TECH IN AUDIT
TECH IN AUDIT UNDERSTANDING THE (AUDIT) FUTURE Technology is the big story, but there’s more to it as audit is called on to play a bigger role, writes Zakariyya Mehtar, Director: IT Assurance at Forvis Mazars in South Africa. Make no mistake, artificial intelligence (AI) and machine learning (ML), along with other technologies, are going to drive huge changes in business and across society more broadly. Auditing as a profession won’t escape, and auditors and their clients must begin preparing now. At the same time, though, we should be very conscious of the IT industry’s hype cycle, a term coined by leading analyst, Gartner. In the typical hype cycle, a technology trigger leads to a peak of Inflated Expectations followed by the inevitable Trough of Disillusion. From this low point, we see a slower ascent up the Slope of Enlightenment to the sunny Plateau of Productivity. Auditors and their clients will have to be careful about adopting technology precipitately; it is vital to have a proper strategy in place that includes regular assessments of the organisation’s technology maturity, both as regards auditing itself and generally across its business processes. Given the impact of auditing on corporate reputation and regulatory compliance, technology misfires simply can’t be tolerated. For example, while data analytics is relatively mature and well-integrated into the audit process, AI and ML are only now beginning to mature enough to be considered integral to auditing. Given the sensitivity of the data that auditors deal with, overall security and data privacy are key issues, making public AI platforms too risky. An additional issue is the need for the algorithms to be trained on carefully curated datasets to minimise the risk of inaccurate conclusions. Nonetheless, given the research and development spend that is going into AI, the maturation curve looks set to be steep. Change is a constant One clear conclusion, as noted in a study by the Association of Chartered Certified Accountants, is that auditors of the future will need to be, above all, adaptable. Change is a constant, but technology has made it much faster and harder to predict. Data analytics – and now AI and ML – all relate to the proliferation of data generated by organisations and the valuable insights that can be derived from it. For auditing, this trend means raised expectations from stakeholders about the quality of the audit itself, but also about its scope. The expectation was that audit would also begin to offer a forward view as well as a backward one, helping organisations to track trends and identify emerging issues. One of the respondents in the study made the point that clients increasingly want auditors to act more like partners, providing insights that will help them run their businesses better. By enabling a growing proportion of the audit process to be automated, technology will free up scarce audit talent to undertake more sophisticated analysis. In short, clients desire their auditors to take a more holistic view of their businesses and make specific recommendations. What does the auditor of the future look like? Given these raised expectations, the next question we need to ask is what skills auditors will need going into the future. While it’s clear that future auditors will need more technology skills, it’s growing clear that they will need a range of soft skills as well. Communication and critical-thinking skills will become vital because if auditors are expected to derive useful business insights from data, they will need to be able to prioritise them and communicate them effectively. At the same time, traditional skills and characteristics like professional scepticism and independence will remain very much part of the mix. Recruiters will have their work cut out to find people with this mix of hard and soft skills. The upshot is clear enough. Technological progress is raising client expectations of audit partners. The ability to automate more of the process and analyse huge amounts of data means that expectations of audit quality will escalate. At the same time, auditors will have to equip themselves to become more like business partners as well. No pressure. Beware of the hype cycle surrounding new technology, but a proper technology strategy needs to be in place that can assess an organisation’s technology maturity. ABOUT FORVIS MAZARS Forvis Mazars is the brand name for the Forvis Mazars Global network (Forvis Mazars Global Limited) and its two independent members, Forvis Mazars LLP in the United States and Forvis Mazars Group SC. Forvis Mazars Global Limited is a UK private company limited by guarantee and does not provide any services to clients. For more information, visit www.forvismazars.com/za/en 14 PHOTOS: FREEPIK
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