The reports of the death of the audit function have been greatly exaggerated. It was not that long ago that researchers at Oxford University boldly predicted that 35% of existing jobs in the United Kingdom were at risk of automation. Their picks for the top 10% of jobs most likely to be replaced by the robot revolution included tax preparers and accounting professionals.
That was in 2013 and, since then, any talk of artificial intelligence, automation or professional services technology development of any kind was tinged with a hint of fear for the future of the accounting profession.
As a leader in audit and assurance for Thomson Reuters, I have been on the front lines of that discussion as we’ve embarked on our own journey to leverage AI, automation and the cloud to improve the audit function for our customers. Today, six years after the technology fearmongering reached its fever pitch, I’m happy to report that the real-world progress is far more encouraging than any of those early storylines would suggest. In fact, over the last five years, we have launched our cloud audit solution and begun migrating our customers onto fully cloud-based audit workflows, and in late 2018, we finalized a partnership with Inflo that will allow us to provide data analytics and progressive technologies, woven directly into the audit workflow. As a result, we are now very well-positioned to develop a wide range of audit workflow technologies that automate many of the most repetitive, tedious and time-consuming parts of the audit process.
Meanwhile, according to the latest data from the U.S. Bureau of Labor Statistics, employment of accounting professionals is projected to increase 10% over the next 10 years, which is faster than average for all other professions. Accountants and auditors are not being replaced by this technology, its making them all just that much better at their jobs. We’re seeing this every day with clients that are growing their practices by taking advantage of our technologies to seize new business opportunities. For example, users of our Thomson Reuters cloud audit suite are able to fully automate roughly 30% of the audit process by streamlining their data ingestion and data analytics capabilities. Historically, a great deal of the time spent on an audit would be spent chasing the client’s data. This would involve a lengthy back-and-forth process between the client and the auditor who needed to ask for transactional data, receive and check that data, and store it piecemeal in the audit workpapers and documentation.
Today, with our Audit Intelligence product powered by Inflo, a robust set of data ingestion tools allows the data to flow freely from the client to the auditor, allowing the auditor to very efficiently apply built-in fluctuation analytics as well as anomaly detection that flags irregularities for further investigation. Now, that process is getting even more powerful with the integration of new technological capabilities we’ve acquired from Confirmation, the leading provider of digital audit confirmation services. By combining this technology with our cloud audit suite, we will empower our audit customer to streamline and automate the laborious process through which they must send out confirmation letters to third parties to verify bank accounts, accounts receivable balances and other financial data.
Ultimately, what’s happening as these technologies become integrated into the audit workflow is that auditors will develop a level of speed and accuracy that would have been considered superhuman less than a decade ago. This in turn will enable them to focus more time and energy on higher risk parts of the audit which expose them to much higher liability risk – highly subjective and judgmental areas such as collectability of loans or receivables and the valuation of goodwill and other intangible assets. In addition, the combination of data and time efficiencies create opportunities for auditors to provide greater business insights to clients, leading to higher value consulting and advisory services.
This is still just the beginning. We’re currently working with our colleagues in Thomson Reuters labs to bring customers into workshops and examine how they use our solutions to continually tweak and refine workflows to make them more efficient. These workshops also help us more deeply understand customers’ ever-changing needs and pain points, giving us insights to refine our strategies and identify new growth opportunities. Just as we’ve seen in many other industries, when the technology improves, so do the professionals and their end product. That’s what the much-maligned AI revolution in accounting is doing, too. The technology is raising the bar for everyone, ultimately making us better at what we do and enabling accounting firms to scale their businesses based on those efficiency gains. From where I sit, that vision of the future looks bright.
Scott Spradling is Head of Audit & Assurance Products at Thomson Reuters. He collaboratively leads the CPA Firm Audit & Assurance team, delivering strategic solutions and new product innovation. Thomson Reuters is a leading provider of audit and accounting tools and resources for auditors across the U.S. and globally.