When the news of the 7000- crore Satyam scam first broke out, there was a furore. What followed was a series of corporate frauds, the latest being the 13000 crore PNB scam in 2018 that was far more shocking complex in nature. It was interesting when Finance Minister Arun Jaitley questioned the efficiency of auditors and laid the blame squarely on them for failing to comprehend the deceit, trickery and fraudulence and exercise right professional scepticism.
How will auditing change for better?
The point here is auditing firms often do not have the wherewithal to conduct large and complex audits. In fact, the auditing industry is struggling to keep pace with the fast-evolving IT market. Change will be visible only when small or big auditing firms go on to fully embrace the technological advancements and harness their potential for deriving maximum productivity, exercising quality auditing and accounting, ensuring higher efficiency and achieving professional growth.
The effect of Internet of things (IOT), Cloud, Artificial Intelligence, Mobile Applications, Social Media, Big Data and Analytics can bring a whole new dimension to the audit workforce. Each of these technologies possess powerful capabilities that can drive major improvements in auditing and accounting, strengthen relationships with clients and enhance client service. Which is why, the profession must train and develop a team of professionals that will work with a whole range of modern technologies and hone their existing accounting and analytical skills.
As industries compete with each other to survive the fierce competition, technology is driving many changes in the way we work, process information, interact and collaborate with one another. It is critical that audit firms recognise how new technology trends can transform the entire audit approach while determining accuracy, trust, relevance and transparency in the profession.
Here we highlight five prominent technological trends that are likely to envision new roles for accountant and auditors.
Big Data and Analytics
Big Data and Analytics have huge potential to change the face of the audit industry. In fact, in the near future, the industry will witness a major shift in terms of productivity, profits and risk management. For instance, the potential of bots is being explored which can be best utilised to scour the Internet for a particular client’s financial transactions and the information that will be available can further help automate the tax preparation process.
Audit analytics has an important role in raising the audit quality bar, in enabling focused testing of large or complex data sets 24/7 and in an effective and organised manner. So the transformed audit will include analysis of entire populations of audit-relevant data comprising of transaction activity and master data from key business processes, rather than just testing samples.
By using intelligent analytics, auditors are able to assess financial reporting, fraud and operational business risks, test real- time audit evidences and deliver quality outputs. Many organisations are recognising the tech trends and are investing good amounts to understand the impact of these capabilities on their businesses.
Artificial Intelligence and Robotics
Artificial Intelligence and Robotics can automate complex repetitive tasks and processes effectively, determining greater accuracy and efficiency and reducing operating costs. Such emerging technologies are inspiring for accountants, who want to shift from stereotype working to critical thinking. Cognitive Computing uses artificial intelligence and machine learning algorithms that offer more than analytic capabilities for making autonomous decisions. Taking cognizance of the growing popularity, audit firms are now exploring opportunities for utilising Artificial Intelligence to bring deeper insight into the audit process and raise the quality of output.
Cloud Computing has opened many innovative ways for accountants to communicate with their clients. Accountants are now able to perform their tasks from any location and deliver financial information and reports through the cloud, without being burdened with elaborate and rigorous processes. This leaves them with more time to engage with clients and focus on developing business strategies. Cloud offers better security and backup processes and brings about improved collaboration with clients.
Tax and Software Accounting
It is important for accountants to have a thorough understanding of software accounting for enabling professional growth. Moreover if audits are to be managed effectively, the tax software can help improve accuracy and reduce errors. Every business wants to avoid large tax penalties and problems with stakeholders. As accounting software programs become more automated, accountants will not be burdened with long lists of pending tasks Technology advancements are enhancing the accountant’s ability to interpret data efficiently and effectively.
With Facebook and LinkedIn growing increasingly popular Social Media is most essential for firms wanting to expand their brand reach. Moreover it is a valuable sales and marketing platform for accountants that that can help them to engage with prospective clients. Social media is a great way to network with people, build and strengthen relationships and develop the firm’s overall strategy. It’s important for firms to set policies, adopt best practices, and train staff on how to leverage social media and use the tools to reach wider audience. While the use of social media is still in its nascent stage across many parts of the accounting industry, auditing firms are slowly embracing the change.
Mobile Computing has revolutionised every sector and accounting and auditing firms are no behind. Forward thinking firms have started accessing various mobile applications for facilitating daily business from outside the office as well as providing faster and better services to clients. So, accountants can access real -time information and manage business even as though they are on the move. One can also perform brief tasks like time entry, updating project status, task information etc. from any location and yet stay up to date on important projects, so deadlines aren’t missed. Moreover electronically stored information such as e-mails, instant messages, voicemails, e-calendars, graphics and data available on mobile devices can be easily used for accounting and auditing.
Firms can also reconcile, send invoices, add receipts and create expense claims from smartphones or tablets. When clients have 24/7 access to tax returns, financial statements and other key documents, they are likely to access their financial data from their mobile devices instead of making phone calls or physical visits to office.
The App Revolution
Apps are a great way for offering a plethora of marketing opportunities. The app-based system will have features of call and video chat with accountants and auditors for a subscription fee. A video-enabled one-on-one consultation visits with accountants and auditors via their computers or through an iPad, iPhone, or Android device will help to understand the various grievances and complaints, analyse and even prescribe accounting and auditing routes over the phone or Skype.
Website makes all the difference!
Building a website from the client’s perspective brings an enhanced insight into everyday business. A dynamic website that offers a rich viewing experience, client-centred content, and keyword best practices is a significant medium for attracting new clients. Other features of the site includes directories like satisfaction surveys of clients seeking accounting and auditing service , platforms for learning and collaboration among accountants and auditors articles covering various aspects of accounting and auditing , online chats with clients seeking accounting and auditing service.
Technology has cut across all barriers and borders and landed even in small firms and businesses giving them access to worldwide customer and talent pools that were only available to multinational companies and a privileged few.