Audit seemed to be a stable and long-evolving branch of business, resistant even to changes imposed by digital transformation. However, when Covid-19 forced remote audits, the market shot forward and it is now easy to get lost in its present intricacy.
The surge of audit digitization is too conspicuous to be overlooked: the expected market growth during 2018–2023 will increase at a CAGR of almost 12% and the size will expand by USD 543.5 million during 2019–2023. COVID-19 is an additional catalyst that has pushed companies towards remote auditing. The emerging market is fast gaining on complexity, so a concise guide may help you find your way around.
Please. Just. Don’t. Use. Excel.
The first thing that comes to mind when thinking about the tools used in auditing is, of course, Excel. Indeed, Excel still remains a default for many specialists, particularly in internal audit. Yet, in recent years its constraints and high riskiness have become painfully noticeable; take for instance Public Health England, which misplaced nearly 16,000 Covid test results due to spreadsheet size limit.
Historical list of such disasters includes much more drastic stories, like the loss of $6.5 billion in JPMorgan Chase due to a copy-paste error. A mistake made by one employee led to a gigantic miscalculation of the credit estimation.
In 2005, Eastman Kodak had to add US$9 million to its third-quarter loss due to a spreadsheet error — someone entered too many zeroes to employee’s accrued severance.
Moreover, the use of Excel in 2021 means missing out on many of the newest developments in analytics conducted on vast databases. And the future of data in the digital transformation age is mostly about huge databases. In the reality of the market game, simple spreadsheet-based audit may soon be pushed to the sidelines.
But how to imagine life without Excel et consortes?
Picking one of the available audit software suites seems to be an obvious solution.
Navigating your options
With so many options emerging today, it’s important to be very clear about your objectives. Above all, don’t get seduced by the next shiny, but potentially inappropriate, tool.
Let’s get straight to the point. These are the key functionalities that Audit software offers:
- Cloud or on-premise hosting
- Specific modules, such as incident management, vendor risk management, cybersecurity breaches, whistleblowing registers, workflows, project management, reporting, and data analytics.
4 big steps to finding the right tool
The following factors break the abundance of audit software into 4 issues crucial for assessing which software suite will meet company needs.
1. Take care of good methodology
The basis of nuanced auditing is simply treating the data as a resource that can be used to harness the full benefits of digital change. Here, the keyword is methodology. The IIA Audit Performance Standards provide a comprehensive outline, including step-by-step specification of the auditing process, as well as constant improvement to the organization’s governance, risk management, and control processes.
2. What do you want to get from the audit platform? The answer to this question will come from clarifying the company’s priorities.
Let’s list the most obvious targets that can be on the radar here.
Efficiency is the instinctive choice as it includes:
- cost reduction
- automation of time-consuming processes
As things go, you will additionally determine what resources will be released thanks to the implementation of audit software.
Will it be saved time, greater productivity, or maybe lower cost of the platform compared to currently used or competing software maintained inside the company’s infrastructure?
What element of the audit process has up till now repeatedly failed, required adjustments, or increased vigilance?
3. What features do you care about the most?
High modularity may be one of the strongest characteristics of the audit market. Each company has its own needs that can be addressed through diverse software. Take a look at the features listed below and note what’s high in your ranking.
If dealing with thousands of audit findings and recommendations is the everyday reality of your company, automation is the first choice. The cognitive resources it will free up are invaluable for innovative analysis.
Is most work in your company performed in extended teams? Then a good workflow is what keeps the machine running. Intuitive and seamless workflows minimize frustration and forced breaks that slow down the business. In a situation of greater complexity, it is also worth considering some project management tools to add scheduling, resourcing, issue identification, and prioritization to manage multiple audits simultaneously.
When the company is stretched between different stakeholders, efficient communication is the king. Tools provided by selected audit software can make it smooth and transparent, especially when various levels of permissions are embedded in the company’s channels. Note that there are plenty more features, including comprehensive libraries, multi-language support, cloud or on-premise installation… you can pick and choose as you see fit.
4. The devil is in the detail: what makes each audit platform different?
Being aware of the significant number of various audit platforms out there, it is worth asking the following questions: will the technology adapt to your specific way of working? Is the interface intuitive enough to be quickly digested by the staff? Trying out a few technologies one after the other brings to light their differences. It is also worth paying attention to whether the audit software is associated with a wider ecosystem, one that includes Governance, Risk, and Compliance (GRC) software.
All of this leads to interesting conclusions. The emerging landscape of audit software can reorient the way we understand audit (and what is audited).
If the direction of digital change is towards progressive data analytics, we can expect that well-chosen software will extract much more from the data than before. It will also change the scope of the auditor’s responsibilities.
Freed from the spreadsheets, audit teams can focus on hunting for new insights and predicting future impact, especially in terms of risk management.
Curious to know more? Take a look HERE to see our guide.