The Risks of Not Embracing Technology in Auditing
Technology plays a vital role in today’s business environment, as we can see that every industry is using the high-end ERP systems to run their business smoothly whether it is their regular day to day operations or the regulatory compliances as applicable to the business. Due to change in business environment the complexity of commercial transactions are also getting increased therefore, to cope up with the business requirement and to satisfy the client, the Audit approach should also be changed and should be adaptive to technology which will help the auditors to improve the efficiency, accuracy and overall quality of audit.
Following are the major risk if an auditor does not use the technology while conducting the Audits:
Inefficiency
Manual Processes & manual working can slow down the audit process and it will lead to more time-consuming and labour-intensive due to which the cost of the audit will be high.
Limited Data Analysis
As we can see in today’s dynamic working environment the industries are using the high-end ERP Systems like SAP, Oracle etc. which required the auditor to conduct the audit through systems only and sometimes auditor has to use some other advance Audit tools to analyze the data in a more approachable way to conduct the audit.
Compliance Risk
In today’s economic environment there are various regulatory compliances for which the auditor is required to use the technology otherwise the deadlines to meet the various compliances cannot be met like GST, Income Tax etc.
Client Dissatisfaction
As client is growing its business exponentially and client is also depending on technology to enhance its business therefore the client also requires the Auditor to conduct the audit by using the more technology.
Lack of Access over data
Without using the technology like e-mail, conference call and VPN etc. there will be no sufficient reach on data and also there will be communication gap among the teams.
Improved Documentations
As digital documentation is available which result in reduction of physical maintenance of data and also it is easy to organize and it can be easily accessible from different locations.
Audit Trail
As client’s are using the high-end ERP Software, which also facilitate to organize the data as per statutory compliance and it also helps in maintaining the proper audit trail.
Business Loss
If an auditor is not using the technology according to the size, nature and extent of business of client then such client would not be satisfied and Auditor may lose such client.
Adaptability Issues
while performing the Auditing services the Auditor has to always be ready and focused to adapt the changes in technology to make himself abreast with the amendments and to consult the same to its clients. Therefore, if an auditor is not adapting the technology then automatically he will be out of the league from the consultancy business.
On Time Reporting
As technology helps in easy accessibility of data and with the use of analytical tools the performance auditor also enhances and further it will also result in on time reporting of audit to the clients.
Conclusion
Hence, it can be said that in todays ever evolving environment it is inevitable for an auditor to avoid the use of technology in doing the audits.
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