Academic journal article Journal of Accountancy

How to Enable Audit Innovation: Ideas, Strategic Alliances, and User-Friendly Tools Help Deloitte Make Technological Improvements

Academic journal article Journal of Accountancy

How to Enable Audit Innovation: Ideas, Strategic Alliances, and User-Friendly Tools Help Deloitte Make Technological Improvements

Article excerpt

Technological innovation in the audit process starts at Deloitte with questions for the firm's engagement teams.

What problems are they encountering? What challenges do they face? What tasks take too much time or are tedious? How can teams enhance the application of critical-thinking skills? What stands in the way of enhancing the quality of an audit? The firm keeps a current list of these items. The availability of technology to solve such auditor problems--while improving audit quality and providing clients with additional insights--can perhaps provide answers to some of these questions and has led to a new, intense focus on innovation in auditing. Deloitte, for example, is using a new artificial intelligence application to read and analyze documents such as lease contracts; analytics to test huge populations of journal entries; and mobile technologies to improve counting of inventory. (To read more about particular technologies and innovations that Deloitte is applying to reshape the audit process, see "Rethinking the Audit," page 29.)

For the many firms that are seeking ways to implement automation for audit applications, creating the infrastructure to generate these process improvements and valuable new insights may be just as important as the technology itself.

START WITH AN IDEA

In addition to asking audit teams for problems they encounter, Deloitte holds a yearly in-house competition asking for ideas on how processes can be improved. Those whose ideas are deemed most promising are invited to present their cases to senior management. The best ideas win funding.

The winners of the innovation challenge in 2016 were members of a team that found a new way to use robotic process automation in the audit. None of them had been with the firm for more than a year and a half.

"It's got nothing to do with level or experience," said Jon Raphael, CPA, Deloitte & Touche LLP's chief innovation officer. "It's good ideas, and they're all rising up."

SOURCES OF TECHNOLOGY

Deloitte leaders constantly are looking for startups and other firms that have developed technology that could be used to innovate the audit process, which historically has been slow to undergo innovation.

For example, the firm collaborated with Kira Systems to build an artificial intelligence platform called Argus, which uses machine learning to read documents such as contracts to extract and analyze key information. Firms like Kira have the technology, and Deloitte's professionals find ways to apply it.

"Startups pour tremendous energy and dollars into adapting or creating new technologies," said Craig Muraskin, Deloitte LLP's managing director for U.S. innovation. "But often they aren't in a position to translate their capabilities into practical value for companies. That's where we come in."

Some of the collaborations, like the one with Kira, are exclusive. Most times, though, Deloitte uses technology that the partners also may make available to others. In such cases, carefully crafted nondisclosure agreements sometimes may be necessary for both sides to protect each side's individual interests while enhancing the value of the relationship.

In other cases, Deloitte has developed technology internally.

MAKE IT EASY TO USE

Simplicity for users is a baseline requirement for any technological improvement Deloitte makes to the audit process. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.