In a previous article, Data-Driven Audit Engagement Workflow, we discussed the Data Driven Audit and the background to a Data Driven Audit Engagement workflow. The data-driven element and workflow should be applied across all phases of the audit.
By applying a consistent and clear approach from the beginning to the end of the engagement, everyone is working in the same way. Different levels of the engagement team — from junior staff to managers to partners — have different responsibilities, but they all use the same workflow, data, and screens in the platform. This enables us to streamline the process, get rid of redundant tasks, and work smarter.
In this post we discuss the activities involved in Planning as we work through the phases of the audit.
Planning activities are grouped together in a logical suite of work programs. The top-to-bottom workflow provides auditors with a clear planning process and enables total accountability between team members, with progress bars tracking the status of each work program and the overall planning process.
Advanced Screens are intuitive user interfaces designed to support documentation and review of the more challenging areas within the planning stage of the audit process. Along with providing more advanced linkage to other areas, such as risk assessment, they also focus the attention on the outputs from those areas and how they impact on the engagement.
Risk assessment can be performed at the financial statement line-item level or a lower subcategory level, allowing for more granular assessment. The revised risk assessment standards introduce the key concept of spectrum of risks. For each risk, scores are assigned to the potential likelihood and magnitude of misstatement. Using those scores, each risk is then plotted on the spectrum of risks graph, helping auditors to visualize their assessment and inform where more significant risks exist. Many decisions made during risk assessment and the broader audit planning process are interconnected. The Digital Audit methodology establishes clear linkage between these related areas, ensuring documentation is aligned across the file.
Approval work programs summarize the work performed and conclusions drawn for the most significant planning procedures. Reviewers can approve or directly edit these key decisions from a single summary screen, saving time navigating planning work and highlighting areas that are of high importance to the audit.
During a recent webinar we asked attendees What is the highest level of usage of data analytic tools in your audit engagements. While the poll showed many firms are thinking about the data-driven audit and encouraging its use, when it comes to adoption not everyone is in the same place, and that is to be expected.
For a deeper dive in to planning in the Digital Audit read our Adopting the Digital Audit using Inflo Case Study which includes several examples of work programs used in the planning phase.
At Inflo, we aim to change the experience of audit teams, we want them to be excited and enthusiastic about what they are doing at every step, ensuring they are performing at their best by supporting them through this transformation. We also want the end client to feel excited about the process and outcomes they are experiencing and receiving. We want them to be involved in the process and be more aware of what is going on. We want them to feel challenged in ways they have not been before in order to create a higher value output, compared to what they would traditionally receive.
Read more on the Data Driven Audit Engagement Workflow in our free guide.