Over the past few decades, auditing has evolved dramatically. Auditing is becoming more robust and cost-effective as a result of the use of technology applications to ease the process. These shifts in paradigm have increased our dependency on technology, and we feel it has become more vital to integrate automation and start reasoning about artificial intelligence and how we do audits currently. Issues and fixups are regularly checked, evaluated, addressed, and documented on a regular basis. This allows businesses to anticipate future issues, reduces the amount of time they engage with their external auditors, and instills trust by exhibiting financial health and accountability.
These actions are guided by two main aspects of auditing:
1. Open-book Audit
The following elements are included in open-book auditing:
- Apart from secret sections not routinely inspected by auditors, access privileges to the general ledger.
- Entry to the close-management system on a read-only basis
- Navigate to all appropriate systems that deal with forgery, administrative control, and authorization breaches on a read-only basis.
- A central repository for documents
- A safe and secure working environment
2. Risk based Audit
Auditors use the risk-based approach to examine the potential for substantial inaccuracy in financial statements based on prior knowledge of the client’s company.
Auditors that use a risk-based auditing methodology must:
- Highlight critical hazards in the daily operations of your firm.
- Examine the potential threats to financial statements.
- Define audit methods based on the risks that have been identified.
In the future, auditing will become increasingly automated, and upcoming auditors will be expected to execute more activities than those necessary a while back. ACL Robotics and CaseWare IDEA are examples of corporate automation systems that have been available for the past several years, yet each of these older tools generally required specialized skills to operate efficiently.
Automation should be prioritised to decrease audit load because they will:
Reduce workloads to increase employee efficiency
Ensure a seamless audit process in every situation
Reduce direct costs
Fees should be in accordance with industry standards
Additionally, automating risk management practices—a crucial component of decreasing audit burden—can assist you in more cost-effectively managing the increasingly complex risk landscape.
Finally, it is high time for any company to consider adopting automation to have more active and transparent audit procedures, as more organized workflow automation tools are adopted by businesses and their clients with the help of professional service providers, further shifting the terrain in favour of meaningful auditing.