Who moved my calculator?
31 October 2017
When I started my career as an auditor some 20 years ago, my tools of the trade were my calculator, coloured pencils and 16 column analysis paper. Fast-forward to 2017 and advancing technologies have revolutionised many aspects of our lives. The auditing profession isn’t immune to the revolution, and the good news is we’ve already adapted. Audit innovation might be a popular topic today but in fact for more than a decade we’ve been introducing new technologies to our audits to improve audit quality and the audit experience.
More recently, last year we won the International Accounting Bulletin's 'Audit Innovation of the Year' Award for our data-auditing tool Halo, and I’m pleased to say we won the same award this year for our work on GL.ai, our prototype tool that uses Artificial Intelligence (AI) to analyse data points and apply judgement to detect anomalies in general ledger transactions.
But we’re now at an inflection point where much more could be done. Stakeholders are calling for greater transparency from companies, and, from auditors, deeper and more meaningful insights. Auditors have access to vast stores of available data, and data analysis tools for rapid interrogation. But we need to be brave enough to make the leap to new ways of doing our jobs.
How then, can the audit evolve to deliver what stakeholders are looking for?
Changes through technology
Automation is making auditing faster, smarter and reducing the risk of error. Detailed transaction testing is becoming much less manual and reducing time spent. Robotic process automation is being built into auditing systems so the days of laboriously filling in spreadsheets are long gone. But we can go much further.
With the arrival of newer emerging technologies such as AI, natural language generation and data visualisation audit now faces a game-changing moment. When these technologies are harnessed to augment the audit, the difference will be transformational. By 2030, UK GDP will be 10.3% higher in 2030 as a result of AI alone; AI promises to increase audit quality and efficiency by much more than that.
I’m fascinated by the possibility of machines augmenting our existing capabilities, and that’s why it’s the first topic we’ve explored in our Confidence in the future campaign. But as passionate as I am about technological innovation, I’m equally certain that human auditors need to remain at the heart of the audit.
The human factor
Machines don’t get tired, and when they’re following a clear and logical set of parameters, they don’t make mistakes. So they can give much more assurance when dealing with data processes that involve millions of transactions. This factor alone should create additional confidence in audit. And yet, audit isn’t simply about vast numbers of financial transactions.
Examining all of the data in the world at lightning speed won’t help unless we have skilled auditors on hand to interpret the analysis. Although AI is emerging as the defining technology of our age, it’s still a machine which relies on human intervention. Without intelligent human guidance to train the machine and to “teach it” to identify real anomalies, the impact of AI will be limited.
So for me, we must evolve how we use technology in the audit to deliver higher quality, but also ensure we keep training our auditors to keep up the pace. Human auditors, technologically literate, working with intelligent machines will deliver better results than either one could alone. Stakeholders will be better served through more dynamic and deeper analysis by machines, delivered with the emotional intelligence and experience of auditors.