AUDIT & ASSURANCE

Not everyone needs an accounting degree.

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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Don’t limit your choices to those developed for accounting.

By Alan Anderson, CPA
Transforming Audit for the Future

For years, as I’ve been visiting firms all across the country, I’ve asked 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 these firms that I haven’t asked 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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Technology that finds all the needles in the haystack is better than sampling.

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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“Do you believe that the person who worked with you on this job could run this job next year?”

By Alan Anderson, CPA
Transforming Audit for the Future

Over the last year, we’ve noticed that firms are grappling with a new problem left over from the pandemic: the audit staff who became seniors during COVID-19 missed out on a critical key to success.

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While supervision and review of new staff has never been great, COVID-19 made it worse. Most firms focused primarily on getting the work done remotely and neglected professional skills. Then, firms hired many new people because of the massive turnover.

Now that firms are in their 50th month of busy season, everyone has settled into some form of hybrid. However, most firms still haven’t tried to seriously resurrect the importance of supervision, review and holding people accountable.
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About to jump in with technology? Hold on.

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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