Audit Data Analytics tools can turn large amounts of client data into actionable insights. Including analytics in your audit process helps identify areas of higher risk. Further, analytics can help you focus your testing plan. Also, being able to test 100 percent of data eliminates sampling errors.
Quality-Focused Firms Need Audit Data Analytics
During the past few years, the AICPA advocated for audit quality improvements. Accordingly, they recommend using analytics to gain a better understanding of client entities. In fact, the AICPA finds analytics to be essential for quality, efficiency, and precision.
Our new eBook provides six tips for using analytics in your workflow.
Choose a Highly Usable Tool
Significantly, any audit analytics tool you choose must be usable. Most accounting professionals are fluent in Microsoft Excel. Therefore, a tool that works with Excel will feel natural to your team. Consequently, it will be easier to get auditors to adopt your new solution.
Brad Caruso is a Partner at WithumSmith+Brown, PC. His advice? Stick with an Excel-based tool, like TeamMate Analytics, for ease of use. He said, “The fact that TeamMate Analytics is in Excel makes people more comfortable. A person right out of college can pick it up, use it and understand what they’re doing.”
Ease of importing data is another key factor in judging usability. To begin with, your analytics tool should receive client data in any format. Further, it should quickly transform the information into an Excel dataset. In this way, auditors can quickly prepare client data for testing.
Start by Automating Routine Tests
Enjoy a better return on your investment in Audit Data Analytics. For this reason, automate the manual, routine tests you run on every client. As a result, your auditors will save lots of time right away. Additionally, you will get to see how analytics improve a very familiar process.
Here’s audit manager, Michael Holmstrom’s (Marks Paneth LLP) suggestion for approaching analytics: “Start with the low hanging fruit. Prove efficiencies. Prove that everything in the process is working before you take that deep dive. We started with journal entry testing.”
Use Audit Data Analytics Throughout Your Process
Everywhere you use analytics in your audit will improve quality. In short, you will discover new insights and reduce risk. But beyond quality, you will also gain efficiency. What took hours before can take only minutes with audit data analytics.
“We’re trying to use TeamMate Analytics throughout the entire audit process,” said Holstrom. For example, they perform journal entry, revenue, and cash dispersion testing. Auditors can create risk assessment procedures and visualize data and risk scoring. Additionally, TeamMate Analytics helps test controls, analyze variance, and perform regression analysis. Further, TeamMate Analytics can select samples, test details, and help inform conclusions.
In conclusion, audit data analytics help increase audit quality, efficiency, and profitability. Firms can also add more value and deliver better client advisory.
Choosing a powerful, yet easy-to-use solution like TeamMate Analytics facilitates the process. First, the solution works with Excel and can import client data in many formats. Second, it’s powerful enough to handle datasets larger than one million rows. Third, it contains Expert Analyzers to help firms automate multi-step testing programs. Finally, it includes over 150 tests with guidance and instructions.
P.S. You’ll might also enjoy this similar blog, Getting Started with Audit Data Analytics.