Data analytics are used in a wide number of business situations, and there’s a growing awareness as to how useful they can prove to the auditing profession. Let’s look at five main advantages of audit data analytics, and why every accountant and auditor should be aware of them.
Advantages of audit data analytics
- Audit analytics enables big data to be used
- Audit analytics can be a point of difference in a competitive market
- Menial, time-consuming tasks are reduced
- Analytics reinforces faith in the industry
- Greater value for money
Let's look at the advantages from a general perspective. The use of audit analytics enables greater efficiencies and more accurate findings from the review process. As a result, businesses will be able to create strategies based on verifiable data, rather than a mix of small data and professional assumptions. The effects can revolutionize the auditing process as a whole.
Let’s see how this looks in practice:
Audit analytics can spell the end for traditional, sample-based auditing. There’s far less chance of errors being made, or inconsistencies remaining at large. ‘Big data’ is still something of a buzz-phrase at present, but companies who are able to ascertain complete data sets have a much larger pile of evidence to work from.
As a result, we may see the role of the external auditor morph into that of a business advisor, given the insights they will be able to glean from having access to such information. This may lead to securing firmer, more long-lasting relationships with the businesses they work with. And companies have an additional specialist to hand who can likely understand their data better than anyone else.
The speed at which audit analytics can collect and analyse data is far beyond human capability. If a digital approach is used, audits can be completed in faster timescales, and investment decisions made at a quicker pace. This could make all the difference in competitive markets, where the quickest decisions secure advantages for some businesses over others.
Read our post on when can audit analytics be used for further information.
An audit analytics strategy reduces the amount of time that auditors have to spend on menial, repetitive tasks, as these can be delegated to a dedicated software tool. As a result, auditors can turn their attention to their true areas of expertise. Such as making insightful recommendations for the companies they’re working for. And with software taking care of more time-consuming tasks, auditors will be able to spend more time investigating areas of high risk.
Reputation is a massive ingredient in whether an individual, business or industry succeeds or fails. So, the use of audit analytics can be a great booster of integrity. For businesses being audited, 100% data use offers transparency that all is above board – a measure which is hugely important when it comes to snaring the interest of clients or consumers.
Moreover, an audit data analytics plan reinforces faith in the auditing process. There can be a few excuses made when working from 100% data sets, which raises credibility levels for the financial review industry a whole.
A more in-depth audit, dealing with deeper data, offers greater value for money – especially if timescales are similar when compared to traditional processes. Alongside freeing up auditors to work on the most important areas of an audit, analytical software can cut down timescales by being able to collect and analyse data from multiple sources.
Although some accounting firms have already realised the benefits of using audit analytics, plenty still use a traditional, sample-based assessment process. As with all new innovations, it takes seeing a solution in action to truly realise its true potential. But one thing is for sure – the opportunity to use big data sets, free up auditor’s time and save money in the process is set to become the new normal. Leaving those who use audit analytics are giving themselves a distinct advantage.
For a deeper understanding of companies and their processes, adopting the best and latest technology is a must.
Used by more than 1000 accounting firms worldwide, Inflo can act as your 24/7 auditing assistant, analysing and mapping out audit data analytics for any company, big or small.