Emerging technologies offer exciting possibilities for the power of audits and the ability to analyse ever greater datasets in more detail and granularity. But this won’t happen in isolation in audit firms — businesses will also be rapidly developing new tools and adapting technologies to transform their processes.
This means that, while independence and professional scepticism will always be central to our work, technologies are likely to bring improved communication and collaboration with the organisations we audit. Relationships are likely to become more interactive and ‘always-on’ as the flow of data between the organisation and auditor becomes more continuous.
While ERP systems are often customised and there is limited standardised export functionality, the movement towards more alignment of the interfaces between ERP systems and audit firms’ technological capabilities could be a feature over the coming years, allowing the auditor to interrogate those datasets through specific audit lenses that are industry focused. If businesses were to streamline and standardise their financial systems – some global businesses have as many as 50 or 60 legacy systems – ‘cleaning up’ their data and putting it into a single standardised format might help their internal audit function and finance function, while benefiting the auditors as well.
KPMG Clara has already developed a more collaborative platform for us to share information and communicate with the organisations that we audit. This is likely to grow. We will see increasing levels of interactive engagement, for example KPMG Clara is helping us to present our findings in powerful visualisation capabilities to organisations. This enhances our understanding of transaction flow and allow us to ask more precise questions on those transactions that stand out from the others.
New technologies are a journey for auditors – and for organisations too. Working out whether and how to take advantage of blockchain, to what extent to base systems in the cloud, and in which areas of the business to implement robotics and artificial intelligence are all pressing questions for organisations across sectors. We will have to audit what they implement and use the new technologies to help us conduct our audit at the same time.
The dynamics of the auditor-organisation relationship look set to evolve in exciting ways.