If you're involved in the digital transformation that's shaking up the business from top to bottom, you're likely also upending the neat little world your auditors have lived in. The move to digitize processes, retrain people, refocus job roles, and rely on cloud resources for vital functions means auditors are going to have to throw away their playbooks (they do have playbooks, don't they?) and figure out new ways to assess the health and wealth of their businesses. They have to become savvy IT experts in their own right, and start poking their noses much more deeply into IT processes. These days, auditing types have to look through today's IT systems to determine how well data and access is locked down, how well things are governed, the role of cloud,. That's the word from Protiviti and ISACA, which recently released a survey of 1,323 chief audit executives, internal audit professionals and IT audit vice presidents and directors worldwide.
Technology is also streamlining existing business and audit processes alike. For example, asset verification has been a critical, labor-intensive audit step. Today, Deloitte auditors are using a proprietary application called Icount on their tablets and smartphones to scan and consolidate inventory count results automatically for real-time consolidation and analysis in an online portal. While conducting the count, the auditor can use a voice-to-text capability to create documentation, take pictures of the observed inventory, and generate the audit working papers automatically. Another benefit of innovation for private companies involves performing competitor analysis and identification of leading practices.
When state Auditor Elaine Howle told a joint legislative committee this month that University of California central administrators had amassed a $175-million undisclosed surplus, paid fat salaries and interfered in her audit, lawmakers cried foul. One compared UC administrators to corrupt officials in Bell. Another called for UC President Janet Napolitano to resign. Some wanted to know whether UC officials had committed any crimes and should be subpoenaed. But UC regents struck a markedly different tone when Howle came to talk to them about the audit Thursday.
The advent of audit analytics and cognitive technology does not mean the end of human auditors. It means an end to painstaking checking and crossfooting of debit and credit entries and the beginning of auditing careers that thrive on understanding, monitoring, and improving analytical and cognitive systems. I have worked for a couple decades with professional services firms that perform financial audits, but I have never done one--nor have I ever wanted to do one, to be honest. I'm not good with work that involves structured processes, details, and rigorous checking, and audits always seemed heavily infused with those kinds of tasks. Now, however, I am becoming quite interested in audits for two reasons.