Accounting Today convened a virtual roundtable of experts and practitioners to share their thoughts on where the future of auditing is headed, amidst the recent rise of technology. Speaking to Mike Yates (Partner-in-charge, Auditing Competency Center, Crowe), Cathy Rowe (Director of accounting and audit product management, Wolters Kluwer Tax and Accounting North America) and Alan Anderson (President and founder, AccountabilityPlus) among others, they all had their say on the threats and opportunities that were headed our way, and what we all, as accountants, can do to make the best out of the latter. Below we provide some of our favourite responses to the questions asked:
Do these technologies represent a threat to the auditing profession?
Cathy Rowe (Director of accounting and audit product management, Wolters Kluwer Tax and Accounting North America): ‘’We’ve all heard statistics similar to this: “By 2020, AI will eliminate 1.8 million jobs, but it will also create 2.3 million new ones,” so the big challenge to the auditing profession is to minimize the impact of the losses and seize the opportunity of the gains. The foundational knowledge of accounting and auditing will largely remain the same, but it will require new skills to deliver on three main pillars efficiencies, quality, and most importantly value. The audit profession must embrace this change to continue to remain relevant as the trusted advisor for stakeholders that rely on the audited financial statements to make key decisions.’’
Alan Anderson (President and founder, AccountabilityPlus): ‘’Yes and no. I believe that those firms that don’t embrace technology will eventually go out of business. But the firms that do embrace and leverage technologies will thrive. Many of these technologies will look at all of the data faster without missing anything because technology doesn’t get fatigued when looking at volumes of data. Leveraging technology will elevate the skills of the auditor and allow them to be better prepared for a continuous assurance world.’’
Karen Larsen (Partner, Professional Practice Group, Baker Tilly): ‘’Technology is an opportunity for our profession, not a threat. Our auditing profession is built on a foundation of trust and confidence. Technology will only enhance what we, as a profession and as auditors, can bring to the public and our clients. It is an opportunity for us to transform our profession, deliver more valuable insights to our clients, and engage our younger professionals with innovative and challenging work. Technology must still be audited, algorithms must be vetted and data inputs must have internal controls to ensure the data being used is accurate. Auditing doesn’t disappear, but it will continue to evolve.’’
What do accountants need to do to make the most of these new audit technologies?
Rowe: ‘’Accountants must first embrace a mindset shift. They need to do things differently than before to both drive their own efficiencies but also better serve their clients. This shift requires the accountant to create a plan, with the intention of starting small. The first phase of this plan, to get the most out of the technologies, is to get access to client data — data is the prerequisite for using any of these advanced technologies to support a data-driven audit. Data can be obtained in multiple ways — reports can be requested from clients or a direct connection can be made to a client’s accounting system to capture the required data. To help facilitate this data request in a secure and timely manner, the accountant should also consider how they can enhance client collaboration directly within their audit engagement. This will result in both the auditor and the client having an aligned expectation of what is needed for the audit, and when.’’
Peter Scavuzzo (Chief information & digital officer, Marcum): ‘’First and foremost, all auditors — and for that matter, all professionals — need to have a much more progressive and open-minded view of their profession. The technology itself, while somewhat dense, is not the challenge. The issue is cultural and a calibration of the way individuals think. The perspective must shift from “it has been like this for years” to one that accepts change in a period of months. The rate of change in technology is far outpacing that of our ability to keep up. If you layer on humans’ natural aversion to change, especially in an industry such as accounting which has traditionally been resistant to change, the ability to start using and applying this technology will be further hindered by the enormous cultural and technological debt an organisation needs to overcome.
Accountants need to immediately embrace and promote a culture of change; they must incorporate data analytics into the fabric of their practices and how they view their everyday work. Accountants need to increase their knowledge about the current and evolving state of RPA, AI, ML, blockchain and data analytics in the industry. Most importantly, accountants and accounting firms need to immediately establish a plan to prepare their organisations, their staffs, their data, their software and their processes for the day AI and ML are commercialised and ready for consumption. When that day comes, the firm that is prepared will be able to move ahead quickly, while the firm that is not will stall out, and it will take years for them to recover.’’
Anderson: ‘’Embrace technology at all levels and become technology sponges. Make time each week to read and become aware of what advances in technology are taking place and consider how those advances could or will impact the audit.’’
Interesting stuff, and we have to say that we agree. Change begets change and if you don’t move with the times, you’ll just be left behind. To learn more about how we infuse technology into our processes, please do not hesitate to get in touch with us today.