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Tax & AccountingAugust 02, 2021

Leverage Analytics for a More Data-Driven Audit

By: Wolters Kluwer Tax and Accounting

In its mandate to improve audit quality, the AICPA strongly encourages auditors “to voluntarily make more use of technology-based audit data analytics.” Further, AICPA’s “Guide to Audit Data Analytics” affirms that analytics can enhance audit procedures through every phase of the audit and provide a new way of analyzing results. Audit analytics help uncover anomalies and provide auditors with a better understanding of each entity and its risks.

Our eBook, 6 Tips to Leverage the Power of Audit Data Analytics, provides useful guidance for incorporating analytics into your audit workflow. To get real-world insights, we asked CPAs from three firms to add insights from their own experiences with leveraging analytics in the audit:

  • Michael Holmstrom, CPA Audit Manager Marks Paneth LLP
  • Muhammad Hussain, CPA Senior Audit Manager EOS Accountants LLP
  • Brad Caruso, CPA Partner WithumSmith+Brown, PC

To read the complete eBook, simply fill out the form below. I’ll discuss two of the six tips here.

Organize an analytics champions group

Forming a team of audit analytics champions within your firm is an excellent way to increase auditor adoption of analytics. Champions can be powerful influencers for organizational change. Here’s how to select the right people for your champions team:

  • Look for those who understand all of the ins and outs of your firm’s auditing procedures.
  • Champions should have specific knowledge of how your firm’s existing software solutions handle client data.
  • They should understand analytics and the guidance.
  • They need to be interested in evaluating audit technology.
  • Good champions enjoy sharing their knowledge to advance the firm’s objectives through teaching and mentoring.

“We’ve created a data team. We’re basically a group of people that know Excel® really well, we understand analytics really well, and we understand the guidance really well. Our purpose right now is to become a more efficient firm in the audit side.” — Michael Holmstrom, CPA Audit Manager Marks Paneth LLP

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Automate low-hanging fruit first for an instant efficiency boost

You don’t need to use analytics throughout your audit in order to get started. In fact, it is better to start by automating the highly manual, routine tests your firm runs on every client. Every auditor will immediately enjoy the time savings, reinforcing their desire to continue learning and using your audit data analytics tool. Further, using analytics to automate routine tasks will allow auditors to learn to trust the tool. Your firm will also get the fastest return on investment through the instant efficiency gained.

"Start with the low-hanging fruit. Prove efficiencies. Prove that everything in the process is working before you take that deep dive. We started with journal entry testing. Once we saw the efficiency with that one test alone, we realized that we were on the right path.”
— Michael Holmstrom

Decision drivers for selecting an audit analytics tool

Download the eBook to get four additional tips for leveraging analytics, plus a chart of where to incorporate data analytics throughout the audit process. You’ll also gain insight into what considerations drove the selection process for audit analytics software at three firms.

Complete the form below to read the eBook. 

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and expertise that helps tax, accounting and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed and accuracy.

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