Learn how to better analyze risk assessments by combining methodology, technology, and data analytics in audit engagements.
Auditors in today’s climate know there’s never been a more challenging time to monitor and meet evolving regulatory changes and professional standards. By blending the assessment, documentation, and response processes with the best in technology, you can transform your audit processes with even more success.
Data analytics in audit engagements: Technology enhancements
Has your firm experimented with any data analytics tools? In a recent survey, 60% of 450 respondents said “not yet” or “no” to this question. Utilizing the latest software, you can better analyze risk assessments with more accuracy and efficiency by combining methodology, technology, and data analytics in audit engagements. Change can be a struggle to implement, especially in a firm that has reliable processes in place. But are your audit processes working as well as they can to benefit your firm and offer the best insights and services to clients? Streamlining your methodology process with the latest technology and implementing data analytics software will help you run risk assessments and audit engagements more effectively.
With emerging technologies like data analytics, machine learning, AI, and blockchain threatening to forever change the face of the accounting industry, firms are more focused than ever on innovation that will propel them into the next generation of audit automation. Failure to support risk assessments (e.g. inherent risk assessments) causes a disconnect between understanding the entity and risk assessments. Lack of documentation for inherent risk assessments can also be problematic in making the required changes. An absence in judgment involved in risk assessments can lead to holes in your process that can negatively impact your firm and your reputation.
An evolving future demands a platform that’s optimized for adaptivity. This means the right content delivered at the right time where everything is carefully managed and secured throughout the auditing process. Your audit staff deserves new tools that modernize firm operations while improving team collaboration to deliver on time with unmatched quality and unexpected insight. If you have goals to improve your audit engagement processes, and utilize technology to do so, the first step may be to see what you need to change in your firm.
Is your current methodology working for your firm?
When implementing your methodology for audit risk assessments, it’s imperative to avoid skipping steps so that you don’t assess the risks incorrectly. What’s the big deal? Peer review deficiencies can become a big issue for your firm if there is failure in several areas including: failure to assess risk at the relevant assertion level, failure to support risk assessments, failure to identify and respond to significant risks, and finally, failure to link risks to audit procedures.
The question is: how can you improve your processes to pass peer reviews and have more successful audits? The main aspects are to identify, assess with documentation, and respond to risks correctly. There are generally two types of risk assessments in audit methodology, financial statements, and assertion level. Documentation is most important because if you identify risks but don’t plan to reduce those risks, your auditing process could be in trouble. By combining audit methodology with the best in technology, you can keep your firm well within the latest risk assessment standards and reduce human error.
With the latest technology in cloud-based integrated audit software, you don’t have to worry about version control issues or paperwork, because everything is stored in the cloud. This technology provides ease of use, whether you’re in the office or in the field. To keep up with the rapid pace of change, audit and accounting firms must modernize or fail. This includes providing new offerings to clients and smarter ways to operate internally.
How can you ensure your risk is acceptably low?
Generally, the audit process goes like this: you identify risk determinations and responses, document risks, and customize risk responses based on your assessment by using methodology. You have to define your goals in risk and assurance ahead of time. Once you determine your strategy, change may be needed to grow your audit practice and ensure its accuracy. If your goal is to increase audit revenue in your firm, there are steps you can take.
First, ensure staff is on board by validating the most effective processes are in place and training is provided. Second, optimize for risk assessment and change accuracy through the combination of audit methodology and technology. Third, incorporate data analytics into your audit process to save time and create efficiently in the workflow. This automation enables your team to work faster and produce critical answers in less time, no matter which cycle you’re closing. Embracing change is not enough. You must invest in technology to grow and transform your firm using modern data analytics in audit to meet your goals.
Consider a software upgrade to enhance your audit risk assessments
If you’re thinking about upgrading your audit software, it can seem like a daunting task, but once you make the change, you can let the technology do more of the work for you. Data analytics in audit and cognitive technologies are expected to continue evolving in the tax and accounting industry, making the audit process increasingly effective and efficient. Cognitive and machine learning provides assisted decision making for auditors, based on how others in the profession have made similar judgments. It’s like having a virtual peer who is always available for you to consult with anytime. Thomson Reuters has seen this change coming for some time and is well-positioned to help customers capitalize on it. We can help you build the audit practice of the future.
Expand your auditing practices by utilizing advanced data analytics tools that combine methodology with technology to ensure the accuracy and speed of your audits.
WEBINAR: The Convergence of Audit Methodology & Technology
The acceleration of new technology has put your audit practice at a crossroads. Do you maintain status quo, or transform your audit practice to thrive in the ever changing regulatory and advancing technological environment? This session is designed to provide an overview of how audit methodology is enhanced through progressive technologies. We’ll share real-life stories about how you can move your audit practice from time-compressed compliance activity to high-value client service focus.
Watch this insightful webinar on demand now.
