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Audit in the Age of Technological Evolution
A dimly lit corridor of an accounting firm surrounded by dusty folders and papers – is how most modern accountants will describe the traditional audit function. While that picture still pretty much defines traditional audit functions, it is the picture of a time gone by.
In contrast, modern audit functions can be seen in the reflection of advanced computing machinery, the processing sound of heavy data files, and wide screens running complex accounting software simultaneously. We are amid the age of technological evolution. Technology has transformed every industry that embraced it, and accounting and audit are no different.
While the adoption of technology has transformed accounting and audit into a high-functioning practice with ever-growing signs of innovation and incredible efficiency, some audit challenges still linger, which cause enough problems for the auditors to keep them on their toes at all times.
Through this blog, we will look closer at the audit challenges in the modern age and how embracing technological shifts can help auditors navigate the complex accounting terrain. We will be taking a closer look at how technology is an ally to modern auditors and how it’s always a smart move to partner with the experts if you want to build a resilient and future-ready audit practice. So, come along as we navigate the complex landscape of modern auditing amid the tremendous technological shifts that accounting as an industry is undergoing.
Audit Challenges of the Digital Age
There’s no denying the fact that the digital age has transformed the accounting landscape for good. It has presented accounting practitioners with unprecedented possibilities to grow their practice and open new revenue streams. However, with those opportunities and possibilities came challenges that were unbeknownst.
Thus, accountants found themselves battling on an entirely new frontier, with challenges they had not faced earlier; however, this time, they had a new and potent ally battling alongside them and helping them overcome those challenges with absolute ease. Let us have a closer look at some of the biggest audit challenges of the digital age and how you can overcome these challenges with the help of technology.
Challenge 1: Data Inundation & Scarcity of Insights
The beginning of the digital age brought considerable datasets in the form of invoices, digital logs, transaction records, Etc. for auditors. Auditing petabytes of data in all different formats was just not humanely possible.
Add to that the monumental task of extracting meaningful insights from all that data and looking at a mountain that is impossible to overcome. This is where advanced data analytics tools and technologies came to the rescue. These advanced tools can analyze massive datasets in seconds, flag any possible anomaly, predict a trend, or detect potential fraudulent data. All of that gave immense power to the auditors’ hands and provided them with valuable insights that made them embrace the datasets instead of detesting them.
Challenge 2: Ensuring Data Integrity
Ever since the use of data became prevalent within the business fraternity, there has been a significant increase in the number of cyber threats and data manipulation instances. Auditors and CPAs have been rather vocal in raising their data integrity concerns.
Thus, auditors must be vigilant in identifying or flagging any possible data manipulation or anomaly observed. Overlooking the data integrity can result in better or correct insights, hurting the business outcome.
Challenge 3: Emergence of AI & Blockchain
While the rise of technological advancements certainly aided the auditors and the CPAs, it also opened some technological frontiers unknown to the accounting world. An excellent example is the advanced AI algorithm or the distributed ledgers of Blockchain.
Getting used to the inner workings of these systems and identifying and handling the vulnerabilities of these systems certainly are the challenges that auditors and CPAs will have to learn to overcome.
Challenge 4: Getting Used to Life in A Bot-Driven World
While automation has made life easy for humans, the skepticism around automation and bots refuses to go away. However, auditors and CPAs will have to overcome that skepticism and learn to trust bots to streamline their operations and attain higher levels of efficiency.
It’s OK to have professional skepticism; however, as an auditor, you must carefully evaluate the automated processes for integrity and correctness and eradicate any possibility of an error. The way to go is having a human at the forefront of the automated audit process.
Challenge 5: Cybersecurity
Cybersecurity is your protection against the invisible enemy. As an auditor, you constantly deal with sensitive information, which in the times of Cloud and online systems is always prone to breaches and other malware attacks.
If you are to safeguard your clients’ financial information against any possible attack, you must acquire cybersecurity expertise to identify vulnerabilities in the system and any potential fraud scheme. This will truly prepare you for the future.
The Future of Auditing in the Digital Age
In the digital age, where everything and everyone is predominantly driven by technological advancements on a stream of data, the future of auditing will be determined by the ability of auditors to deliver efficient, safe, and insightful services to their clients while harnessing the power of technology.
In the future, technology will not act as a mere enabler of services but will also serve as an architect of new and innovative services to elevate the overall audit service landscape. As an auditor or a CPA, investing in upskilling is the easiest and the most effective way to prepare for the future of auditing in the digital age.
It will unlock several possibilities for you in the future and also prepare you to overcome any potential audit challenge you face. Furthermore, you can partner with audit outsourcing service providers to provide the necessary resources, technology expertise, and solutions to prepare your practice for the future. If you want to partner with one, we can help you. Just write to us at [email protected], and we will have our experts contact you.
