How to increase audit efficiency & reduce risks in busy season
The landscape of audit is changing. For many this started with the pandemic shifting how everyone operates.Technology solutions, such as Circit’s cloud platform, can help navigate these changes, promoting easier collaboration between clients and teams that are now operating in a hybrid capacity.
In a recent Circit webinar (scroll down to view), our team discussed these changes and demonstrated how technology can be leveraged with optimal efficacy this busy season. We identified five key areas where it can be impactful.
Let’s explore what they are.
We started our webinar with a poll to understand the main challenges for auditors and accountants this busy season. Over 55% of responses indicated that client preparation was the main one.
Client preparation presents the challenge of providing a consistent, replicable engagement process with the ability to scale as a client base expands and diversifies. If we take Letters of Authority for example, in an ideal scenario, these are sent out and stored on one single platform where the client is also collaborating with the audit or accountancy firm.
Within the Circit platform, you can use Signing Docs to send letters of engagement, statements and certificates to clients for signature as well as Letters of Authority, thus creating a standardised, consistent process for all documents requiring signatures.
Consistency is a component that has changed across the landscape of audit, and it still quite often presents opportunities for improvement. Firms that want to distinguish themselves from the competition need to be able to provide this as part of their processes.
Following this, 14% of attendees polled selected resource management as their main challenge.
Resource management is all about your team and the systems and workflows they use to deliver a successful client engagement in a timely fashion. Careful thought needs to be given to how your team is collecting and documenting information and whether this is happening in an efficient, secure and user-friendly manner.
In general the rule is: the fewer systems, the better. Driving and mapping team transparency across multiple systems can pose a risk to efficiency and transparency. That’s why all the most important processes can be done in Circit: so the team can rely on just one system to fulfil multiple functions.
Transparency in engagement
Leveraging cloud-based technology like Circit promotes real time data updates and synergies for improved collaboration within teams. Audit trails and reports on most recent actions taken within the technology provide information on where the engagement stands. Accessing a single data repository to review the entire history of a client engagement will in turn promote higher quality communication with client and team stakeholders.
Having that kind of transparency will create clear audit trails and documentation, which is a goal in and of itself. It can also help set your firm apart from the competition for specific audits or when trying to win new business.
Data collection & analysis
Unsurprisingly, 28% of attendees selected Data Collection and Analysis as their main challenge.
Circit is a directly regulated platform and an AISP (“Account Information Service Provider”), meaning we help auditors and accountants obtain authorisations from their clients to gain access to transactional data and cash balances directly from their bank accounts. With these authorisations in place, audit teams gain the ability to obtain standardised outputs of lists of Verified Transactions from source for data modelling and testing.
The second part is the analysis side. Our customers and attendees wish to minimise manual calculations, moving to larger sample sizes that may even include 100% of transactions.
Quality of engagement
The final topic is Quality of Engagement.
Audit is becoming a time-pressured environment and with the upcoming changes to ISA 240 and ISA 315, firms are increasingly looking to technology to help manage a wide range of client engagements, whilst also allowing audit firms to scale operations for conducting even more rigorous testing to assess the risks of misstatement or fraud.
As previously mentioned, team transparency is an important element that technology can help with. In Circit, we have our Action Area dashboard which is all about delivering a complete holistic overview of each client engagement throughout the audit and post-audit period. We also provide a standardised query list for the team so that communications can happen in a consistent, professional manner. This can also help flag if a client isn’t participating as expected.
In conclusion: the future of audit is here. The historical audit processes of manual, slow and costly workflows are becoming obsolete, specifically due to the increased risk in manual processes and shifts in regulatory requirements.
Entering this new landscape presents an opportunity to create efficiencies and leverage best in class technology to do it. At Circit, our mission is to verify the trusted source in every business transaction.
To see this in action, you can find a demonstration of Circit in the webinar recording below. Or contact us for a consultation specific to your firm and audit needs.