Auditing for Innovation: A New Perspective from DeFreitas & Minsky LLP
The world of accounting and auditing is undergoing a dramatic transformation, powered by technology-driven shifts like cloud computing, data analytics and artificial intelligence (AI). As such, organizations around the world must recognize these changes and adapt strategically to stay competitive in today’s market. For firms like DeFreitas & Minsky LLP, a certified public accountant firm based in New York, the key to driving this transformation lies in Innovative Auditing.
Understanding the Role of Innovative Auditing
Innovative Auditing hints at a shift from the conventional, checklist-driven audit procedures. This new approach leverages the latest technologies to understand the unique composition and operations of an organization. A report published by the Association of Chartered Certified Accountants (ACCA) and PwC, stated that the use of technology in audit has spiked by 76% since 2016. More accountants are now using data analytics and AI for risk evaluation and interpretation of big data.
The Power of Data Analytics in Auditing
In the context of auditing, data analytics allows for the examination of large sets of data to identify patterns, correlations, and anomalies which may represent financial risks or opportunities. Gartner, a leading research firm, has indicated that the data analytics market is set to reach $81.5 billion in 2022. This surge is driven by its application in risk assessment and mitigation, making it a valuable tool for auditors.
- Improves the quality of Audit: By harnessing the power of data analytics, auditors can identify risks, reveal discrepancies, and identify patterns without the need for excessive manual review of records.
- Enhances Decision Making: Through data analytics, auditors gain a better understanding of the organization’s operations, enabling them to make more accurate and informed decisions.
- Fuels Innovation: The ability to process large amounts of data drives innovation in audit procedures, as it offers insights that were previously unattainable.
Artificial Intelligence: The Future of Auditing
AI is not a futuristic concept; it is already being used in auditing and has a potential to revolutionize the industry. According to a study by Accenture, 79% of executives across various industries agree that AI will help accelerate technology adaptation, thus transforming the nature of work.
AI can sift through massive amounts of data and learn from it, recognizing patterns that humans cannot. This functionality can bridge the gap between traditional methods and the ability to effectively process, analyze, and interpret voluminous transactions.
- Boosts Efficiency: AI can automate tasks that, until now, have been performed manually, leaving auditors free to focus on audit planning and high-value analytical tasks.
- Heightens Accuracy: Robotic Process Automation (RPA) reduces the possibility of errors in monotonous tasks, making audits even more reliable.
- Fosters Innovation: AI, when correctly implemented, can lead to a deep and comprehensive understanding of the client’s business environment, laying the foundation for new strategies and innovation.
Innovative Auditing at DeFreitas & Minsky LLP
At DeFreitas & Minsky LLP, we believe in constantly evolving with new trends in the industry. We integrate data analytics and AI into our audit procedures to provide innovative solutions aligned with our clients’ needs.
Looking at Deloitte’s 2017 survey which showed that global investment in AI and cognitive systems is forecasted to reach $46.3 billion by 2020, it is evident that pioneering firms like ours are becoming more agile and forward-thinking, seeking unique audit solutions that amplify efficiency and effectiveness.
The Road Ahead
While the path to the full adoption of innovative auditing may still be a work in progress, one cannot deny the transformative impact it has had on the industry so far. As we transition into a world heavily dependent on innovative technology, it is paramount for auditors and accountants to keep pace and adapt to these disruptions, such as the ones shared above.
At DeFreitas & Minsky LLP, we are committed to staying at the forefront of these developments, equipping ourselves to drive innovative auditing to its fullest potential. It is clear that the future of auditing is here, and it resides in the power of technology and innovation.
