Future of Audit - Technologies that will change the future of the Audit

Future of Audit - Technologies that will change the future of the Audit

This is a purely fictional article about how the audit will be happening in the future based on the technological advancements happening currently and that might happen in future.
Number of professionals required for the audit will be significantly reduced based on the technological advancements. The audit firm has deployed audit bots in the client accounting system which is based on block chain technology. These Audit bots are built based on Artificial intelligence and sends real time information about any significant variations from expectations. Now the audit software is backed by advanced data analytics capability and Artificial intelligence.
Planning
Audit software is automatically set to compute the planning materiality. All the required client data like a trial balance and the historical trends will automatically flow to the audit software. Audit software which is based on Artificial Intelligence also uses big data to collect other economic trends to predict the planning materiality. The auditor just needs to confirm couple of required inputs for the system to calculate the materiality automatically. This will be recalculated every month based on the changes in the big data and the trends.
Control Testing
Control testing now totally eliminates human involvement and is fully done by the bots. Entity level controls will be the only area which the audit team members would perform manually.
As explained earlier audit firm has deployed audit bots in their accounting system. These bots are based on Artificial Intelligence and can identify any significant changes in the trends or when a suspicious activity happens in the system or any alteration in the controls placed in the system. Now the client system does not have any manual controls and all the controls are automated controls. The audit team continuously monitor the exception reports and discuss with the management on the real time basis. Now the entire documentation is done by the bots.
Final Audit
Now there is no concept such as interim and final testing as the audit is a continuous process. Inventory verification is done by drones and the information is send to the audit software which will automatically reconcile and exception reports will be generated for the audit team to verify and discuss with the client.
No bank or Accounts receivable confirmation is required as the client system is based on block chain technology and the transactions are posted only when it is confirmed by the other party. This has totally eliminated the reconciliations from the accounting process and has eliminated confirmations for the audit process.
No physical contract verifications are required as the client now has smart contracts which bots will verify for any significant changes.
Client system now automatically creates financial statements and disclosures and has no manual interferences. Audit software has the ability to recreate the financial statements and can compare it with the client statements. Financial statements are now machine readable and programmable.
Only a few areas require complex accounting treatments and require auditor’s involvement.
The audit firm would be able to do much better audit themselves using advance technologies and much lesser staff. The cost will be significantly reduced and accuracy will significantly go up.

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