# Digitalisation can be the key to unlocking growth in audit
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-12
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Audit Firms Urged to Accelerate Digital Uptake
Meta Description: Audit firms must embrace digital tools for growth, especially after the impact of Covid-19. Learn how firms are slowly adopting and benefiting from
URL: https://financedigest.com/digitalisation-can-be-the-key-to-unlocking-growth-in-audithtml

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_By_ **_Dr Sung Hwan Chai,_** _lecturer in accounting at Alliance Manchester Business School (AMBS), says audit firms must accelerate their uptake of digital tools as they look to grow._

Digitalisation of the audit industry is long overdue. For many years it has been felt that [audit is lagging behind other industries in keeping](https://www.financedigest.com/auditing-in-cyber-how-organisations-can-keep-track-of-their-data.html "AUDITING IN CYBER: HOW ORGANISATIONS CAN KEEP TRACK OF THEIR DATA") pace with the modern times. But slowly, surely, [firms are recognising the benefits](https://www.financedigest.com/aon-completes-acquisition-of-health-and-benefits-brokerage-and-solutions-firm-admix.html "Aon completes acquisition of health and benefits brokerage and solutions firm Admix") of using digital tools.

The [Covid-19 pandemic](https://www.financedigest.com/demand-for-magnesium-hydroxide-grows-steady-despite-covid-19-pandemic-application-in-wastewater-treatment-key-growth-lever-fmi.html "Demand for Magnesium Hydroxide Grows Steady despite COVID-19 Pandemic; Application in Wastewater Treatment Key Growth Lever: FMI") has been a catalyst for this. All industries became more reliant on [digital platforms](https://www.financedigest.com/de-surinaamsche-bank-expands-relationship-with-fiserv-to-upgrade-core-banking-platform-and-add-new-digital-banking-capabilities.html "De Surinaamsche Bank Expands Relationship with Fiserv to Upgrade Core Banking Platform and Add New Digital Banking Capabilities"), and audit was no different. Many firms had no choice but to embrace the necessary [technology to maintain contact with clients and ensure we could continue](https://www.financedigest.com/how-video-technology-continues-to-boom-in-the-education-sector.html "How video technology continues to boom in the education sector") to do our jobs effectively.

However, it hasn’t led to a meteoric [rise in the use of digital](https://www.financedigest.com/rise-digital-cfo-safe-pair-hands-strategic-shepherd.html "The Rise of the Digital CFO: From Safe Pair of Hands to Strategic Shepherd") tools – recent empirical research shows that uptake has still been limited since the pandemic.

Research undertaken by myself, my AMBS colleague Brian Nicholson and George Salijeni, lecturer at Aston University, has identified small pockets of growing [digital influence within the industry](https://www.financedigest.com/digital-transformation-across-the-banking-industry.html "Digital transformation across the banking industry"). Audit firms are starting to look at digital platforms, beyond those that just [support communications to those that will help them access](https://www.financedigest.com/51-of-brits-support-teresa-may-and-would-grant-access-to-their-personal-communication-and-internet-browsing-history-as-part-of-the-snoopers-charter.html "51%* of Brits support Teresa May and would grant access to their personal communication and internet browsing history as part of the Snooper’s Charter ") and leverage more data sources and streamline their operations.

The potential is huge, not only in improving the current service auditors offer, but also in [creating a mindset that can expand the role](https://www.financedigest.com/banning-russian-aluminium-would-create-uncertainty-about-lmes-role-rusal.html "Banning Russian aluminium would create uncertainty about LME’s role -Rusal") of audit beyond its current function.

**_Development of digitalisation_**

Since 2013, discourse around ‘Big Data’ has provided fertile space to promote the use of data-driven [technology as the industry](https://www.financedigest.com/five-industries-benefiting-from-multi-carrier-sim-technology.html "Five Industries Benefiting from Multi-Carrier SIM Technology") looks to improve the quality of audit and develop the insight audit can offer.

Since then, the drive [towards digitalisation](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION") has largely been led by the largest firms. We’ve seen an [advance in what we call](https://www.financedigest.com/redpalm-enhances-client-engagement-with-vias-advanced-call-routing-solution.html "REDPALM ENHANCES CLIENT ENGAGEMENT WITH VIA’S ADVANCED CALL ROUTING SOLUTION ") ‘Platformisation’ – a strategy for leveraging digital platforms that facilitates interactions between producers and consumers. These have most frequently been developed externally.

The primary [role of digitalisation is to manage](https://www.financedigest.com/does-credit-management-have-a-role-in-retaining-the-loyal-customer.html "Does Credit Management Have a Role in Retaining the Loyal Customer?") and co-ordinate the work of auditors. It creates a trail that is in itself auditable and [enables greater](https://www.financedigest.com/iris-acquisition-enables-accountants-to-add-greater-value-to-their-clients.html "IRIS acquisition enables accountants to add greater value to their clients") oversight of what it is going on. It is also used to facilitate and enhance relationships between audit firms and clients, which was particularly [important when site visits were limited](https://www.financedigest.com/indias-carmakers-back-zero-duty-on-limited-british-imports-under-trade-deal-sources.html "India’s carmakers back zero duty on limited British imports under trade deal – sources") during the pandemic.

