Advanced technology isn’t replacing workers. Instead, when companies use it to complement employees’ skills, it can help workers increase audit effectiveness, make informed decisions, and remove tedious tasks. With the right approach, you can implement tech to benefit your people and your company.
The advent of remote and hybrid work environments accelerated information technology auditing and assurance spending. But don’t worry about losing your job to machines at work; the skills machine learning offers can complement those of humans. Many public accounting firms are still in the pilot stages with advanced technologies. Big Four firm KPMG, for example, invested in augmented reality to enable remote inventory control.
Robotic process automation existed pre-pandemic — the firm implemented AI in 2018 — but as the tech scales, it’s clear that data automation is imperative for landing new business, keeping existing clients, and attracting and retaining staff. In fact, a survey from the firm reported that 98% of external audit firms use advanced tech, with cloud computing, smart analytics, and AI as the top must-haves identified.
Much of this adoption is focused on increasing collaboration or workflow efficiency, while some interesting apps, like AppZen or Concur, focus on isolated use cases like expenses. However, these closed-wall solutions can’t explore risks and issues hiding in the financials as a human auditor can, and it’s time to think about how humans and robots will be working together in the future of audits.
The Rise of Machines at Work
People are naturally afraid of change if they don’t understand the positive impact on their lives, and information technology, auditing, and assurance are the core of any business. The previous Industrial Revolutions introduced automation and robotics, and the dream of any CFO was the word “efficiency.” People thought they needed to work harder in less time, so it’s easy to see why many might be afraid of losing their jobs.
It’s only natural that people respond with fear and apprehension that their jobs could be eliminated or the bar raised too high through RPA and other technologies. Some departments are already feeling the effects of tech integration. For example, automating payables bookings through RPA means all invoices are handled without human hands. While this does in fact reduce the head count needed for that step, the reality is that the automation takes out the manual, tedious tasks and allows for more time to assess the verification, validation, and accuracy of the spend.
Truthfully, technology won’t reduce head counts, but it will automate low-cognitive tasks so existing staff can be more efficient with tasks of higher value. Many businesses aren’t spending enough time reviewing higher value compliance, accuracy, and risk assessments. AI and other technologies can move these mundane things to an automated machine that fuels better human performance with little oversight needed.
Accountants are already in short supply between losing members and low enrollment in CPA programs. By becoming more tech-savvy and adopting new technology, CPA designations will become more valuable and draw more interest, and certification exam success will require a deeper knowledge of primary disciplines, including business analytics and reporting. The dated view of a number cruncher stuck performing repetitive, mundane tasks will be replaced by the same level of cool engineering enjoyed since the dot-com era.
Humans and Robots Join Forces
Although it involves a lot of data, auditing boils down to human judgment and opinions. However, AI can create a guidance system of sorts that increases the effectiveness of the audit, supplementing informed decision-making while removing manual, routine tasks and tests that provide limited value.
- Better decision-making
Today’s technology can’t replace human decision-making, but it can provide better data to formulate those decisions. Modern audit samples analyze a very small percentage of the total data population, and many business leaders and finance executives have made important business decisions using inaccurate financial data. With technology, they could still put human eyes on a small percentage of data — but have radically higher audit quality.
- Streamlined routine tasks
Having a bad system can cause payroll issues that infuriate employees. We saw this in action when angry teachers brought sleeping bags to protest the district superintendent over incorrect or missing paychecks. This problem could have easily been resolved by deploying advanced technologies. Errors or poor systems are not just problems in themselves. They can affect individuals directly. The extensive labor put into correcting those errors can be bypassed altogether by the advanced technology of AI.
AI risk assessments, tests of details, substantive testing, and reconciliation could be done across 100% of the data population to find exceptional patterns for humans to judge. Automation Anywhere, for example, has a Bot Store with plug-and-play RPA bots that can be modified to fit your exact organizational needs, like invoices and purchase orders.
- Efficient inventory
Instead of digging into all the numbers, people will have a bird’s-eye view of all data, performing order-to-cash and procure-to-pay audit procedures only when something goes wrong. And AI computer vision can be paired with extended reality to seek out anomalies. This is the use case of the smart glasses KPMG uses. Smart glasses provide a streamlined communication pathway that enables auditors to complete remote inventory observations as efficiently and effectively as they would if they were in person. From warehouse inventory to RPA reconciliation and confirmations, audit operations can be condensed so humans are focusing on the more important tasks. Not only that, but employees will perform high-value tasks more efficiently and with better data as they automate and refine the audit trail.
Upgrading Your Tech Stack
The future of technology is already here. AI and XR are not new, and the process of implementing them into the audit stack is more refined now than ever. Onboarding is easier, and the technology has advanced significantly in recent decades. Technology isn’t replacing humans — it’s revolutionizing the way they do business, helping them make the smartest decisions possible. KPMG and other Big Four firms are already on the cutting edge, and the longer you take to catch up, the harder it’ll be to do so.
Written by John Colthart.
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