Simply put: Opportunity. Many firms are performing quality audits and are making great strides in utilizing technologies and tools to continuously adapt audits. But there's a tremendous opportunity to go even further, particularly when it comes to the financial statement audit methodology, which has remained largely unchanged for many decades.

Historically, firms followed a linear, SALY (same as last year) approach which means they would look at last year's file, and then look at this year's data, and try to figure out if anything has changed. Today, technologies are enabling the analysis and storage of large quantities of data in the cloud, allowing firms to truly leverage data analytics to drive auditor actions and steps throughout the process. The end result is not only a more efficient audit (as auditors are spending time on the areas that matter) but also a higher quality audit as auditors are able to leverage the data to deliver deeper, more valuable insights to clients.

Many firms have been investing heavily in the adoption of new technology-enabled approaches to the audit. However, the level of investment required to custom-develop solutions can be cost-prohibitive. Leaders from many of the top 100 U.S. firms expressed a need for a fully integrated audit workflow solution to help firms better leverage technology in the audit space. This feedback was the impetus for the Dynamic Audit Solution (DAS - a collaboration between the AICPA, CPA.com and Caseware International, in partnership with leading audit practitioners, to re-imagine the entire audit process from the ground up).

Through this unique partnership, DAS was developed by the profession for the profession, and offers CPA firms an unprecedented opportunity to digitally transform their audit practice and elevate client services to new heights. DAS is a technology-enabled, all-in-one, audit workflow tool that is fundamentally shifting the way firms are approaching the audit. Instead of following a linear, checklist-based process, DAS supports a data-driven approach that incorporates data analytics throughout the entire process, in an iterative way, to identify, assess and respond to risk. The DAS data-driven methodology ensures that auditor time is spent on the areas of the audit that matter most. This not only enhances the efficiency of the audit, but also the efficacy as auditors are freed up to focus on the most relevant risks and insights gleaned from the data, enabling them to have more meaningful, robust conversations with clients.

Key features of DAS include:

• Transformative AICPA methodology Guided methodology is built into the application. The imported client data and information about the client documented by the auditor is used to help auditors identify risks and the most relevant response(s) at the appropriate time(s).
• End-to-end, all-in-one solution DAS is a complete end-to-end audit workflow tool, eliminating the need for separate applications and tools to support different aspects of the audit process. This simplifies the audit process by providing auditors with a single platform to work from, which can improve collaboration among the audit team and enhance the efficiency, consistency and quality of the audit process. Having a fully integrated solution also allows for more timely and effective use of data and analytics, which is embedded throughout the DAS audit, as opposed to being a separate, isolated activity performed outside of the workflow.
• Improved risk assessment DAS has built-in, integrated analytics to enable auditors to identify and respond to relevant risks through every stage of the audit from beginning to end – starting with Understanding the Entity and its Environment through Risk Assessment and Response to Conclusion. This enables DAS to dynamically provide suggestions to auditors on how to respond to identified risks as the audit engagement progresses, helping to inform auditor judgment in real-time.

When thinking about audit transformation, it’s helpful to differentiate between the two parts of a transformative audit solution - technology and methodology. The OnPoint Suite is a comprehensive, cloud-based suite of applications built on the Caseware Cloud platform that bring together embedded methodology, engagement management, automated financial statements, data analytics, and client collaboration in a single package. Developed in partnership between the AICPA, CPA.com and leading practitioners, the suite is designed to support firms in transforming their audit and assurance engagements. By leveraging data-driven methodologies, guided workflows, real-time collaboration, and robust data analytics, the OnPoint Suite enables greater efficiency, enhanced quality, and delivers increased client value. The following applications are part of the OnPoint Suite:

• OnPoint DAS: Designed to enable greater efficiency, improved quality and enhanced client value through transformative AICPA methodology and guided workflows, real-time collaboration and robust data analytics. DAS is a reimagined audit methodology that is risk-focused and data-driven. See question #2 for more details.
• OnPoint Audit: An end-to-end audit solution, built with assistance from a top US firm, that is powered by automation, analytics and real-time collaboration modules to enable efficient, high-quality audits. OnPoint Audit follows a traditional audit methodology
• OnPoint PCR: Enables consistency of procedures and adherence to professional standards, reduces likelihood of over-working PCR engagements, and facilitates improved leverage by enabling confident delegation of work to staff with guardrails to prevent non-compliance.
• OnPoint EBP: Supports the audit of employee benefit plans (including 401(k), 403(b), defined benefit, and health and welfare benefit plans) through guided methodology that facilitates completeness and consistency of procedures, comprehensive standardized testing & sampling templates, and built-in diagnostics that direct auditor attention to non-optimal answers requiring further review.

