In the wake of digital transformation there’s been a huge explosion in demand for cost-efficiency, greater security and transparency, and fact-based decision-making. This is forcing companies to realign their financial function, and revolutionising auditing – both of which are now expected to make a better-quality and more useful contribution. CFOs and auditors are morphing from backward-looking guardians of quality to data agents.
The best of teamwork and technology
Digitalisation is a bit like the invention of the wheel, which took people into a whole new dimension of space, time and speed, and revolutionised the concept of mobility. We used to get around on foot or on horseback. Now we’re travelling at the speed of cars, trains and planes, all over the globe. Similarly, auditors used to be experts who decided whether financial statements were correct and complete, mostly on the basis of samples. Now that figures and transactions are digitised, connected and automated, a large part of the resource-intensive manual work is no longer required. The volume of data that can be verified at the click of a mouse has got infinitely larger and more informative. We believe it’s now crucial for the financial function and the auditor to be aligned and coordinated.
Moving with the wheel of time
The wheels of a company’s internal financial function and the external audit have to run in parallel (see also Audit 4.0, Part 1, Finance functions and processes). Driven by the need for cost-efficiency, security, transparency and fact-based decision-making, companies are making themselves part of digital information ecosystems where they’re connected with customers, suppliers, authorities, banks and financial markets, all sharing data and information rapidly on an automated basis. This is leading to an explosion in data volumes and forcing participants to adapt their processes, controls, structures and corporate governance systems accordingly – the only way of generating, analysing and making proper use of the necessary data (see Figure 1).