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AUDIT & ASSURANCE

What Will Innovation in Audit Do for Your Firm?

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AI, blockchain and other technologies elevate our responsibility to understand what these tools are telling us.

By Alan Anderson, CPA
Transforming Audit for the Future

“The only thing we know about the future is that it will be different.” – Peter Drucker

A big challenge for firms has always been change management. We’re all used to doing our work the way we’ve done it for years. Many auditors learned to audit by looking at last year’s workpapers and repeating that approach, but with this year’s numbers. So when I tell groups of auditors that the way we’ve been auditing since the dawn of time will have to change, there’s pushback.

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Change is hard. No one wants to change unless that change will bring significant, measurable results. Implementing just one or two of the ideas I have discussed in my posts can be uncomfortable and unfamiliar. Innovation takes most auditors way outside their comfort zone. But change is also essential, unless we’re all willing to see our profession go the way of the dinosaur.
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AUDIT & ASSURANCE

Put People without Degrees on Your Audit Team

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Plus best practices for year-round and remote audits.

By Alan Anderson, CPA
Transforming Audit for the Future

Firms these days are throwing technology at audit and calling it innovation. But if you try to roll out too much at one time, that’s a disaster. Your people won’t have any time to talk to the client and figure out what’s going on in the business if they’re too busy trying to figure out how all the pieces of technology all work together.

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A better approach is to prioritize the technology rollouts and cut those in half. Focus on the two or three that are the most important. If you try to do too much, your implementation will fail. A partial implementation won’t get you anywhere. Partial implementations tend to result in complicated workarounds, so the new tech not only doesn’t save time or effort, but it actually makes it harder to get the work done.
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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

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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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