Accounting

Insights, Analytics Driving External Audit Changes


by FEI Daily Staff

Using advanced analytics to provide deeper insights is among the forces prompting evolution in external audits, according to a new survey.

A third of the respondents to a KPMG/Forbes Insights study say the external corporate financial audit needs to go beyond certifying numbers, with 58 percent saying technology is transforming the profession and how it operates.

With advanced analytics tools and Big Data technologies making significant inroads into companies, 80 percent of the survey respondents say access to more sophisticated analysis will be the most important benefit. Along with improving insights and the quality of audits, respondents believe data and analytics capabilities will make the audit process more efficient.

"As companies embrace data and analytics in their financial reporting and growth strategies, the types of controls and risk assessment needed are evolving," said Scott Marcello, KPMG's vice chair of audit, in a statement. "This is just one example of how technology and digitization are impacting our role as auditors. The audit profession is already changing to meet this new landscape."

The report also considers other benefits of innovative technologies in the audit profession, such as helping organizations enhance their risk management capabilities and promoting a better understanding of their financial performance, operational concerns and controls environment.

Other survey findings include:

  • Culture (66 percent) and the regulatory environment (59 percent) are seen as the biggest challenges to enhancing the role of the audit. These two factors are intertwined, as audit regulations may promote a process-oriented working environment that resists change initiatives.
  • Auditors need to be more proactive attitude to provide deeper insights (50 percent), quality (48 percent) and value (41 percent).
  • A trio of skills are essential for future auditors: experience in the client's industry (52 percent), investigative financial skills (52 percent), and critical thinking (42 percent). Underlying these is the need for adaptability, which is indispensable in a profession based on learning and change.