For auditors, there are many benefits in leveraging data analysis to improve audit quality and efficiency. “Big Data,” or large packages of digital information, are used by companies to reveal trends and patterns. However, some firms are in danger of being left behind if they still rely on manual processes to review massive data repositories.
Previously in his blog, Eric Barsky, Senior Product Manager at Auvenir, highlights that “Accounting firms have more financial assurance solutions available to them than ever before – those who have embraced the innovation are positioning their practice ahead of the curve.”
Manual techniques used by auditors traditionally are not able to manage as quickly and effectively as auditing platform software. Previously time-consuming processes, such as analyzing big data, can now be completed regularly and with lightning speed when auditors use an automated auditing platform like Auvenir.
Being able to quickly analyze data with an auditing platform allows auditors to recognize patterns and trends by sharing more than just numbers or text to share depict representations, like dashboards and graphics. As noted by Tim Parker, Chief Technology Officer, Auvenir, in his blog, “Computers can automate a lot of tasks for us, reducing the amount of time spent doing routine and boring tasks. Or at least help get us part of the way there, leaving us to handle the last, complicated bits.”
When auditors are freed from analyzing substantial amounts of data manually, this allows auditors to focus their attention on completing other tasks, such as reviewing anomalies and investigating areas of risk.
For any sized business, data-driven audits result in better and more efficient audits.
Moving Past Excel
For decades, spreadsheet programs like Microsoft Excel have been highly utilized by auditors, but technological advancements are changing and improving how auditors complete engagements. Auditors now have access to specialized tools that help them automate repetitive and manual processes when possible.
As auditing increasingly becomes digitized, the limitations of traditional software tools such as Excel become more evident. There is no question that auditors today need to be able to analyze large sets of data quickly and effectively. With Auvenir, auditors can create analytics from the trial balance data to add power visualizations directly in the engagement working papers, and access summary views to get real-time updates. Data persistence is important for auditors – and having trust in your data and information is critical for all CPAs.
Audit processes benefit in many ways by relying less on spreadsheet programs like Excel, by allowing auditors to leverage automation to create more efficient auditing and monitoring processes.
The Importance of Data Analytics
Conventionally, data analysis has been sourced by auditors by reviewing and sampling data hosted in spreadsheets. But this creates more risk in the accuracy of these analytics and relying on a manual procedure could potentially lead to mistakes if something is missed by the auditor.
When an auditor uses auditing software that has data analytics capabilities, they can test all the entire data sets and remove the threat of potential errors that can occur when your sample size is limited. This results in a higher quality audit and a more thorough understanding of the underlying transactions.
Instead of just reviewing text and numbers, by applying modernized data analytics into the auditing process, auditors can quickly and accurately examine the information with different visualizations. Having data visualizations built into your auditing platform provides a more holistic means to enable further review.
Automate and Accelerate Audit Procedures
One of the main improvements modern data analytics tools have over a traditional spreadsheet approach to auditing is the automation of routine tasks. When you can automate repetitive processes, auditors can deliver a higher quality engagement – resulting in fewer errors entering data manually and less time wasted entering repetitive data entry.
It is safe to assume that we can all agree that time spent on manual processes should be eliminated and reduced when possible. For example, our platform at Auvenir allows relevant data to be pre-populated throughout a file so auditors do not have to spend time entering the same information twice, and it is easily updated throughout the engagement.
This is just one example of how having an automated platform can help improve the quality of an audit engagement.
Big Data Requires Better Accounting Data Analytic Tools