Last week, we reported on Withum’s six best practices for creating effective audit teams. Today, let’s discover how the firm used audit technology to improve realization and deliver quality audits. Specifically, why Withum adopted Wolters Kluwer’s Integrated Audit Approach. And now that they have integrated solutions in place, what advice they’d give other firms.
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Wolters Kluwer’s Integrated Audit Approach
Withum began looking for a new solution to increase audit quality and improve profitability by increasing audit efficiency. Previously, Withum had used an engagement solution and practice aids from different vendors. This caused inefficiencies and disruption in the audit workflow. Therefore, when partners Jim Bourke and Brad Caruso learned about Wolters Kluwer’s Integrated Audit Approach, they saw the wisdom in it right away.
By focusing the audit process on auditor judgment, Wolters Kluwer’s Integrated Audit Approach:
- Covers the entire end-to-end audit workflow
- Maximizes auditor efficiency
- Guides firms to higher quality audits
- Helps firms avoid over-or under-auditing
To begin with, Withum already used CCH® ProSystem fx® Engagement to manage client binders, workpapers, and trial balances. In fact, the firm was already generating extra efficiency with this paperless audit workflow. Even more, the firm wanted to add an integrated, risk-based audit solution.
Choosing Risk-Based Audit Methodology
Withum selected CCH® ProSystem fx® Knowledge Coach due to its risk-based audit methodology and tight integration with Engagement. Prior to implementing Knowledge Coach, Withum relied on a checklist-based approach to auditing. However, firm management found the checklists were an inefficient approach to satisfying the AICPA’s risk-based standards. Although auditors marked some checklist items “not applicable,” reviewers sometimes found them applicable. Further, the firm was running through many items each year that were not tailored well enough to each client’s risks.
In contrast, the Knowledge Coach solution was designed based on a Knowledge-Based Audit (KBA) methodology. This approach helps auditors plan and produce higher quality audits. The KBA methodology encompasses the end-to-end audit workflow, including:
- Pre-engagement procedures
- Client risk assessment
- Evaluating internal controls
- Assessing risks of material misstatements
- Designing audit procedures
- Performing tests
- Evaluating, concluding, and reporting.
The Benefits of CCH® ProSystem fx® Knowledge Coach
As a result of implementing Knowledge Coach, the Withum audit team quickly realized several benefits :
- Firstly, it created an automated audit workflow that helped auditors move through planning more quickly
- Secondly, it helped auditors tailor audits to each client
- Thirdly, it created automated linkages between risks and program steps
- Fourthly, it advised about missing items or documentation
- Finally, it tracked management reviews and signoffs
As Brad Caruso explained, “from a documentation standpoint, Knowledge Coach is fantastic because it really provides that essence of what auditing is, and that’s auditing to risk. We’re very concerned with quality control and peer review. If you look at Knowledge Coach and what it’s built against, it follows the peer review checklist.”
Quality Audits Lead to Long-term Advantage
As a result of implementing the Wolters Kluwer Integrated Audit Approach, Withum enjoyed efficiency gains that improved realization on audit work. And the tighter audit workflow yielded process improvements that got partners engaged earlier, driving additional audit quality.
From Jim Bourke’s perspective, in both small and large accounting firms, client satisfaction and competitive advantage depend on producing quality audits more efficiently. Integration between Engagement and Knowledge Coach streamlined and automated audits and reconciliations at Withum. Additionally, he shared that “We are well‑positioned for the future, largely as a result of the technology solutions we are using—especially Knowledge Coach.”
Download your complimentary copy to read the full Withum case study, including seven tips for transitioning to new audit technology.