Going Forward with data driven audits!

Going backward is only cool in auditing if you can go back to completed engagements for peer review and know that you have avoided all the common peer review problems. The problem most of you have, though, is that you can’t! Moving forward with a risk-based audit solution that is already available, that you won’t wish you could go back from, is what smart and savvy firms are doing. Do you want to be part of that group? Then, here are a few simple questions to ponder.

What is changing in audit, and what technology is available to help?

There is an awakening in the world of audit. As a profession we must ensure that audits are completed with quality, and in a manner where stakeholders can rely on the outcomes. What hasn’t changed (except only for the better) is technology available to the profession – and that technology is a proactive risk-based audit methodology that guides auditors away from all the common missteps found in peer review! Equally important, this technology is also a data driven approach.  And, Knowledge Coach is the technology! With it you, first, gain an understanding of your client. That increased understanding, then, drives and tailors the entire engagement – which helps avoid under and over auditing.  So, since we are racing to protect the relevance of the profession and avoid using sub-standard tools that will no longer continue to serve auditors into the future, it’s important to remember that this technology is available now.

What is available now, and how will it help?

In 2007, the AICPA issued the new Risk Assessment Standards in response to the collapse of Enron and Arthur Anderson. That collapse put the whole audit profession in question, as it was clear at that time that auditors were not doing their jobs properly. In response, Wolters Kluwer built CCH ProSystem fx Knowledge Coach in direct response to the AICPA risk assessment standards. Key to this solution’s design is this. We followed the content in order to build the solution.

To be sure, audit content is complex and there is a LOT of it. The way that you identify the risks at the company you’re auditing, what those risks mean, and how high/low they are, the vast number of procedures the auditor has to do to make sure they are checking and exploring everything like related party transactions, unusual accounts, processes the company has in place … it’s all very complicated.

Or, so we read. Wolters Kluwer did deep work, though. We worked closely with our authors and because we did this, because we followed the content and designed the workings of our software around the auditing standards, the content was able to come alive within our tool. Truly, it’s amazing to show Knowledge Coach to auditors and witness light bulbs turning on in their minds. For example, the Summary of Risk Assessments blows auditors away. They see how all risks – and steps taken to mitigate those risks – come together in one place. THIS is why we do what we do. To help auditors really UNDERSTAND what they are doing. To bring greater knowledge to the firm and to their clients. As a result, this process makes them more efficient in the long run.

As an aside, a TED Talk from Simon Sinek on understanding WHY we do what we do, not just HOW we do it, is available. Watch it here if you like.   

Conclusion

To continue, over the past several years, we have met many auditors who say, almost in a whisper, “I hate to admit it, but since I’ve started using CCH ProSystem fx Knowledge Coach, with its risk based audit methodology, I finally understand what auditing is all about.” While larger, more sophisticated firms may not admit this, most firms of ALL sizes will tell you that their audit quality is better, their people are more knowledgeable and more confident, and they are more able to talk to real business issues with their clients. To say the least, that’s pretty cool!

So, keep that in mind. As we move toward more robotics and more artificial intelligence, the opportunity that opens up for firms is ALSO to be MORE human, delivering to their clients what robots can’t.

What about the cloud?

Regarding the cloud, not to fear. This same risk based audit methodology is also available in the cloud.  In fact, you can use CCH Axcess Knowledge Coach alongside any of the common workpaper management solutions available in the market.  Learn more about CCH Axcess Knowledge Coach here.

P.S. Also check out this related blog, Choosing the right accounting software package. I’m confident you’ll find it enlightening, too.

AUTHOR

Cathy Rowe

All stories by: Cathy Rowe