Accounting firms are seeking audit strategies for harnessing technology to work smarter. Indeed, firms can optimize audit profitability by completing engagements more efficiently. Today, firms face a dual challenge to gain efficiency while strengthening audit quality.
Withum Partner and Director of Firm Technology, Jim Bourke, leads his firm’s Technology Niche Practice. As a recognized global thought leader in technology for public accounting, he recently shared some audit strategies in an Accounting Today webinar. Whether your firm audits public or nonpublic entities, Bourke’s advice can help optimize your practice. We’ll share a few of his tips here. After that, you can watch the webinar recording to gather additional insights.
1. Overcome audit pressures with integrated audit workflows
Today, firm managers and staff face increasing pressures during audit engagements. First, the staff feels pressure to get each job out the door quickly. Delays impact the engagement schedule and budget. Second, supervisors stress over client data that isn’t clean or formatted to import into audit software. Third, partners are under pressure to review audits and manage client relationships. Finally, firms face external pressure from audit standards and industry regulations.
Integrated audit workflows reduce pressures by elevating efficiency through technology. Specifically, Withum’s auditors utilize CCH® ProSystem fx® Engagement to manage and organize audits. Additionally, auditors perform risk-based assessments using CCH® ProSystem fx® Knowledge Coach. Lastly, the firm incorporates analytics into every audit using audit data analytics technology, like TeamMate® Analytics.
2. Use analytics for a more data-driven audit
Plan engagements and train your team to have analytics drive every audit. There are two keys to making sure every auditor is empowered by analytics. First, choose an audit data analytics tool that is easy to use, yet powerful. Second, train everyone to use it properly for the types of audits they perform. Furthermore, a tool that helps auditors know when to use tests should enhance analytics adoption. TeamMate Analytics annotates the ProSystem fx Knowledge Coach risk assessment with suggested tests. Additionally, its test library contains instructions for how and why auditors perform each test.
Does your firm specialize in auditing a particular industry or type of entity? In that case, Bourke recommends using analytics to replicate the set of tests you perform across every client engagement within that industry. For example, if you audit not-for-profit entities, there are unique tests required around journal entries. TeamMate Analytics enables easy creation of standard test modules, called Expert Analyzers. As a result, auditors can execute multiple tests at once, assembled from a library of 200+ pre-defined tests.
3. Take charge of the technology adoption process
Bourke conceded that incorporating analytics requires an adjustment, like any new technology. In the first place, accounting professionals get comfortable doing things the same way every year. Consequently, only good firm leadership will encourage continuous learning and a willingness to change.
Unquestionably, firms need to take a top-down approach to change management. With 125 partners, Withum rarely achieves unanimous agreement on new technologies. However, Bourke said partners gather and discuss the impact and value of prospective new audit technologies. They have some healthy debates over the firm’s technology direction. But, once partners make a decision, the new technology becomes mandatory for employees.
A carefully planned rollout of new technology further ensures successful adoption. Further, Bourke cautioned “don’t ever, ever, ever implement new technology within your firm without proper training.”
4. Help audit team members tailor their technology use
When choosing technology for your firm, make sure it is intuitive, accessible and easy to use. However, you don’t have to perform the exact same training for every member of your team. Further, different members of your team may use the same tools differently. For example, an entry-level staff auditor will utilize an analytics tool differently than a partner reviewing the audit results. Thus, while you want to incorporate analytics into every audit, you should tailor training to user types.
5. Hire for technology and accounting skill sets
Auditing technology tools are not hard to utilize if you have the skills. In fact, Bourke believes a lack of skill sets is 40% of the challenge of audit technology adoption. With this in mind, he looks for candidates with dual majors in technology and accounting. “They’re golden to me…They understand the foundation, the financials, and they understand the role that technology plays. Man, I can’t hire enough of those kids in the audit practice today,” Bourke said.
Whereas experienced auditors often resist change, Bourke challenges new hires to question the audit process. He always includes young technology-savvy new hires in internal audit brainstorming sessions. “Add that vibe to the audit—that trained skillset around technology,” he advises.
Audit strategies require technology, people, and processes
Firms like Withum understand using an Integrated Audit Approach improves audit quality. In addition to adopting integrated technologies, including risk-based assessment and audit data analytics, the firm focuses on change management, people, and skillsets as important components of its audit strategies.
For additional insights into audit strategies, please view the webinar recording.