According to KPMG, modern technological developments are proving a major boon for auditors, with data, technology and increased processing power allowing today’s auditors to pin-point potential risky areas unlike ever before thanks to predictive analysis.
These days auditors can monitor business transactions all year round using data analytics, whereas in the past audits were begun using paper and pen.
According to KPMG’s, D&A leader, Peter Russell, this shift in auditing process has been driven by:
According to Mr Russell, the 2 key advantages of the broad scale adoption of these new investigative algorithms and routines are that they allow auditors to identify outliers and significant movements within data.
“Data-driven audits can mitigate your risks a day by showing back to you how your business is performing against the risk framework that you've set. This changes the relationship between the auditor and the client from a reactive to a pro-active one,” explained Mr Russell.
These new algorithmic tools & analysis technology arm auditors with evidence in the form of hard figures and analytics evidence, giving auditors a much greater and deeper insight into and understanding of, their client’s business operations.
This deeper insight means auditors can engage their clients in a conversation on a more profound level.
“We can drill down into particular transactions to discuss things in a bit more depth than we were able to previously. We’re not just taking this information from you, we’re analysing your information and engaging in a two-way conversation that we've never had before,” Mr Russell said.
Predictive analytics represents the future of audit according to Mr Russell because it aids auditors & their clients to perform pre-emptively in reply to data disparities.