What are the major technological anomalies

Alexander Limbach - stock.adobe.com

The coronavirus crisis is providing a boost to digitization in many areas - including the work of auditors. How exactly is the digital future of the final exam? Which technologies shape the development and which obstacles are there? The Big Four house PwC has been investigating these questions regularly for four years, not from the auditor's point of view, but from the perspective of the company to be audited. This time, PwC asked 101 decision-makers from medium-sized and large companies.

More than half of the respondents assume that the final examination will no longer take place on site in five years. 42 percent still expect the on-site inspection to remain important. This means that there is only a slight change compared to the previous year.

When asked whether the final examination will change massively as a result of technological change, the participating decision-makers answered with a clear “yes” at the rate of 76 percent. However, a little more agreed with this statement last year. One reason for this could be that some technological advances have already been made and expectations for further development have therefore decreased somewhat.

Automated processes for more individual testing

Digital progress often goes hand in hand with automation processes, and it is the same in auditing: one third of those surveyed expect that the degree of automation in the final audit will be over 50 percent in the next five years. In the past year, the respondents stated the degree of automation was only up to 25 percent.

A high degree of automation would be the basis for real-time audits - that is, continuous tests. This in turn could enable event-related final audits such as acquisitions, spin-offs or IPOs that are more tailored to the stakeholders. According to PwC, more individual examination performances could be a new differentiating factor in the competition of the auditing companies.

Cloud solutions as the basis for location-independent testing

When looking at the individual technological trends that influence the development of the annual audit, the respondents can agree on two main things: They believe that data analytics and cloud solutions will be formative in the short to medium term. PwC itself also sees the relevance of cloud solutions as an important factor. In particular, the spread of solutions such as SAP S / 4 Hana already plays a very important role for PwC in day-to-day business. Cloud solutions are the basis for ensuring that the final examination can increasingly take place independently of location.

Artificial intelligence will also change the test - 43 percent of those surveyed consider this technology to have a rather high influence. In the previous survey it was only 27 percent. The respondents believe that AI can display anomalies in the booking material or be used for simulations to check forecast calculations.

A major technological change can already be seen in the communication with the auditor: More than half of the respondents stated that they were already communicating with their auditor via tablets, chatbots or, for example, in virtual rooms. Three years ago that was only 28 percent; the majority used traditional channels such as e-mail and telephone.

Technological change also faces hurdles

But there are also many technological hurdles that companies see in relation to the digital audit - and this has changed little compared to the previous year: 80 percent of the respondents see limiting factors with high data protection and security requirements and almost two thirds at the speed that changes in technology bring with them. Almost half also complain about the auditors' inadequate skills.

Despite all the obstacles, one factor could give momentum to the further development of the digital final exams: 10 percent of the decision-makers surveyed assume that the digitization of the final exams can provide them with considerable information about their company that is not yet known. Last year only 5 percent of those surveyed were convinced of this.

gesine.wagner [at] finance-magazin.de