The future of auditing is coming faster than you think

We’re in a golden age of innovation within the accounting profession, with profound changes coming to all major areas of practice. Nowhere is this more evident than in auditing, where multiple efforts are underway to completely reimagine how auditors conduct their work and provide value to clients and the public at large.

As an example, the American Institute of CPAs — which has been deeply involved in advancing auditing into the future — just passed a major milestone this fall with what is effectively the beta launch of our Dynamic Audit Solution initiative. the DAS project — a collaboration of the AICPA and our technology partner, CaseWare International — involves the development of a transformational audit methodology that modernizes and enhances the quality, efficiency and value of audits. A commercial launch of DAS is coming later in 2021, and several other software and solutions companies are refining their own proprietary products in this timeframe as well.

My advice to firms: This is no time for a wait-and-see posture. No matter what solutions you may ultimately adopt, firm leaders should be preparing for a new era of auditing. Take stock of your team’s strengths and weaknesses. It all starts with changing your firm’s mindset and evolving your strategy, and the time to do that is right now — not down the road when you’re ready to make a technology choice.

Here are some things to keep in mind as you move forward:

• Take the time to do internal assessments. What are your service line strengths and specialties? What’s your growth plan? Does your firm have the right staff with the right skill sets? How technologically savvy is your team? Do they have familiarity with data analytics? Make a plan to build your competencies, fill in weaknesses and have a strategic timetable for migrating to more robust audit and assurance solutions.
• Make sure you have buy-in from stakeholders. The first group you need to convince is your own staff. The evolution of the audit is not just a technology and methodology story, it’s a firm transformation story. You’ll need internal champions. You must set up a detailed training program. And you’ll need clear communication plans, both for your staff and your clients, to explain the coming changes and the new value proposition behind these moves.
• Technology at this level is not plug and play. Once you’ve made your technology choice, you’ll need to conduct a gap analysis of your current resources and have detailed migration plans. Roles should be clearly assigned to make sure every step is done on time. There will be integration and customization issues to address. At CPA.com, we’re developing project playbooks to help firms navigate the process with our solutions.
• Exercise patience after you roll out your new services. Evolved audit solutions will provide immediate benefits but their true power is tied to the vast pools of data that will create benchmarking, refined identification of anomalies, and other key insights once adoption is widespread and the learning aspect of higher-order artificial intelligence can truly kick in. These systems will only get better with time.

Change management is one of the hardest tasks in business, particularly so in complex areas such as the audit. Early planning and strong communication can help your firm get on the inside track to the future.