The auditing profession will have to change fundamentally to incorporate information technology knowledge into its standard skill set, if it is to remain relevant in modern society and its business environment.
Technology is having a transformative effect on all businesses, and therefore also on the accounting and auditing professions, which measure performance and provide assurance for the rapidly evolving organisations that drive our economy.
Due to the pressures of South Africa’s moribund growth rate, as well as a commitment from regulators to ensure audit quality, today’s auditors find themselves squeezed from two sides. Clients demand cost-effectiveness, while regulators demand quality. Auditors are increasingly being asked to do more, with less.
This coincides with the rise of financial and audit technology that can facilitate and improve the service and effectiveness that auditors can offer. Automation and machine learning can enable previously unattainable levels off assurance.
Where before, auditors might only audit on a sample basis, technology-enabled audits now allow 100 percent testing. This provides vastly better assurance and decreases risk.
However, adding efficiency through technology does present its own auditing challenges. Many clients believe that because they’ve automated many of their processes and operations, the auditor’s job should be easier. This is not necessarily the case.
It’s worth remembering there is little standardisation in the automation space. Every system is different. The report documents that emerge at the end might look similar, but an effective auditor needs to understand how those documents are produced.
Gaining that understanding requires an IT perspective.
Currently, an audit often involves two separate teams – the audit team and the IT team. Information Systems Auditor (ISA) might be contracted to assist the main auditors and to provide reports to them. But going forward, that line will start to disappear. The audit will have to be done as one team, with auditing and IT skills.
Ultimately, the auditor and the Information Systems Auditor might be the same person. Someone looking to future proof themselves in the audit profession should look at gaining increasingly useful programming and infotech skills.
It is becoming clear that technology doesn’t just help professionals to do their jobs. It makes those jobs more complex in other ways and requires new skills.
All of this is not to imply that humans will one day be phased out of the auditing space altogether, by automated “auditbots”.
Auditors will have to remain as vigilant as ever, as technology arrives – perhaps even more so, as automation makes teams even smaller.
At the very least, there will remain a need for an auditor to evaluate the information supplied, another person, with a fresh set of eyes, to sign it off, and perhaps a partner to look at things from a strategic perspective.
There is a certain risk involved in centralising audits in small teams enabled by technology. Someone who has a healthy cynicism can still be a useful part of the process.
Technology is certainly helping to improve the effectiveness and efficiency of audits, helping companies with their compliance and giving them a clearer idea – in real time – of where they stand in accounting terms. As we move forward, there be a need to identify what level of human involvement we need to do this most effectively.
The human factor remains valuable, and we should not run willy-nilly towards automation at all costs. Technology is a tool to assist people – not a replacement for the human factor. In this context, the humans most likely to remain part of the process will be those that equip themselves with the right skills to work with technology.
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