted advice to their clients.
There’s no doubt it’s gaining traction. In 2020 three of the Big Four pledged a combined investment of $9 billion to develop technology to re-shape the way they interfaced with clients. And when Accounting Today quizzed a group about their approach to technology, 73% reported that there was an “urgency” at their firm for tech adoption.
But is clever technology for everyone? Is it perhaps a square peg that doesn’t fit easily into the round-shaped tech stack that a firm might currently use? That’s certainly one of the criticisms I’ve heard bandied about, but I’m very much in the camp that a business culture that resists digital change impedes opportunities for growth and development.
“If it ain’t broke, don’t fix it” is not good enough in 2023 when competitors are integrating new platforms to increase efficiencies, adding value for clients, and building in scalability. Read Jeff’s blog on the “same as last year” mentality for his thoughts on this.
But of course, it’s important to ensure that integrating audit technology is going to deliver results – that it’s fit for purpose and is cost-effective. Every firm is different, and auditors must do their own research. However, for firms serious about investing in audit technology, I believe there are six key questions they should ask themselves:
#1
Will it work with my existing processes?
One of the biggest questions we get is: “will I be able to integrate it easily into my workflow?” This is important to address. If the answer is “no” you’ll find yourself creating much more work in the short to medium term, drawing out the time it takes to reap overall benefits. Certain features can make configuration simple – such as only needing to connect one API instead of multiple integrations.
Getting your technology set up for your environment should be possible too. Look out for features such as customizable user interfaces, including white labelling. You’ll want your solution to reflect your corporate ethos and terminology.
Once you’re set up, you’ll also benefit from an ongoing relationship with the vendor. Consider what kind of support package is offered. Is there training, onboarding, and ongoing support?
#2
Will it create time efficiencies for my audit team?
In answering this question you’ll find yourself looking for some numbers to quantify a vendor’s promised benefits. Weigh the technology’s efficiencies by time saving and the increased speed it’ll bring to your decision making, then consider the further benefits. For many firms driving efficiencies increases satisfaction in the workforce and gives opportunities to re-deploy staff to more complex, added value work.
Competitive technology should be able to deliver meaningful efficiencies. Validis promises savings up to 8 hours average audit.
#3
How easy will it be to use?
Connectivity is important with any technology integration. For data driven audits the solution must connect to the range of client systems – notably their accounting software packages.
The user interface or integration process should be simple and attractive, improving client retention by saving them time and improving their experience that extends to staff at the firm.
#4
Is the vendor credible?
Software vendors must be trustworthy – are other firms, and their clients, happy to use their digital platform? Additionally, vendors must demonstrate that all information collected by them is safe and secure.
Competitive technology should be safe, secure and able to demonstrate benefits to the end client too. Businesses that use Validis save up to 7 hours per fully encrypted data upload. Validis is also ISO 27001 certified and SOC 2 accredited.
#5
Can I deliver added value to my clients?
A good audit will provide value add to the end client and technology has a role to play. For Validis the benefit of “real-time” financial data is big, so see if vendors can enable these benefits to trickle down to the client. It’s down to the firm to consider how they ensure their clients benefit from access to their data.
When choosing a solution to digitize your audit, think out the box. Digging deeper, technology can offer forecasting functionality too, as well as industry analysis and comparison. There may even be additional compliance benefits on offer.
Ultimately, “insights” can be turned into client business growth.
#6
Is the technology future-proof?
Finally, firms need to look ahead. If a business expands, will the technology grow with it? For example, how many client uploads per month can the technology guarantee and does the technology offer deeper functionality, should a firm want to tailor the platform to its specific needs?
When reaching this stage in your procurement, vendors should give you assurance that their solution will continue to be a good fit. Modular, flexible technologies are great at integrating with other systems and can really enhance your firms existing processes. It’s also important to make sure that they’re aware of regulatory change and can respond quickly if compliance requirements shift.
These are essential attributes for a high-performance audit solution. If the audit technology under investigation can’t deliver on these “must haves”, then it’s simply a bad fit – or yes, a square peg in a round hole.
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We deliver on the “must haves” to power your audit capabilities. Get in touch and arrange a demo to see Validis in action.