“When considering the urgency with which businesses must invest in new tech to compete for market share, remain relevant and stay compliant, there are still numerous challenges in applying business analytics within an organisation to risk manage. These may span the timing and acceptance of new technology in the workplace, the lack of technical skills in using analytics, data security issues, the integrity of data, deliverability of pertinent information on time and addressing of complex issues.
Malik asks Adam Page, Lead Director Analytics & Modelling, Deloitte UK and Jaap de Waard, Head of Business Development Europe and Middle East at CaseWare International if analytics can facilitate audit teams to steer clients into avoiding business disaster?
Page says: “Within the industry, analytics are being used, yet we’re not really putting into play predictive analytics to forecast a result, nor fully assessing at the moment what difference there will be to decision-making, by using machine learning.
“I think for most people algorithms are still very much like a Black Box. As an auditor, what we cannot have is a business saying, well, we made such and such a decision ‘because the box told me,’ nor equally can we say that a ‘going concern’ passed, because we put our results into a clever computer, that told us all was fine.”
CaseWare International is currently involved in the Dias Project with US distributor, CPA.com which is the commercial arm of the AICPA (American Institute of Certified Public Accountants), the standards centre for the region. AICPA has published a new Guide to Audit Data Analytics, intended to encourage auditors to voluntarily make more use of technology-based audit data analytics.
De Waard explains: “For this project, we brought together some of the brightest people in the profession to really think about Audit’s future. They want to make it all about technology and we are committed to going back to the AlCPA if needs be to ask for standards to change, to make way for that technology.
“I see AICPA has a four-year horizon; one year has passed and I think we will see some incremental products but let’s just say that in terms of, ‘The Audit of the Future’, we will aim for it to happen in four years’ time.” globaldata.com