The rules of business have changed. Gone are the days when business leaders had the luxury of time to ponder significant business decisions and make momentous changes to their organizations or processes. Now, businesses are transacting and making decisions practically in real time, which also necessitates that businesses manage risks and leverage opportunities with speed, accuracy and efficiency.

As auditors, we have an unparalleled view of all the aspects of a business — both up-close from an operational standpoint, as well as from a larger perspective in the global business environment. This combination of macro and micro views allows auditors to be well-placed to advise businesses on possible risks. But given the changes in the business environment, it is not enough to simply have a deep understanding of business, accounting principles and regulatory requirements — auditors in today’s digital age also need to adopt a digital-first mindset in order to elevate traditional audits with more digital dimensions.

MANAGING AUDIT DATA
We operate in an age where connectivity is becoming ever more seamless, making the sharing of data among businesses, customers and even governments a standard practice. As connectivity increases, we move into a time where operational, transactional and financial data will eventually reside on shared networks instead of physically with companies. Auditors who can connect to these networks directly and issue audit instructions instantaneously through a secure and dedicated online platform can greatly streamline the audit process. No longer will clients have to manually transfer massive data files and communicate via e-mails — all parties involved in an audit can now manage and view their data on one shared platform or client portal.

In fact, SGV, as a member firm of EY Global, leverages such a proprietary global tool called EY Canvas. The client portal linked to EY Canvas provides live, real-time reporting on the actual status of audit requirements and issues alerts to all parties on any concerns as they occur. This means that everyone from the audit engagement team to a client’s management team are always on the same page in the audit, increasing efficiency, flexibility and transparency. This is particularly useful for companies with a large global footprint since the superior connectivity effectively removes physical boundaries and enables operations to be digitally enabled across locations. Even as a business spreads out globally, auditors can have the flexibility and scalability to conduct an audit regardless of size, complexity or location.

Understandably, such data-sharing platforms also necessitate a greater focus on data security and privacy. The greater challenge and opportunity, however, is in mining the data for valuable insights and information.

ANALYZING AUDIT DATA
The sheer volume of data generated through data sharing platforms can make identifying risks more challenging. Auditors have to develop new approaches to process data and document information, which thankfully, rules-based automation can now handle with ease and accuracy. The advent of technology now allows auditors to focus on areas that require judgment, which makes the case for data analytics-driven audits.

By today’s evolving standards, a high-quality audit is one that can both process and interpret data in meaningful and consistent ways, helping businesses identify anomalies, operational, financial and non-financial risks. This requires a suite of powerful data analytics technologies, such as the array of data analyzers we have with our EY Helix platform.

Why is data analytics so important? First, the high processing speed and capabilities of data processing technologies can cover the entire data population loaded into EY Canvas, rather than the traditional method of random sampling. This complete coverage provides even greater assurance to the people who oversee governance and compliance. Second, by applying data analyzers to comprehensive and granular data, auditors are able to do deeper analysis to uncover new perspectives and improvement areas. Third, data analytics technologies are able to conduct a “continuous audit,” allowing audit efforts to be spread out across the year instead of only during peak periods. This allows an audit that is more efficient and productive, and where clients and auditors can focus on issues rather than processes.

MAXIMIZING AUDIT DATA
With the insights gleaned through thorough data analytics across a seamlessly connected audit data management platform, robotic process automation (RPA) and artificial intelligence (AI) technologies are now applied to further digitize the audit. By using RPA and AI, tedious mundane processes such as bank and accounts receivable audit confirmations can be done without human error. At the same time, digitizing these transactions open the possibility of data analytics providing even more insights and alerts to audit teams for necessary actions. Intelligent automation and AI in the audit process can help filter data or deliver initial findings, which allows auditors to focus on higher value analysis and raise audit quality.

CROSSING THE DIGITAL DIVIDE
At its core, the idea of a digital audit, however, implies more than just using digital tools and technologies in the audit process. A digital audit requires adopting a truly digital mindset, one that embodies seamless project management and drives global audit coordination. Having a digital mindset means developing new attitudes and behaviors that allow auditors — and clients — to foresee possibilities while being increasingly resourceful, innovative, adaptable and open to leveraging emerging technologies to change traditional processes.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Clairma T. Mangangey is a Partner and the Quality Enablement Leader of SGV & Co.