When the AICPA issued Risk-Based Audit Standards years ago to better address audit risk, KCoe-Isom, LLP saw an opportunity to re-engineer its entire auditing process. What they looked for was an automated solution that adhered to the standards and simultaneously streamlined the audit process. What they found was Wolters Kluwers CCH ProSystem fx Knowledge Coach. In fact, this Chico, California based location became one of the first firms to evaluate CCH® ProSystem fx® Knowledge Coach as a potential solution.
“When the Risk-Based Standards originally came out, we felt it was important to analyze our entire audit process to identify areas for improvement”, explained Bryce Gibbs, a shareholder at K•Coe Isom, LLP responsible for information technology at the firm. “We had a sense that we were over-auditing, but our previous solution provider did not give us a clear way to assess by how much or to link audit steps to specific audit risks. As a result, auditing staff had no way of seeing how audits changed after new audit risk assessments were made.”
Enter a GPS for Auditors
Wolters Kluwer’s powerful Knowledge Based Audit (KBA) Methodology is what initially attracted the firm to Knowledge Coach. Here is why. The KBA Methodology starts each audit with a clean slate, and then adds necessary steps for all identified audit risks. That is how Knowledge Coach provides a clear line-of-sight between audit risks and audit steps. By focusing on the flow of information, the KBA Methodology improves communication between audit team members and enables ongoing assessment. Shareholders and staff alike praised Knowledge Coach’s streamlined digital audit process. And from that feedback back in 2011, the firm decided to roll Knowledge Coach out to its Governmental, Health Care, and Non-Profit practices. They also began conducting all retirement plan audits through Knowledge Coach as well.
“Our initial trial of Knowledge Coach helped us generate a higher quality audit file overall,” said Gibbs. “Over-auditing is no longer an issue, and our audits are tightly tailored to the standards and to each client. The fact that information is flowed throughout the workpapers has also improved audit accuracy and ultimately resulted in less time required to perform each audit.”
Time Savings in Every Direction
With CCH® ProSystem fx® Knowledge Coach, the results from each audit stage flow directly to the Communications Hub. That allowed team members easy view of summaries, audit risks, and findings. How was that beneficial? Senior staff could monitor progress more effectively, and new staff could get up-to-speed on engagements quicker and easier. For example, one of the firm’s engagements typically took 747 hours. Performing the audit using Knowledge Coach, however, the engagement came in at 665 hours. That is 82 hours under budget! Here is where the firm saw savings:
- 75% reduction in preparation time thanks to Knowledge Coach’s ability to roll over audit steps from the prior year.
- 30% reduction in time spent performing internal control tests.
- 30% reduction in updating understanding, compared to audits performed before Knowledge Coach.
“After the first year of using Knowledge Coach, we saved at least as much time as we spent implementing the solution, since we were able to roll everything over to achieve even greater efficiencies in year two.” explained Gibbs. “We definitely streamlined our planning and review process, and we felt sure we would achieve even more efficiencies over time, which we have.”
Make Audit Risk Course Corrections On-the-Fly
Additionally, the firm found that Knowledge Coach offers course corrections on-the-fly during an audit. That convenient functionality was not possible with other solutions under consideration. For example, when adding a new audit risk uncovered during the audit, Knowledge Coach automatically prompts the user with new diagnostics stemming from the newly added audit risk. Then all updated information automatically flows through tp all relevant workpapers. That, alone, sets Knowledge Coach apart from other solutions that require time-consuming, manual updates.
“In one audit, we were not able to rely on information that we thought we would have going in,” explained Gibbs. “With Knowledge Coach, we were able to modify the audit based on the information we had and easily document our change of course and the reasons behind it. That would have been much more difficult and time-consuming prior to Knowledge Coach.” The firm has achieved other unexpected benefits using Knowledge Coach, as well. “When our staff finishes auditing with Knowledge Coach, they say that they learned more about the client and their business than they ever knew before,” explained Gibbs. “Knowledge Coach gives us a more complete audit file. Our staff sees the big picture and knows exactly what audit steps are connected to which audit risks.”
So, follow KCoe-Isom’s example! Learn the best way to take better control of your audit process. Are you ready? Then read our e-books 5 Tips for a Quality Audit and 5 Ways to Improve Audit Reviews. In addition, to follow the directions from the GPS for auditors exactly, sign up for a Knowledge Coach demo today!