Innovation is becoming the ‘DNA’ in auditing, as society and businesses embrace new technologies. The audit profession continues to respond to evolving needs, play its public interest role by providing trust in the economy and remain attractive to younger generations.
In this new project, Accountancy Europe shed light on how technology has been transforming the auditor’s work. We have gathered insights from 10 audit and technology experts across Europe on this transformation’s key aspects and what we can expect in the future.
This webpage offers insight from expertise but is also part of Accountancy Europe’s introspection of the profession’s attractiveness to young people. Through this project, we are looking into how the audit profession innovates to keep up with the latest technology evolutions. Check out our latest work on attractiveness here!
New technologies are changing how companies operate, i.e. their business processes including financial management. In parallel, auditors are embedding more and more technology in their work.
Tools deployed in auditing often perform repetitive and mundane tasks which allow auditors to focus their skills on analysis and exercising professional judgement. This makes auditor’s daily work more efficient and compelling. In addition, these tools process large amounts of data, thus providing better insights to auditors and their clients.
At the same time, using technology poses challenges that auditors need to consider and address. This can include cybersecurity and data privacy, transparency and ethics around artificial intelligence (AI), tools’ reliability.
Disruptive technologies like Generative AI, ML, and blockchain are transforming auditing by enhancing business operations and enabling new models. Auditors now handle more digital data, leading to broader audit scopes that include IT system evaluations, data certifications, and cybersecurity. As these technologies automate systems, auditors must ensure their reliability and security. Big Data and AI tools are also changing risk assessments and control testing. Auditors must adapt, gaining expertise in data engineering, analytics, and cybersecurity. This shift allows auditors to provide forward-looking insights and strategic advice, reinforcing their role as trusted advisors in the digital age.
Detmar Ordemann, Partner, EMEIA Assurance Innovation and Digital Leader (EY DE)
To innovate and keep up with the evolving world and market’s needs, the audit profession needs to:
The modernization of auditing hinges on key elements: embracing digital advancements like AI, Machine Learning, Data Analytics, and Blockchain to boost efficiency and accuracy; auditors must continually enhance their technological skills, including AI, data engineering, coding, and cybersecurity; fostering a culture of agility and innovation is vital for adapting to technological shifts, particularly for large firms; auditors should develop strong data management practices to ensure data security and privacy, alongside standardizing and automating audit processes for greater effectiveness. A comprehensive approach, integrating all these factors, is essential for a successful technological transformation in auditing, necessitating updated professional standards to align with these advancements.
Detmar Ordemann, (EY DE)
The future of audit and technology will likely continue in the spirit of further convergence of financial audit and IT audit domains to respond to markets’ needs. Auditors’ skillset and composition of audit teams need to reflect this.
This goes beyond audit and technology knowledge and skills developed through education and training. One of the key skills for auditors will be adaptability to new rapidly evolving environments.
There is a growing trend of upskilling and life-long learning in the area of technology – equally necessary for youngsters, mid-career and even the most senior auditors. Continued efforts are needed due to the pace of development.
Angelique Koopman, Partner, Digital Transformation & Audit Innovation, Assurance (EY NL)
No educational system alone will prepare auditors for future technological developments; auditors cannot stop learning after graduating.
Christopher Azzopardi, Partner, IT Assurance Director (KPMG Malta)
A future auditor’s core package should ideally be a combination of a solid foundation in general auditing and accounting knowledge, as well as in emerging technologies such as data analytics, process mining, and (gen) AI. Also, auditors need to understand how these technologies are part of financial and accounting as well as non-financial systems going forward. For this shift to be effective, there must be willingness to change by experienced auditors and curiosity to learn by novices in the field.
Detmar Ordemann, (EY DE)
In an ideal world, we would get a hybrid of auditors that study as much IT as auditing subjects, but interests and aptitude will always play a role. When we look at technology though, even developers have moved from being sole coders to building no-code solutions. So, what we need is to have auditors that are good at being critical towards the audit process and apply what they know about the technical capabilities of clients and internal systems in achieving those objectives. Also, in 2023, is an auditor ‘complete’ without having ever studied computing or how to audit IT systems? I think it should be a requirement as much as tax, accounting and management subjects.
Christopher Azzopardi, (KPMG Malta)
The young people joining the profession are very tech savvy, and eager to challenge and improve ways of working. This is great news for the profession, and for audit quality, as there is no shortage of innovation across audit teams and firms too
Gareth James, (EY UK)
We definitely need to work further on updating the audit students’ curriculum and training to help them succeed on their career paths. This includes reinforcing knowledge and skills in maths, analytical skills, critical thinking and of course technology.
Pangratios Vanezis, Board Member (KPMG Cyprus)
Data analytics are one of the leading technologies in auditing. They are widely used and currently the most mature tech tools. AI is expected to play a much bigger role going forward. It is crucial to understand and trust it.
Some experts expect that AI will fundamentally transform auditing by automating it, better identifying risks, enhancing audit quality etc. In parrel, AI is associated with risks relate to e.g. its training, reliability, source data which can influence its biases, ethical issues. Auditors need to consider them when developing and deploying AI tools.
AI is poised to revolutionize the audit profession, enhancing efficiency and precision in data analysis. As we embrace AI/GenAI, we must navigate the challenges of ensuring compliance, data integrity, and ethical use. Our strategic vision is to harness AI’s transformative power while establishing robust governance frameworks to mitigate risks, ensuring AI acts as a reliable ally in upholding the highest standards of audit excellence.
Arnaud Ducap, Digital Audit Partner, EY & French audit institute CNCC
Investments are being made in automating the audit processes and AI is driving a lot of this at different levels. The limitation will not be the technology, but how far the profession and regulators understand and entrust it.
Christopher Azzopardi (KPMG Malta)
