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se of sophisticated technology and data ana- Auditors are also using analytics to gain an
lytics in the audit is fast becoming a standard understanding of the flow of data through a
Uoperating practice at Aronson LLC as firm client’s system, enabling more effective and precise
leaders are embracing the digital-first approach to audit planning.
engagements that is becoming more prevalent at “Everybody knows that the best audits are the
firms across the country. ones that are planned well,” said Carolyn Newman,
Alan Langelli, CPA, the lead partner in the CPA, founder of data analytics firm Audimation
Technology Services Group at the assurance, tax, Services in Houston, which is now part of Case-
and consulting firm with 35 partners headquartered Ware International. “And so if you can focus on
in Rockville, Md., said technology is efficient and what you want to look at because you’ve used audit
effective at helping auditors organize their data data analytics to risk-assess and identify things to
and enables more informed and timely decisions. focus on, the auditors can be the most effective.”
He said the pandemic has shown that the benefits
of technology are accelerating, and firms that don’t GETTING STARTED
embrace the digital revolution will be left behind. Jon Cardiello, CPA, an audit manager who man-
These factors have caused firm leaders and pro- ages the internal data analytics process team at
fessionals to take a completely different approach to 48-shareholder firm Schneider Downs in Pitts-
their audit work. burgh, gets started on technology-driven methods
“A digital mindset refers to a new way of by looking for problems to solve.
thinking regarding how our work is completed and “We’re asking ourselves questions like, ‘What
accomplished,” Langelli said. “It’s more than just problems do we have? What takes the most time
digitizing a manual task. It really forces us to think on our audits? What’s highly repetitive or what
about how technology can help us plan and execute requires a lot of data entry? Where’s the risk on
our audits.” these audits?’” he said.
The discussion about technology, digital Schneider Downs leaders use these questions to
platforms, and data analytics in audits refers to discover areas of opportunity where value-added
use of software that gives practitioners the ability solutions can be developed for the audit process.
to analyze complete datasets in ways that were That’s one of the big advantages of technology-
not possible in the past. Armed with informa- driven audits.
tion generated by the software, auditors can more These processes enable the firm to analyze full
effectively perform risk assessments, design more datasets and identify and target test risk, providing
appropriate procedures, and investigate anomalies more complete and detailed insights. Because the
that might have gone undetected if the audit relied technology is performing the routine tasks of the
on sampling rather than a full analysis. audit, the auditor is freed from those duties and
It’s important to state that for all of technology’s has more time to consider and deliver meaningful
benefits, it is not intended to replace humans in the information to the client.
audit. The human qualities of evaluation, analysis, “A real benefit of audit data analytics is the
and judgment remain an irreplaceable part of the better insights that you can get and more time to
audit process, and the use of technology can give be able to offer those better suggestions,” Newman
the people on an audit the ability to focus on those said. “And that will increase the relevance of every
higher-level skills rather than getting bogged down auditor.”
by mundane, rote processes. In the same way that Use of data analytics also can improve the effec-
a calculator enables math students to solve more tiveness of an audit, as testing an entire population
complex problems by allowing them to forgo long can expose problems that could be missed with an
division or multiplication computations, technology approach that uses sampling. In risk assessment, as
helps auditors focus their time where it’s needed the well, properly planned audit data analytics can help
most. identify previously unidentified risks and provide
One of the biggest benefits of using technology information to help the auditor better design or
and data analytics in the audit is the elimination of tailor audit procedures to address risks of mate-
constraints that sampling places on an engagement. rial misstatement.
Data analytics gives practitioners the ability to But adopting new technology in the audit is
analyze an entire population of data for anomalies, not an overnight process, according to Samantha
trends, and areas of risk. Bowling, CPA, CGMA, a partner at Garbelman

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