AUDITING
Rebuilding faith in audit
Stuart Cobbe considers the essential changes needed in the audit process to rebuild confidence and deliver business value.
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Stuart Cobbe Director of Growth, Europe, MindBridge
identifying and managing risk. Shifting from an annual audit process that can only report after the fact to a near continuous, data driven approach will enable rapid, actionable insight. This article looks at the role of artificial intelligence, machine learning and risk-based audit in rebuilding faith in audit and providing businesses with tangible business value.
Overdue change
The audit industry must stay focused on the suggestions such as those from the recent Brydon Review into the audit market, that fundamental parts of the audit process must improve. Following the Wirecard scandal, calls for a more investigative and forensic audit are being echoed by the IDW, the professional body for auditors in Germany. Losing sight of these fundamental changes is a problem because traditional rules-based audit is outdated and inadequate to fulfil audit’s purposes, especially in a post Covid-19 economy. Audit’s methods have not kept pace with the growing level ISSUE 115 | AIAWORLDWIDE.COM
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he role and quality of audit has been under the spotlight in recent years following a string of high profile business failures – and the economic implications of Covid-19 have reinforced the need for change. From the initial economic freefall to the role of government financial support and the slow climb back towards business as usual – albeit in many cases based on fundamentally different models – balance sheets are fragile. Audit plays a vital role in safeguarding not only investors’ money but also a business’s wider stakeholders, including employees. Yet with traditional methodologies and outdated technologies, few auditors have the opportunity to identify balance sheet frailties in a time frame that will enable critical remedial action to be taken. A strategic change in the audit process is essential; a move from outdated, rules-based audit to a methodology focused on proactively