But digitalisation has [evolved and isn’t just limited to making our work](https://www.financedigest.com/the-evolving-world-of-trade-finance-optimize-working-capital-with-distributed-ledgers.html "The Evolving World Of Trade Finance: Optimize Working Capital With Distributed Ledgers") easier. The introduction of ‘gamification’, with [digital rewards and specialist](https://www.financedigest.com/b2b-specialist-pr-agency-the-digital-voice-announces-three-key-account-wins.html "B2B Specialist PR Agency The Digital Voice Announces Three Key Account Wins") apps, is also being used as a way of developing passion and interest in the industry and encouraging people to develop new skills. As such, the impact of digitalisation is far-reaching, and the benefits varied.

**_Deepening our_** [understanding of data](https://www.financedigest.com/how-data-visualisation-is-helping-the-insurance-sector-understand-environmental-risks.html "How data visualisation is helping the insurance sector understand environmental risks")

One of the [key applications of digitalisation is of course in our handling of data](https://www.financedigest.com/2023-fintech-prediction-secure-and-private-data-usage-is-key.html "2023 FinTech Prediction: Secure and Private Data Usage is Key"). Between twenty and thirty per cent of all audit hours are spent on interpreting data, so if [businesses can find a way to streamline the process it will have huge benefits](https://www.financedigest.com/5-ways-cfo-and-cio-collaboration-can-benefit-the-business.html "5 Ways CFO and CIO collaboration can benefit the business").

The range of [data available](https://www.financedigest.com/intersystems-announce-worldwide-availability-of-unified-iris-data-platform.html "InterSystems announce worldwide availability of unified IRIS Data Platform") to us now is significantly larger than in the past. Previously many firms were limited to using General Ledger details, which can be quite narrow in what it tells us.

Increasingly [firms are looking at how they can use third-party data](https://www.financedigest.com/sterling-holds-firm-after-uk-jobs-data-muddies-rate-outlook.html "Sterling holds firm after UK jobs data muddies rate outlook") beyond traditional streams, ranging from Openbanking and Companies House, to supplier industry data and data from platforms like LinkedIn.

[Data comes](https://www.financedigest.com/professionals-in-the-finance-sector-say-they-want-their-personal-data-edited-or-deleted-when-gdpr-comes-in.html "Professionals in the finance sector say they want their personal data edited or deleted when GDPR comes in") in so many different formats that it can be difficult to interpret it consistently. Using digital [platforms can help to create a standardised data model](https://www.financedigest.com/aon-empowers-cat-modellers-to-run-any-model-on-its-enhanced-elements-10-platform.html "AON EMPOWERS CAT MODELLERS TO RUN ANY MODEL ON ITS ENHANCED ELEMENTS 10 PLATFORM") with one consistent format, which can make comparisons far more straightforward.

By taking in as much data as possible and transforming it to a standard format, we can [offer deep quality data](https://www.financedigest.com/aon-data-empowers-unica-to-offer-flood-insurance-for-5-2bn-canadian-peril.html "Aon data empowers Unica to offer flood insurance for .2bn Canadian peril") and, moreover, begin to identify relationships between the data. It guarantees more consistency than random sampling methods and means we’re able to rapidly check the consistency of [data and provide factual assurance](https://www.financedigest.com/assurance-v-security-reassessing-responsibility-for-data-assurance.html "Assurance v Security: Reassessing Responsibility for Data Assurance").

**_A vision of growth for auditing_**

Digitalisation is vital not only to improving the quality of audit, but to helping the industry to [adopt a growth](https://www.financedigest.com/venom-foundation-and-hub71-partner-to-accelerate-growth-and-adoption-of-blockchain-technologies-from-abu-dhabi.html "Venom Foundation and Hub71 Partner to Accelerate Growth and Adoption of Blockchain Technologies from Abu Dhabi") mindset. It can enable businesses to be more agile and [open to experiment with going beyond what audit is currently](https://www.financedigest.com/more-than-half-of-workers-are-open-to-leaving-their-current-employers.html "MORE THAN HALF OF WORKERS ARE OPEN TO LEAVING THEIR CURRENT EMPLOYERS") viewed as.

There is a perception that audit is secondary to financial statements, that it is essentially a subset of assurance. But the core purpose of audit is to think differently and using new digital tools can help us to do this.

While much of the progress so far has been led by the larger firms, over time these [digital resources will be available](https://www.financedigest.com/igtb-launch-digital-transaction-banking-available-as-saas.html "iGTB launch Digital Transaction Banking available as SaaS") throughout the industry. The question will be whether they are able to adopt and implement these, and what the possibilities are if it can be done effectively.

_You can find out more about Sung Hwan Chai, Brian Nicholson and George Salijeni’s research, as well as hear from a number of other leading academics, as part of a recent webinar series hosted by Alliance Manchester Business School:_ [_https://sites.google.com/view/audittechnology/home_](https://sites.google.com/view/audittechnology/home)


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