Improving efficiency within the audit process by using digital technological tools

Digital Technology

Technology is rapidly evolving, and artificial intelligence (AI) is transforming the way we work and communicate. Auditors need to be aware of the digital technology tools that are currently available and how to use them as part of the audit process to make the audit process more efficient and effective.

This requires that the auditors not shy away from technological tools but embrace these tools as part of the audit process. There are different areas within the auditor process where digital tools can be incorporated.
Digital tools to help improve the audit process include the following:

Artificial intelligence − Auditors can use artificial intelligence to provide research or enhance research for client engagements. Digital technological tools can assist auditors in saving time by speeding up data gathering from structured and unstructured sources. Auditors can identify areas of risk within audit engagements by training AI to analyse internal client data.

  • Data visualisation − Sometimes auditors are required to analyse and conclude on large amounts of information from client systems which could be difficult to understand. Auditors are able to utilise data visualisation, which is a process of displaying complex data in a clear and understandable format that can assist in identifying unusual patterns and trends as well as providing useful means of communicating risks and findings to management. This involves the use of arithmetic and graphics to articulate the data in a format that can provide further clarity for movements within the provided client information.
  • Drones − In this new era of technology, auditors can test or attend inventory counts or asset counts by making use of drones. This tool is most useful in instances where the organisations have large physical infrastructure or stock that spread over a space that would be impractical to cover using footwork. Drones are able to get a broader enhanced view of the assets or inventory and also provide pictures as additional evidence.
  • Robotic process automation tool − Another impressive digital tool that is available to auditors is the robotic process automation tool. This tool is used in instances where there are repetitive tasks which are not too complex and can be used to gather audit evidence. Where an auditor has been with the client before and it’s a continuing audit, auditors are able to use automated roll forward of the file structure and documented templates from the prior year’s audit file. Care and due competence should still be applied when using this process and compliance with the auditing standards. The principles of independence, objectivity, professionalism, due professional care will still apply when conducting the audit engagements.
  • Anti-money-laundering procedures − There is an added responsibility to audit firms to not only perform risk assessment procedures directed to understanding and knowing their clients; now there is even a legal responsibility to consider anti-money-laundering procedures if you are an accountable institution. Using a software system can assist in this process by enabling the firms to remotely identify and perform automated checks against sanctions registers and lists of politically exposed persons (PEPs) and searching the Internet for any adverse media relating to the party being onboarded.
  • Blockchain − Auditors can also use blockchain security audits to identify, verify and evaluate high-value transactions taking place on blockchain. This process will require a specialist who is trained in analysing sophisticated codes within the systems to determine if there are any unusual and suspected vulnerabilities within the applications available or used by clients.
    The above are just some of the few digital technological tools that can assist in making audit engagements more efficient while enjoying the benefits of technology and still applying the international standards of auditing to perform the audit process.

AUTHOR: Angel Sitole CA(SA), Project Director: Assurance • Standards at SAICA.