The surprising way the future is shaping audit

Modern building and old building
By Sandeep Shrestha, Account Manager,

11 December 2017

Technology is a major disruptive factor in almost all markets. Sandeep Shrestha from discusses how tech is revolutionising the practice of audit - in sometimes surprising ways.

Advances in digital and information technology are affecting every industry and audit is no exception. Just as the practice and management of audit were influenced by earlier developments, such as computerised accounting systems, audit is now being influenced by developments such as artificial intelligence (AI), machine learning and cognitive systems, not to mention data analytics and the potential for 100 percent sampling, as well as a host of internet based technologies.

Testing times

There was a time when manually matching invoices, delivery notes and purchase orders was the only option, before such records were computerised. The practice of visiting countries to conduct an audit was essential before business systems became location agnostic and remote access became simpler. Postal audit confirmations were the norm before the arrival of internet banking and providers of online audit confirmations.

As internet business banking has spread, banks have changed their practices around confirmations and some now specify online requests as a preferred method. Rather than have every staff auditor repeating the same authentication and authorization procedures, firms can rely on one specialist provider to verify information such as contact details and the identity and authority of the responder. This speeds up the audit confirmation request cycle.

Widespread access to enterprise resource planning systems, internet access, and the rise of mobile devices have combined to create today’s environment. An auditor can now log into the systems of an audit entity and its global subsidiaries from almost any location around the world. Auditors can locate all IT work associated with an audit at a low-cost, off-shore centre in Asia or a nearshore centre in Europe.

Big on data

What the computerisation of business and the availability of audit data analytics (ADA) tools now allows audit firms to do is to download 100% of transactions, match all sales invoices to all delivery notes and purchase orders and then agree that with every single cash receipt. The larger audit firms have invested heavily in bespoke ADA tools and routinely use them for journals testing, while off-the-shelf offerings, suitable for smaller audit firms, have also started to emerge.

Audit teams have been using computers and software to analyse data while performing audits since companies began computerizing their accounts. But the latest technological developments, combined with ADA, make it easier (and more affordable) to capture, store and perform tests on datasets much larger and more complex than would be feasible if it was done manually. It also allows the performance of audits to be more efficient and effective and enhances audit quality.

Shifting sands

Only time will tell where the audit profession is taken by the challenges and opportunities created by technology, or how quickly they trickle down. Some smaller firms still opt for paper-based audits, despite the demands of the clarified auditing standards and electronic assignment technology that can simplify and streamline the audit. The IT infrastructure of clients also remains a significant factor in the adoption of audit technology.

Meanwhile, developments such as ADA, online audit confirmations and cognitive systems are reshaping the practice of audit for large firms. They enable them to streamline labour-intensive processes, as well as supporting their application of professional scepticism and professional judgement. They are also enabling firms to tailor delivery models to make audits more relevant to the fast-changing needs of business.

For more information on the future of audit visit

About is the global leader in secure online audit confirmations. Performing the process electronically helps auditors to cut paper and post, dramatically increase efficiency, enhance their client service, reduce the risk of fraud, and deliver on-time audit opinions. We simplify the confirmation process and eliminate the need to track down responses.

About the author 

Sandeep Shrestha, Account Manager for's Scotland and Ireland clients. He is focused on the engagement of accounting and audit firms in Scotland and the island of Ireland. He has over seven years of experience in the accounting industry, previously working as an auditor in practice and as Lead Financial Accountant at Intuit before joining He is also pursuing an MBA from Bradford University School of Management.

This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.


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