21st century technology is now available for firms of all sizes that increases productivity while working remote.
During this unprecedented time, brought on by a global pandemic, the need to work completely remote has forced most firms to rethink their processes. The key to any change in process can be answered by a simple question – Where do I begin? For auditors the answer is to begin with the first step of every audit, access to your clients’ financial data.
Accessing data directly from your clients has historically been either a manual process or some bespoke automations available for only the largest accounting packages developed for the largest companies in the world. Now your firm and your clients can begin reaping the advantages of remote data ingestion provided by Validis DataShare developed specifically for your market.
How does it work?
It starts with one-click technology, delivered to your clients with an e-mail from you, that allows your client to authorize their accounting data to be directly uploaded into DataShare. All transactional level detail is standardized in minutes, including industry unique A/R and A/P subledger details. Your auditors will have instant access to analytical tools and prepared workpapers, eliminating many of the manual procedures common on every audit. DataShare eliminates up to 60% of the PBC list.
With DataShare, you can upload data multiple times during the year and get an up to date view of your client’s financial situation. During these challenging times brought on by this global pandemic, the need to understand if there is a going concern issue has never been greater.
It’s all about improving audit quality
Delivering a higher quality audit is increasingly becoming ever more important. Validis recently released a Subsequent AR verification report to help further maximize your auditor’s time within each engagement.
Using the client’s bank statements as evidence, this artificial intelligence-based technology matches every P&L transaction to the related bank statement to show which items have cleared the bank for both revenue and expenses and a clearer view of where you need to focus.
For our US clients, the recent issuance of SAS 142 (link: https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/sas-142.pdf) the AICPA has now recognized these types of technologies as effective tools in increasing audit quality while reducing the time currently spent on alternative procedures.
For our clients in the UK, the Independent Review into the quality and effectiveness of audit led by Sir Donald Brydon and published on 18th December 2019, put forward 68 recommendations to improve the audit industry. Validis’ submission to Sir Donald’s review included our ability to help prevent fraud through the ability to verify P&L transactions against 3rd party bank evidence and increase audit quality with 100% population sampling.
Specifically, the Brydon recommendations which we help support are:
- 14.1.5 – That ARGA amends ISA (UK) 240 to make clear that it is the obligation of an auditor to endeavor to detect material fraud in all reasonable ways.
- 14.2.2 – That directors should report on the actions they have taken to fulfil their obligations to prevent and detect material fraud against the background of their fraud risk assessment.
- 14.3.5 – That the auditor’s report state explicitly the work performed to conclude whether the directors’ statement regarding the actions they have taken to prevent and detect material fraud is appropriate. Furthermore, the auditors should state what steps they have taken to assess the effectiveness of the relevant controls and to detect any such fraud.
- 24.1.11 – That, in the audit report, auditors should explain the reasons for the necessity and basis of any sampling techniques used in conducting the audit.
Our technology ensures auditors reduce their reliance on small sample transaction testing and gives them the ability to automate full population testing for all revenue and expenses, a key step in improving the quality and effectiveness of an audit and the detection of fraud.
One tool to manage all your data collection requirements
Sometimes change is forced upon us. In essence, the audit industry had evolved very slowly over the last few years. Those firms that had been planning ahead will have been disrupted less by COVID than their counterparts who have buried their heads in the sand. Technology exists today to automate many audit processes. At Validis we make the process of collecting and interrogating your client’s data easy. We offer a 100% digital journey that eliminates 60% of the PBC list, creates essential workpapers needed to perform and audit and helps you detect material fraud.
For more information about Validis and audit services then please visit our audit hub.