Technology is having a significant impact on many areas of the finance profession. Invoice processing, credit decisions and communication are just some of the many activities reaping the benefits of an increased use of technology.
Robotic machine learning can help to automatically scan and post invoices to finance systems. Data analytics can be used to highlight unusual activity during the audit process and Artificial Intelligence can help make sense of complex financial scenarios. The list goes on.
The increase in the capability of software has also brought with it an increased fear – fear of job replacement and of redundant skills. There is no doubt that certain tasks that can be replaced by automated systems will be. However, rather than seeing this as a negative, it should be seen as an opportunity to make the accountancy industry all the more appealing.
For example, the advent of Making Tax Digital has compelled thousands of VAT registered businesses to move onto an electronic bookkeeping package. This kind of software is easier to use than ever before and directly links into statutory financial statements preparation modules. This means less time is spent posting invoices and preparing the year end accounts. In turn, this means that there is more time to provide value-added services to clients. Tax advice, budgeting, forecasting, scenario planning and many other activities can be offered instead.
The levels of production will increase, and more accounts, more tax returns and VAT returns can be prepared faster than ever before. At the same time, accountants can be of even more value to their clients.
The human element of being a trusted financial advisor will be more important than ever.
Without question, technology is also having an impact on the statutory audit industry. Data analytics allows for vast ledgers to be quickly analysed, with unusual transactions being brought to the auditor’s attention and information exchange portals allowing for the speedy exchange of information. However, I can’t help but believe that at the heart of auditing will always lie human intuition, otherwise known as professional scepticism.
The demonstration of professional scepticism is absolutely key to a successful audit. Knowing which questions to ask and when to ask them to get to the root cause of an issue is not something that is going to be within the capabilities of software anytime soon, at least to the level of placing total reliance on it. Software can assist the auditor in where to focus their efforts, but experience, knowledge and a questioning approach are still key attributes required of auditors.
Technology can be seen to answer the questions “What?” or “How?”, but does not answer the question “Why?”.
Process automation and data analytic software shouldn’t be seen as something to be afraid of. Instead, it should be seen as one of many tools that helps auditors and accountants to do their job and let them focus on the human elements that clients truly value.
Written by Stuart A. Brown, Associate Director Quality and Technical Assurance Duncan & Toplis Limited.