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Technology: the key to audit’s future

US executives, board members and academics say external audit needs to evolve, with a majority indicating technology is the force that will transform the profession, according to a survey from KPMG US in association with Forbes Insights.

The Forbes Insights/KPMG survey entitled Audit 2020: A Focus on Change, surveyed 151 individuals in the US. Nine-three percent of respondents said they believed the audit profession needs to evolve. A third answered that auditors should go beyond certifying numbers, and 59% think that while auditors' role should stay the same, how they perform it should evolve.

Asked which issues will have the greatest impact on the audit profession over the next three to five year, 58% of respondents pointed at technology. The regulatory environment came as a close second, highlighted by 56% of respondent. Trailing in third place, the global economy was mentioned by less than half (44%) of the respondents.

"As companies embrace data and analytics in their financial reporting and growth strategies, the types of controls and risk assessment needed are evolving," KPMG's vice chair of audit Scott Marcello commented. "This is just one example of how technology and digitization are impacting our role as auditors. The audit profession is already changing to meet this new landscape."

The survey's findings underscore the growing importance of innovation in the audit profession, Marcello continued. "The power of technology and digitization in the audit arises from more effective risk assessment and enhanced quality for stakeholders -- by empowering a robust understanding of an organization's operational concerns, control environment and financial performance."

However James Unruh, former chairman of the audit committee at Prudential Financial and Tenet Healthcare noted that technology is only a tool and it should not make the auditor shy away from his abilities. "Technology is only an enabler," he said. "Only critical thinking by the auditor can lead to the analysis of more dimensions of the issues."

Survey respondents included: 13 audit committee chairs and members, 22 CEOs, 15 CFOs, 20 other C-level executives and controllers, 30 directors of financial reporting, 21 investors, 26 audit associates, two current accounting students and two audit professors.

Related link:

Audit 2020: A Focus on Change

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