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December 2022

Will Technology Replace Skilled Auditors?

By Nilanjan Paul, Chartered Accountant
Reading Time 14 mins
INTRODUCTION
If data is the new oil, then a digital ecosystem is its refinery. Today, entities are using next-generation technologies more than ever, and many aspects of financial reporting and underlying processes have been digitised. As referred by the World Economic Forum, we are at the cusp of the “Fourth Industrial Revolution,” central to which is the development and adoption of automated technologies. The audit profession is also catching up with these technological developments. Building on the changes computers brought to the assurance profession, the use of advanced technologies is driving the evolution of the audit. As digital transformations speed ahead, auditors need to follow suit - the question is no longer ‘if’ the auditor needs to change; it’s ‘how fast?’ This article provides an overview of the automated tools and techniques in vogue, their myths, challenges and considerations while embarking on innovation strategy by audit firms. AUTOMATED TOOLS AND TECHNIQUES Audit procedures are performed using several manual or automated tools or techniques (and a combination of both). The automated tools and techniques would broadly fall into any of the following categories:

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