The Future of Financial Audits

Technology and innovation have increased greatly within recent years with almost every industry benefitting from new digital processes. 

From small to large businesses across a range of sectors, including manufacturing, transport, retail and healthcare, digital technology has paved the way for smoother processes and streamlined ways of working. 

Another industry that’s seen a dramatic shift in the way processes are carried out, is the finance and accounting sector. The audit process, although somewhat reliant on digital technology before, has now been refined via new, high-quality software and improved analytics. 

How are innovative technologies changing the auditing landscape?

Technology that once belonged to only a few elite sectors, has now evolved to become more affordable and easily implemented. AI, robotics, machine learning and data analytics is now being used across auditing companies to facilitate more robust processes. 

And, as their use becomes even more widespread, the design and development of specific audit tools is likely to further benefit the sector. 

Data sharing and storing is one area which has seen considerable change within the auditing industry, with companies and auditors working together, digitally and in a more streamlined manner. 

What are the benefits of new technologies? 

The advantages of such tools include increased efficiency and accuracy for both the auditor and the client. While some might be concerned that the use of artificial intelligence or machine learning might remove the need for the traditional auditor, that’s certainly not the case. 

As advanced tools assist with analysing data and speeding up many time-consuming processes, they also allow auditors to focus on qualitative information and apply more accurate insights, based on the computer-generated results. 

It also allows auditors to quickly and easily identify areas that might require more thorough, human intervention, saving them time that would have otherwise been spent on unnecessary procedures. Companies working with professional auditors also benefit from quality audits with less room for errors

What challenges do auditors face?

As well as significant advantages, there are also a number of challenges that new technology can bring. 

The number one issue is the time it takes for these processes to be implemented. New innovations need to be thoroughly tested and auditors need to ensure that they work before introducing them to a large number of clients. 

Another challenge is training company auditors to use the new tools. Some employees might have been working a certain way for a great number of years so will understandably struggle to embark on such a dramatic shift in their way of conducting audits. 

Other might need to be reassured that their role as an auditor is safe and is unlikely to be fully replaced by automated processes. 

There is still a fair amount of unchartered territory when it comes to auditors embracing new technology. But, it’s clear that these tools can be a useful addition to the audit process, enabling professionals to provide quality audits to FRC standards, with greater accuracy and deeper insights.