Audit D&A    |    Opportunity for audit with D&A    |    Power of D&A    |     Key features of Audit D&A and Case study    |     Audit D&A at KPMG

D&A unlocks the data in your business and delivers insight to help enhance audit quality.

Traditional audits are performed on historic snapshots of your business — which made sense in less complex economic times, when the past was a fair indicator of future performance. But the world has changed. Audits need to match these volatile times and deliver more — more relevant insights to keep you one step ahead, no matter how complex the present is or how future appears.

KPMG’s audit — powered by D&A — is raising the bar on audit quality by enabling us to test complete data populations and understand the business reasons behind outliers and anomalies. Automated audit capabilities let our people focus on the higher risk areas of the audit. And the enhanced business insights our audit teams bring to the audit will help you see your business from a new perspective.

The financial statement audit has long delivered compliance and confidence, and it will continue to do so. But in today’s business environment, this may not be enough. Advances in technology and an explosion of data have changed the game. Organisations and investors now have access to a breadth and depth of information that would have been unthinkable a decade ago. The most enlightened of companies are making use of that information to give them a competitive edge. While auditors have always relied on their analysis of available data and information to assess the accuracy of the financial statements and aid them in reaching an audit opinion, they by and large use methods like sampling to do so today. We believe they should be equipped to leverage more of the available information to further enhance the quality of the financial statement audit and deliver additional insight and perspective.

At KPMG, we see audit as an opportunity, not an obligation. We go broader and deeper, beyond statutory requirements, to realise the value of the data that’s available. We help organisations take stock of their financial position, learn about their performance, understand where they could be doing better, and prepare for what the future may bring.

Our dynamic audit is designed to unlock the value of our audit process.

Data & Analytics (D&A) is the key to unlocking the rich information that businesses hold. By effectively interrogating and understanding data, companies can gain greater understanding of the factors affecting their performance — from customer data to environmental influences — and turn this into a real advantage. D&A is helping businesses to become smarter, more productive, and better at making predictions.

D&A also has the power to enhance the assurance process. At KPMG, we have been using D&A for many years to effectively utilise the data our clients hold. Over time, we have developed a series of software and tools that integrate into our audit, giving us the ability to study entire data populations and that help us to better identify risks and investigate anomalies.

Now we have taken this innovation to the next level. We have developed an audit process that is built with D&A at its heart — delivering a dynamic audit that delivers hindsight, insight and foresight.

Audits have traditionally focused on looking back; analysing transactions and other data from past activities. While audits enhance confidence that financial statements comply with standards governing their preparation, they do not release the value of data.

Using D&A, we make the analysis of the past more insightful. Rather than sampling transactions data to test a snapshot of activities, we can now analyse all transactions processed, allowing us to identify anomalies and drill down on the items that show the greatest potential of being high risk. Our systems automate this process, increasing its ability to produce high quality audit evidence.

This level of analysis means we can more easily identify trends and anomalies for further investigation. It allows us to give organisations greater insights into their past performance. And this in turn enables them to take stock of their processes and activities and adjust them to improve performance.

For an organisation to really understand its performance, it must look beyond the figures — and measure successes against those of peers and the best in the world. KPMG audits provide the opportunity and ability to make this comparison.

We use industry-specific data and analytic models to provide benchmarks and identify patterns against which we can compare your organisation’s operations. We give you the information you need to measure performance against industry peers and we benchmark data on operational KPIs. We provide perspectives on performance related to consumer sentiment so you can assess the impact on sales and operational activity.

As well as benchmarking, we look in depth at the data, discovering complex patterns, making sense of them, and identifying anomalies. We use this information in our audit of the financial statements and to generate meaningful, useable insights — that give organisations invaluable information they can act upon to gain real advantage.

The future can’t be predicted — but having a view of what it is likely to bring can make all the difference. By looking ahead and anticipating scenarios, an audit can play a major role in identifying the future risks facing an organisation and quantifying the impact they could have on performance. It can also help to identify opportunities, giving organisations the foresight to take advantage.

Through predictive analytics, using historical performance trends and giving effect to current market events, we believe we are better prepared to assess future performance. Through correlative data (macro and microeconomic indicators) we can assess predictive performance and, where appropriate, share sensitivity analysis with management and the audit committee.

A KPMG dynamic audit gives our professionals the space to focus on every step of the process, from planning to completion. They can bring their judgment to bear on higher risk areas, rather than being held up in the analysing of data. This broader view means that they can identify trends, risks and opportunities. These insights give organisations the information they need to better anticipate possible futures and to plan ahead more effectively.

A KPMG dynamic audit is no longer just about past performance, it goes much deeper, discovering patterns and making sense of them to generate insights into your current business performance. It isn’t just about reporting back, it’s about enhancing value and giving actionable insights on performance — value and insights that were never achievable before. And because it also looks forward, it provides future insights that help inform decisions that impact management’s decisions about the direction of a business.

Enhancing audit quality continues to be paramount. Through D&A and our dynamic audit, we are not only enhancing quality, we are unlocking the value of audit, going beyond compliance and making audit an opportunity. D&A adds value to audit and furthers confidence in assurance.

Partner, Head of Audit

KPMG in Singapore

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