Auditing’s solid significance in a digital world

Through the years, the auditing landscape has evolved, adapting to technological advancements that shape new standards within the industry. In the midst of these changes, nonetheless, auditing professionals continue to play a pivotal role in ensuring financial integrity and transparency.

Auditing is among the sectors that have best optimized technology capabilities. According to a report from the global professional services firm KPMG, technology transformed financial and data reporting, analysis, and insights, leading to higher quality and more accurate audits.

Before, the role of audit professionals focused primarily on traditional tasks, which involved paper audits, writing reports, visiting clients and reviewing companies’ accounting reports. At present, technology has significantly advanced financial and auditing management. It now streamlines auditing tasks, extracts data, tracks real-time data, and utilizes data analytics for audit transactions.

More recently, artificial intelligence (AI) has made its way to the auditing industry, further revolutionizing auditing practices and the financial reporting ecosystem. It is now being integrated into audit processes and financial statement analyses. It has been cited for helping analyze large datasets, detect material misstatements, gain more relevant insights, and improve audit accuracy and efficiency.

Automation is also streamlining repetitive tasks and improves audit quality, while audit management platforms enable real-time monitoring, and other big data tools which are designed to simplify data and information.

With digitalized auditing, the role of internal and external auditors expanded to managing control processes, detecting risks, safeguarding data integrity, strengthening cyber resilience — all while ensuring regulatory compliance and adhering to international standards.

“Today, there’s a lot of technology involved,” Regula Tobler, auditor and partner at KPMG Switzerland, was quoted as saying in a media interview. “We can extract the data from client’s systems. The technology — data analytics, to be exact — does a lot of work. We do the analytics and that allows us to really focus on the more critical transactions. Some of that has been outsourced to shared service centers, for example. The job description is very different today. The one thing that hasn’t changed is that we’re still at the client site.”

As the demand for greater audit services increases, so does the need for skilled auditing professionals who enable and adhere to transparency across systems. While digital has permanently marked its spot on auditing, the skills of auditors are deemed as significant as these advancements are. Their expertise allows them to effectively navigate the digital landscape as they interpret data, address risks, and provide expert opinion in audit management.

Auditing, even in other sectors, is equally important and attractive. It goes beyond numbers; it also teaches professionals the knowledge and skills about financial management, tax, and the law — which are all fundamental in business operations.

“Auditing is definitely not going to become so redundant or irrelevant. I don’t see that happening at all,” Peter Leibfried, professor at the University of St. Gallen and director of the Institute for Accounting, Control, and Auditing, said.

As a business of transparency and information, he continued, this profession necessitates human touch and expertise. It needs a lot of emotional intelligence and excellent client relationships to work.

Combined with digital solutions, evolving frameworks, and data-driven approaches, auditors are expected to remain relevant in the following years. Digital auditors are seen to benefit businesses, bringing accuracy, efficiency, and transparency in business operations, particularly in audit management, risk management, and compliance reporting.

“[On what the profession will look like in 10 years], I think it’s going to evolve in a lot of things, including content, ESG (environmental, social, and governance framework), and working with data. You always need people in leadership and positions. Business, [and] the economy, is something that happens between people, not between the random computers or artificial intelligence,” Mr. Leibfried said. — Angela Kiara S. Brillantes