The use of digital tools in analyzing large collections of data is certainly on the rise, as both businesses and auditors look to increase levels of effectiveness and efficiency.
Furthermore, any system improvements are also of benefit to customers and investors, given the added confidence a digital audit can provide when it comes to judging the legitimacy of a company’s processes.
Here we'll take a look at when audit analytics can be used, and the benefits for auditing teams of switching to a dedicated software approach.
Modern audit analytics tools usually involve digital software. This could be any device that’s capable of collecting and analyzing large amounts of data. In 2022, the most effective and efficient forms of digital tools available come in the form of dedicated audit analytics software. This can act as a digital work buddy for external auditors, making it possible to accumulate 100% of the evidence, rather than basing decisions on a sample.
Audit analytics has been growing as a tool amongst internal auditors for some time, as a method of finding more accurate results upon which to prove compliance, base business strategies and gain more insights into successes and failures.
Now, more and more external auditing firms are realising the potential that stems from using dedicated auditing software. Given the drive towards continuous improvement, audit analytics can identify trends found across complete sets of data, identifying any inconsistencies and concluding with a far more accurate set of results.
As the audit analytics’ process deals with 100% of data as opposed to samples, auditors can gain better insights into their clients and give the auditing industry an overall boost. More accurate audits reinforce public faith in the whole financial reviewing process.
For a greater overview, see our post on what is audit analytics?
As we’ve touched on above, using advanced audit analytics can result in more effective and efficient audits. External auditors who use dedicated auditing software can now work from 100% of company data, rather than having to make decisions based on data samples. Using tools makes greater accuracy possible, as software can collect and analyze data at a speed far beyond human capabilities.
There are also benefits regarding the auditor’s workload. Although switching to new technology may increase workload initially, subsequent audits should become quicker. This is down to the fact that lots of menial auditing processes can be delegated to the software. This leaves auditors to focus on specific areas that require more intense investigations, such as fraud.
Ultimately, the use of audit analytics can result in a better level of service, for the same/similar cost. Companies being audited receive a vote of confidence, given the greater levels of data testing, which is reassuring for stakeholders and customers alike.
Without using a crystal ball, it’s impossible to predict the future of audits with 100% accuracy. But a key phrase to use here is ‘continuous improvement.' Now digital technology has been injected into the audit, there’s no going back, given the huge difference in quality it can potentially make.
Designers and programmers will continue to improve their software, and auditors will become more skilful in their employment of it. We’ll likely see an increasing reliance upon digital tools, with greater furrows made into the world of artificial intelligence and machine learning. All of these should have a highly positive effect on the auditing profession as a whole.
Auditing firms across the world are already reaping the benefits of audit data analytics. Given the immense scope of data that software can gather, dedicated tools make for greater precision, delivering real results in fractional timescales.
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 software can act as your 24/7 assistant, analysing and mapping out data analytics for any company, big or small.
Contact us today for an entirely new approach to audit data analytics.