With the emergence of new EU regulations focused on improving market competition and the quality and independence of audit services, the audit industry is undergoing a period of tremendous change.
The new regulations compel companies to change supplier every 20 years and put their audit out to tender every 10 years – with the aim of shaking up long-established relationships between businesses and their auditors.
As a direct result, there is now an increased level of competition for audit work, as firms are forced to innovate and strengthen the quality of their financial reporting to convey value. So, to remain competitive, many firms are now looking towards cloud-based solutions to improve their operational capacity and auditing abilities.
Cloud-based software is quickly becoming a cost-effective, scalable and adaptable solution for auditing firms with varying levels of service requirements. Locating business operations in the cloud means continuous access for both clients and auditors, greater capacity, and reduced costs in storage of paper files.
Advanced computing capabilities can greatly improve auditing productivity, as tasks which would have previously been conducted manually can now be automated. Reducing administration allows auditors to spend more time on evaluating advanced analytics, quality assurance to provide greater business insights and recommendations for their clients.
From the perspective of audit firms, cloud technology imparts a level of process visibility and monitoring previously unavailable, making it easier to see whether teams are meeting key client deliverables and adhering to regulations. The wealth of statistical information combined with data-driven processes, provides detailed predictive analysis and data interpretation for a forensically accurate level of reporting.
With the emergence of a ‘data-driven’ audit, more informed decisions can now be made about where potential risks lie within a business, allowing auditors to offer advisory services to their clients.
However, with any paradigm shift comes complications – risks. As cloud computing is implemented on a broad scale across businesses, there will be a need to reform, re-evaluate and restructure operations to facilitate the transition. Therefore auditors need to recognise the importance of having an integrated platform approach; establishing your platform first, integrating applications second, rather than simply acquiring individual technology solutions as they go.
But just as the realm of auditing changes, so too must the role of the auditor, and undoubtedly, the new face of audit will demand a new type of auditor. The auditor of the future will need to be more analytically inclined to make forensically accurate risk judgements – and even the entry level auditor will need to be familiar with statistics and large scale data management.
A data-driven audit philosophy offers a unique opportunity for auditing firms, professionals and organisations. To discover more about auditing in the cloud, click below to download our eBook.