There are two forces within an audit team: senior staff and junior staff. For audit team leaders, both are extremely important and bring to the table unique sets of experiences and skillsets that are needed for a modern audit. The key is bringing together their strengths to help firms stay ahead of the curve.
The reality is that the face of audit is changing, and today’s auditors are expected to be well-versed in a variety of disciplines. The modern auditor must bridge the gap between business insights and innovative technology.
This article will explore the technology used within audits and how firms can bring together the strengths of both senior and junior staff to help deliver more efficient and accurate audits.
What are the main types of audits?
There are many types of audits that can be conducted, in addition to being conducted internally or externally. These types of audits include, but are not limited to, the following:
Financial audit: A financial audit, which is required for all public entities, is the most common type of audit. It is conducted by a CPA firm, which is independent of the company under review. While financial audits usually analyze the financial statements of an entity, they may also target more specific areas like tax records.
Compliance audit: This type of audit is most often conducted within regulated industries and educational institutions and is an examination of the policies and procedures of an entity or specific department, to see if it follows internal or regulatory standards. For example, a compliance audit could be conducted to verify that workers’ compensation pay is being properly reported or the terms of a bond indenture are being followed.
Information systems audit: This type of audit involves a review of the controls over software development, data processing, and access to computer systems. The goal is to identify any issues that could hamper the accuracy of IT systems, and to ensure data is secure and not at risk of a data breach.
Operational audit: An operational audit, which can be conducted externally or internally, is analysis and evaluation of the planning processes, procedures, goals, and results of the operations of a company. The intended result is recommendations for improvement.
What technology is used in an audit?
Common technology used in audits include:
Cloud-based solutions: Cloud-based technologies tear down geographic barriers so auditors can access data from anywhere at any time. This makes it easy to collaborate fieldwork and review processes across multiple locations, and it enables remote staff to collaborate in real time.
Artificial intelligence (AI): The impact of AI on the audit profession is significant and far-reaching. AI leverages several connected technologies like speech recognition, data mining, and machine learning to provide results to auditors. AI in auditing systems can also help junior staff streamline tasks to free up more time for collaborative projects. AI can drive assurance, efficiency, and better identify anomalies by eliminating the need to create tests, write scripts, or remember all the functions and rules.
Digital devices: Remote auditors can leverage live, two-way communication technology, including live streaming and two-way smart glasses, to do a live walk-through. Another option is video and still digital photographs taken using company cell phones. Some firms have also used cameras that have drones to do remote inventory observations.
Advancements in technology are reshaping the audit landscape, providing great opportunities for junior and senior staff to collaborate and learn from one another. Additionally, they provide the entire team with significant gains in productivity and efficiency.
What are the main types of audit software?
The audit software that is available today enables junior and senior staff to work together with smarter, faster, and greater confidence. What is ideal is having an end-to-end online audit solution that connects the dots and brings it all together for a powerful suite of products. Let’s quickly review some of the types of audit software.
Data analytics: The efficiencies and time savings gained from AI-enabled data analytics software are not to be underestimated. Take, for instance, samples. Traditionally, audit firms would have to select samples of populations, test for exceptions, and extrapolate results. By applying advanced data analytics, auditors can easily test full data sets, instead of just samples, and efficiently identify anomalies and risk.
Online confirmations: With secure, online confirmations, auditors can eliminate traditional methods that are prone to error and even fraud. With the right solution in place, firms can reduce the confirmation process from weeks to days and cut costs by more than half (compared with doing paper confirmations). Plus, automatic follow-ups and status updates further improve efficiencies.
Audit workflow management: Acting as an organizational hub, a cloud-based engagement workflow can provide auditors real-time access to all of their work papers and trial balances.
Bridging the gap between junior staff and senior staff
Such automated audit technologies as those outlined above must be leveraged by audit teams, along with training, to help transfer the experience and knowledge of seasoned auditors to junior staff, and to transfer the tech know-how of junior staff to senior auditors. Bridging the gap, however, should not stop there.
Consider establishing mentorship programs where senior auditors can coach and train younger auditors. Another idea is to have more senior auditors lead a lunch-and-learn session to share best practices and gather ideas and feedback from the junior auditors.
It is also important to avoid stereotyping and jumping to conclusions about team members, as stereotypes have emerged for every generation. Furthermore, firms should foster a corporate culture of belonging and mutual respect and encourage flexibility as priorities may be different for people at different stages of their life.
Maximizing the potential of junior staff
While senior staff bring to the table years of expertise and experience, junior staff can inject a fresh mindset into the firm. Furthermore, they have grown up with technology, which is why having a digital-first workplace is so important to junior staff.
This could present an ideal opportunity for junior staff members to host lunch and learns as well as helping senior staff better acclimate to audit technology. Gen Z has a natural tendency to challenge the status quo, so they bring new perspectives on improving legacy systems. Furthermore, Gen Z is ambitious and, despite their tech-savviness, Gen Z-ers tend to prefer interacting with managers and coworkers in person. They are also eager to grow and deepen their skills through training and mentoring.
These attributes can prove to be a win-win for today’s forward-looking firms. Embrace what junior staff can offer and provide them gradual autonomy to bring out their tech savviness and entrepreneurial desires.
Ensure that your audit firm remains competitive by bringing together the strengths of both senior and junior staff through the investment in automated audit technology like Thomson Reuters Cloud Audit Suite. To learn more about the audit talent landscape, read “The changing face of audit talent.”