Missing documents, figures that don’t add up and faulty internal controls are just some examples of threats to the auditing process.
This is particularly true for audit teams that rely on traditional paper- or spreadsheet-based approaches. Today, however, modern auditing software is making this kind of danger largely a thing of the past.
Let’s walk through the risks associated with these older methods, and how advanced auditing software can help eliminate them.
Risks Associated with Paper-Based Auditing
If you’re still relying on paper-based auditing, you should be on the lookout for following risks.
- Room for error: Manually producing and maintaining audit metadata like working papers have an inherent integrity risk. Auditors and their staff may need to process a high volume of audit data, which can create room for errors.
- Expensive: Paper-based auditing systems may seem to cost less on the surface, but there’s an implicit cost that makes them more expensive than modern cloud-based accounting systems. The time and effort incurred in determining preventive actions and executing corrective actions in a timely manner can sometimes significantly increase the cost of compliance.
- Incomplete audit trail: A missed document can make compliance difficult to prove, which can potentially lead to audit failure. Automating your audit workflow with auditing software can eliminate the problem by ensuring you have a comprehensive audit trail to support your work.
- Security concerns: Paper-based audits rely on the company’s internal controls. Access to documents must be limited. However, should the internal control fail, the documents may be tampered with. Instead, using a digital audit tool that offers strong encryption for protecting the integrity of documents can go a long way.
The Benefits of Auditing Software
Now that you know the risks associated with a paper-based accounting system, let’s talk about how auditing software can help alleviate them and optimise your overall audit process.
- Reduce human error: With auditing software, auditors don’t need to worry about human error. The tool virtually eliminates the risk of arithmetic inaccuracy. In addition, audit software can also help auditors identify outliers using big data and analytics tools. Improved accuracy mitigates detection risk and helps the auditor ensure there are no material misstatements that get overlooked.
- Improve operational efficiency: Auditing software removes duplication of efforts and saves auditors considerable time. No more filling out heavy loads of paperwork and manually typing notes. With an audit solution, you’ll have all the data you need, only a click away. You’ll end up substantially reducing the time it takes to complete the audit process for a client, thereby making room to take on more customers and generate more revenue.
- Eliminate ambiguous reports: Audit opinions can sometimes be subjective. What one team member believes to be a minor problem can appear to be a major issue to a colleague. It’s hard to take a call on the matter when the only piece of evidence is someone’s hand-written notes. However, when you use audit management software, you’ll be able to attach evidence to the relevant audit on the spot. Doing this eliminates speculation or guesswork because you have the evidence right in front of you.
- Collecting more information: The audit process is time-bound. Audit teams often need to ensure a business’s compliance requirements are met, which involves compiling the relevant paperwork within a relatively short window of time. Rushing can lead to errors and distract you from performing your core responsibilities properly. The result is often a missing document that can lead to the auditor taking even more time to complete the audit. Even worse, a missed document can lead to non-conformance, and cost the business even more than a delayed audit. Auditing software gives you a much more comprehensive view of your business’s operations without relying on physical documents. Instead of manually taking notes as they dig through a pile of papers, auditors can record voice notes or take pictures and spend time analysing the granular details.
Adding Value for All
The development of audit software has made auditing a far more efficient process. It saves auditors time, reduces operational costs and cuts down on manual work so your team can focus on more productive tasks. The value of auditing software also carries through to your clients in the form of faster and higher-quality service.
Caseware offers a wide range of solutions such as Caseware Cloud Audit to help improve your audit process. Learn how they can benefit your organisation today.