We’ve been working closely with the select firms who have been using DAS in live audits, and the feedback from audit staff at all levels has been extremely positive.

One of the key pain points auditors have typically faced within an audit engagement stems from the need to access and analyze data from disparate systems that don’t interface with each other. This requires a considerable amount of manual work and increases the risk of errors. What excites firms about DAS is its seamless integration of information into a single platform, alleviating a significant burden for staff. DAS streamlines workflows and enhances overall efficiency by enabling the auditor to stay within that one platform to complete their job.

Additionally, DAS makes the audit process much more engaging for staff by eliminating the mundane data entry tasks and enabling them to focus on using data to support meaningful risk assessments and deliver deeper insights to their clients. The guided methodology is particularly beneficial for early career staff as it accelerates their upskilling process by helping them to understand the “why” of what they’re doing in context throughout the audit process, instead of simply filling out checklists and performing the same procedures based on the previous year’s audit.

We recognize the importance of industry content, and our goal is to integrate it into the tool as expeditiously as possible. The first commercial release in 2023 includes Commercial and Construction industries. Nonprofit, Real Estate, and HUD are expected to be released by the end of 2023. State and Local Government (SLG) and Single Audit (SA) are expected to be released Q1 2024. The remaining industry roadmap is in process and will be released at a later date.

Migrating to a transformative solution like DAS is a very exciting and important step in a firm’s audit transformation journey. As such, it will require strong change management and support from leadership to successfully adopt and implement it. Depending on where your firm is in its transformation journey, it might be more appropriate to consider implementing one of the other solutions in the OnPoint Suite first, such as OnPoint PCR, OnPoint EBP, or OnPoint Audit.

Once you’ve determined that DAS is the right solution for your firm, there are several steps you’ll need to take before beginning migration. These include:

• Assess your business processes and workflows and perform a gap analysis between your current state and DAS. This will help determine the implementation plan that is right for your firm's size, infrastructure, culture and technology. CPA.com offers multiple levels of hands-on implementation assistance based on your needs.
• Evaluate the skillsets of your team members to identify champions who can help lead the migration and change management. Strong auditors who are excited about innovation and change make great champions and will serve as your DAS implementation team when you begin migration.
• Transition to a single taxonomy. DAS follows a single taxonomy, so making this adoption now will make the transition smoother.

By performing these steps in advance, firms will be better prepared to transition to DAS.

CPA.com, the AICPA and Caseware International have developed a breadth of live and self-study CPE learning for applications within the OnPoint Suite, including OnPoint PCR, OnPoint EBP, and OnPoint Audit.

OnPoint DAS training is currently being developed and will be available in Q3 2023.

CPA.com also offers migration and implementation services. The Implementation Support service leverages an effective 5-step framework to help firms achieve positive, successful outcomes. It offers multiple options depending on your firm’s needs. Some firms have internal professionals equipped with the necessary expertise and skill sets to dedicate to this initiative, while others may not have the same resources and capabilities - CPA.com can provide customized support at the appropriate level for your firm.

For more information on available training and implementation services, contact Susan Assadi at Susan.Assadi@hq.cpa.com

DAS offers a financial statement audit methodology that is standards compliant; however, the DAS methodology is by no means the only acceptable financial statement audit methodology. As with any audit methodology and audit workflow tool, firms are responsible for following the methodology and employing the tool in a manner that is in accordance with professional standards and guidance. How a firm does so will impact the results of its peer review, including the report rating. Like other third-party methodology providers, DAS and OnPoint solutions will be evaluated by independent, qualified third parties.

Contact Gord Atkinson at Gord.Atkinson@caseware.com to learn more about the OnPoint Suite, including pricing information.