The audit of the future will bear little resemblance to the traditional audit that company owners and directors are accustomed to receiving today. In fact, the way organisations conduct audits will change more in the next 5-10 years than in the last 50 years given the evolution of technology and analytics.
As the world innovates, the audit of the future must also evolve. Data analytics, new technology and access to detailed industry information will all combine to help auditors better understand the business, identify risks and issues and deliver additional insights. The ability to review and analyse entire sets of data, rather than applying sampling techniques, will help bring more confidence to the audit.
Auditors who can successfully deploy techniques that incorporate data analytics into an audit will quickly be accepted as a leading practice. In the future, companies will be able to rely on a more comprehensive approach to identifying issues, which will allow them to provide better insight to directors and board members.
The future of audit will involve looking at broader amounts of data and then applying ‘audit relevant’ analytics that can be used to improve audit quality.
Once auditors embed analytics in their audit, they will be able to examine much larger sets of financial data to better identify issues and analyse trends. As a result, they will be able to provide deeper perspectives on trends. This enhanced perspective should support better decision-making.
Given these evolving capabilities, companies should expect that their auditors will leverage new analytics and technologies that may enhance dialogue with senior management and provide deeper insights.
In the future, the primary success factor for an audit will come when firms can implement on a broad scale data capture techniques and analysis of larger data sets to provide deeper insights that offer new perspectives.
The transition from the traditional audit to the audit of the future won’t happen overnight. Auditors and the organisations they audit will need time to move beyond the traditional approaches to develop a more comprehensive audit that considers such areas as fraud and financial risk and compliance.
Analysing entire data populations will help auditors and their clients deliver more timely and accurate audit conclusions and identify areas of fraud and business risk more quickly.
In a marketplace and regulatory environment that places greater demands on quality and transparency, auditors who successfully incorporate analytics in the audit of the future will be in a much stronger position to help their clients fulfil their responsibilities.
Auditors and organisations who embrace the audit of the future and its potential to transform the entire auditing process will be taking a major step toward helping their organisations adopt a more resilient business strategy.