Digital Tools Ease the Audit Process
Digital Tools Ease the Audit ProcessThis article was originally published on the Inflo blog.
Many people will remember having braces fitted as teenagers, and the dentist who struggled to twist and turn combinations of metal parts in their mouth with perhaps only modest outcomes anticipated.
Today, clear aligner technology makes improving one’s smile a relatively painless process and is almost invisible to see.
Not only that, but today’s dentist uses touch screen technology to show the patient the position of the teeth, and animated forecasts of how and where they are going to move over the period of treatment.
For both the dentist and the patient, this is a vast improvement.
In some ways, undergoing an audit might be considered a little like going to the dentist. And today’s digital tools are similarly enabling a far more seamless and streamlined interaction between auditor and client.
With today’s data and automation solutions, the auditor can access the information they need from the client’s systems, aggregate and analyze it, and complete the process much more efficiently than in days gone by.
New technologies, particularly around automation, are doing much of the manual work audit professionals historically did, leaving people more time to focus on work that’s most strategic, difficult, or requires the most cognitive ability because the perceived level of risk.
The result is that we are now better able to validate what has happened in the past in new ways and are increasingly able to anticipate the future with more clarity.
Armed with higher quality audits through technology, our clients are drawing better insights and more value from the audit process.
BDO’s Digital Audit Tools
At BDO USA, more than 8,000 audits are completed each year, many of which include substantial components from around the world.
BDO formally incorporated and prioritized digital transformation and innovation into our corporate strategy back in 2012. As a result, BDO is accustomed to delivering effective digital audit capabilities to our clients.
When we evaluate new projects or programs to pursue and invest in, we measure the extent to which they will satisfy our three priority objectives:
Emphasizing the client experience and ensuring mutual accountability between us and our client teams.
Leveraging technologies that direct our attention to items that merit the most attention, either because the risk profile is of mutual interest between us and those charged with governance, or as a matter of professional standards, or both.
Using technologies that further lend to our own transformation in the form of bots, process automation, and integration with the rest of our ecosystem of tools.
For example, consider audit data analytics (ADA). ADA starts with extracting the data we need from the clients’ systems. Extraction ordinarily occurs through service applications, the installation and running of customized extractions scripts, or through traditional manual methods. More often than not, there are multiple ways to do it, but each has its own cyber and integrity considerations that our clients are mindful of.
Since our clients use a variety of accounting systems, we built a solution, Harmony, to consume client data in whatever form it’s received in to organize, validate, and translate it into a common language that our analytics and other tools understand. We’re also able to store it safely over the course of the engagement.
Our analytics and execution routines are built to detect and surface the insights and issues that matter most, thereby adding value to the audit process.
Finally, these tools and workflows must talk to each other to the extent possible. It’s critical that integrations between different platforms take place in a predictable and seamless manner.
We believe deeply that most engagements have DNA; they have ancestry, and that genome is rich with value. We’ve therefore created multiple logic-driven templates based on size and corporate structure profiles, as well as sectors – from municipal bodies and pension plans audits, to large multinational retail to manufacturing clients, to large private natural resources clients, to boutique asset management funds. Understanding the DNA of those industries and the ancestry of those specific opportunities allow for leveraging standardized profiles to baseline the audit process while expediting the always necessary level of further customization.
Our approaches have allowed us to experiment with more advanced applications of data science. In the US, any municipality that receives federal funding is subject to compliance audits that focus on the eligibility and permissibility of what the proceeds are used for. Since the rules that govern the requirements are stringent and predictable, we are increasingly able to use machine learning techniques to test large quantities of data on expenditures with great precision.
As a result, our people remain focused on the items that require judgement, while the machines become incrementally smarter.
However, the audit business is ultimately a people business, which is why the client experience must emphasize progress and transparency. Our people must be able to make decisions in real time, tracking the data and human actions that are needed throughout the process.
If action items due from the client or audit team become at risk of causing a delay, gentle notifications surface that everyone can see.
When our professionals log on to their computers or phones in the morning, they can access heat maps and the day’s tasks, illustrating granular progress on every item. The distributed nature of the technology and geographic spread of our talent means that we can access and route technical subject matter to trained professionals, where needed. These tools have been especially helpful during the era of remote work.
BDO’s Digital-First Culture
We couldn’t have made the progress we have made without the significant buy-in from professionals of all levels, from senior leadership to entry level digital natives.
The key to securing buy-in was prioritizing transparency in our systems to ensure accountability. We can see who is doing what on any job, who might need additional support, and who is driving efficiencies. Insight into individual workflows allows us to optimize the way we support clients, as well as to mitigate any issues as they arise.
Incentivization has also played a role in energizing our audit professionals, with aspects of our process gamified and our people recognized and rewarded. Our Drive to Adopt team deserves credit for the creative ways they are motivating our people to seek out new and modern approaches to the work.
Since we began prioritizing investments in many of these digital solutions long before the pandemic hit, we were able to pivot quickly and thrive through accelerated adoption.
My dentist used to promote oral hygiene by telling his patients to only brush and floss the ones we wanted to keep. These days, digital hygiene for auditors has become the very essence of continuous improvement. Digitization continues to drive considerable improvement in the audit process, making it more modern and joyful for the client and auditor than ever before.
And that is reason to smile.
Want to hear more from Brian? Join him on Thursday, September 23 for the Inflo and BDO Live Webcast: Getting ready to adopt Digital Audit technology. During this session, you’ll discover best practices for technology adoption and implementation for your firm.