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AUDIT & ASSURANCE

Alan Anderson: Applying JIT Concepts to the Audit Process

Reduce audit time by 20% without reducing quality.

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By Alan Anderson, CPA
Transforming Audit for the Future

For most audit firms, the concept of “just in time” means that the audit was completed and the financials were delivered “just in time” to meet the deadline. But in this webinar, Alan Anderson explains how concepts from just-in-time manufacturing can be applied to make audits more efficient, reducing time by at least 15-20% while also improving quality and customer service. 

 

MORE ALAN ANDERSON: Are You Using the Right Business Model? | Give Advice While Remaining Independent | The New Formula for an Accounting Business | Don’t Risk Losing Good Employees for Bad Clients | Four Questions to Make Your Firm More Successful as a Business | Say Adios to Audit Fee Pressure | Deliver More Audit Value by Getting Out of the Conference Room | Six Essential Elements in Audit Planning | Before the Audit: More Than Just Planning | Five Crucial Attributes for Successful Audit Leadership | Put the Ethics Code to Work for Your Clients and Your Firm | Is Audit in Crisis Because of Definitions?
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Just-in-time manufacturing was devised to reduce inventory costs, downtime, and waste by following four sequential steps for every manufacturing process: design, build, inspect, and delivery. By analogy, the four steps of JIT manufacturing correspond to the four audit phases of planning, fieldwork, review, and delivery. The raw materials of an audit consist of the trial balance and schedules supplied by the client, and the final deliverable is the audit report.  

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AUDIT & ASSURANCE

Make the Best Use of Technology

hand pointing to Gantt chart

Two questions to ask when choosing new tools.

By Alan Anderson, CPA
Transforming Audit for the Future

For years, as I go around firms all across the country, I ask them, “Do you honestly feel that you’ve achieved a substantial return on your investment of technology in the audit?” And they tell me, “Well, we’re now at three monitors in the field.” I remind them that I didn’t ask about their use of computers and peripherals. Every firm is using technology, but few evaluate the return on investment they’re getting.

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I’m a huge believer of embracing technology, but I think we need to think differently about how we use it. In my view, the current state is nothing but tremendous opportunity for all of you to learn what all these new tools, from Mindbridge to Inflo and everything new that we haven’t even conceived of yet, can do. They all accomplish an objective. It’s just a matter of figuring out which one you want to do, and go and dive in.
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AUDIT & ASSURANCE

Move from a Balance Sheet Orientation to a Data Orientation

Woman in white office meeting with man

Rather than rely on sampling, you’ll use technology to find all the needles in the haystack.

By Alan Anderson, CPA
Transforming Audit for the Future

Most auditors have grown up their entire career with a balance sheet orientation. “I can audit any balance sheet,” is a common defense against making any of the changes needed to move into the future. It is not an easy task to think about a data-driven orientation.

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But the amazing part of moving to a data orientation is that it deepens your understanding of your client. You understand how data moves through their systems, a perspective you cannot have if you just look at the balance sheet. You start asking your client deeper questions, so you understand what these transactions do. I’ve had partners tell me that after they work with this data-driven approach, they’re embarrassed by how little they previously knew about their clients. Conversations with your client are more profound, more valuable and more relevant when they focus on the KPIs specific to a client and their industry.
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AUDIT & ASSURANCE

Six Questions to Ask Before Innovating

man with hand on chin, looking at computer screen

Hint: Jumping in with technology is NOT the solution.

By Alan Anderson, CPA
Transforming Audit for the Future

“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” – Albert Einstein

Innovation means doing things differently and doing different things. But what does that mean in practice?

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I see audit firms around the country who set up “Innovation Teams,” or appoint someone to be the Chief of Innovation. The problem is that if these are home-grown teams, or if no one on the team has ever had any experience working with anything other than a traditional audit firm, at best, their efforts will be like moving around deck chairs. Many of these Chiefs of Innovation don’t have an innovative bone in their bodies, and they don’t know what they don’t know. All they know is the old way of doing things.
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AUDIT & ASSURANCE

The Risks of Not Innovating in Audit

hand below light bulb

Technology is moving quickly. Are you keeping up?

By Alan Anderson, CPA
Transforming Audit for the Future

Auditors, like most accountants, tend to be conservative in nature. We tend to be reluctant to change unless we’re on a burning platform.

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As I’ve said before, audit is at a crossroads. We can continue the way we’ve been doing audit and will likely go extinct. Or we can make changes that will keep audit relevant and valuable for the next generations.
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