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LEARNING RESOURCES

on the audit process. One of the biggest challenges Guide to Audit Data Analytics
in this area is evaluating what data is available and In your next financial statement audit, apply the
how reliable that data is. benefits of audit data analytics. We’ve worked with
Reliability of data is an area that regulators as the profession’s leading experts to show you how.
well as firms are still wrestling with, as it provides
PUBLICATION
tremendous opportunity for greater insights if
only the data can be relied upon. For example, the
PCAOB staff recently issued guidance for auditors
to consider regarding the relevance and reliability of Getting Started With Data Analytics
information from external sources that the auditor Learn the foundations of data analytics and how
plans to use as audit evidence. you can conduct projects in your organization.
For example, finance departments in the hospi-
CPE SELF-STUDY BUNDLE
tality industry and their auditors may use interactive
applications to provide real-time industry data such
as occupancy rates and trend reports to inform their
work. Product reviews, weather patterns, and cus-
tomer web traffic and preferences also may inform improving. Don’t be discouraged if you’ve been
businesses and financial reporting decisions. burned by expensive, ineffective software in the
“What are the controls around this data, what’s past. Bowling said the technology is much better
the flow of data, who touches each piece of the data and less expensive now, and the software is
through this process?” Cardiello said. “… In more constantly improved through regular updates.
instances than not, this type of data is available. ■ Make sure the software will protect data.
It’s just a matter of finding it and working together The software provider should provide a nondis-
with our clients to do so.” closure agreement related to clients’ data and
The process is easier, Cardiello said, when should be able to provide a SOC report stating
auditors can interface their systems with the clients’ that it has strong internal controls over data.
systems and data. ■ Test the technology with one of your less
“One of the best uses and benefits of audit ana- complicated audits. It’s better to start with
lytics is helping you understand the client system,” something easy and work your way up to more
Newman said. “Because once you get your hands on challenging audits.
the transactional data and gain an understanding ■ Be patient. When Bowling started using her
of the flow of data — the profile, if you will, of that current AI auditing platform, it took three
data — you can plan your audit more effectively weeks to migrate the data needed to successfully
and more precisely.” perform the processes. Three years later, that
At a time when firms are struggling to handle migration activity took five minutes.
workloads and dealing with a shortage of skilled Perhaps most importantly, Bowling said that
people, finding the time to implement technology firms should think differently about everything —
is one of the biggest obstacles to adoption. At firms risk assessment, processes, and procedures — as they
where compensation is based strictly on billable implement technology. The ensuing improvements in
hours, the challenge is greater because there’s no quality and effectiveness can be substantial.
reward for spending time trying to innovate in a “When CPAs adopt a new technology, they
way that will make the whole firm more effective always want to use it for the same thing they did
and efficient. Bowling’s firm found a way around before, just faster,” she said. “But they really need to
that by awarding bonus compensation for success- be saying, let’s use this technology to see how it can
ful innovation. transform what we do, and do it better.”
She suggests the following tips for adopting
technology in the audit: For more insights from Cardiello, Newman, and
■ Find automation opportunities by asking Langelli, listen to Part 2 and Part 3 of the JofA podcast
staff what frustrates them at work. “Once series Audit Evolution in Action.
they tell you what drives them crazy, you say,
‘OK, well, how about we compensate you for To comment on this article or to suggest an idea
finding a solution for that?’” for another article, contact Ken Tysiac at
■ Understand that technology is constantly Kenneth.Tysiac@aicpa-cima.com or 919-402-2112. ■

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