Advanced technology is changing the face of audit

In Action: For the last few years, a large financial services client and the KPMG team have pushed to implement new technology and innovation throughout the global audit engagement. Any time saved can help the KPMG team increase their focus on higher-risk areas, so they embraced this technology as soon as it became available.

“I kept thinking it was too good to be true,” one team member noted, “especially because the tool is so easy to use.”

The outcome? Another successful technology implementation to share with the client. By automating previously manual processes like these, KPMG teams can redistribute time and focus from low-judgment work to areas of increased risk – thereby optimizing time spent in relevant areas – overall, a better audit experience.

Audit clients are looking for innovation that reduces the total cost of the audit – including the work their teams do – and enhances audit quality.

In Action: One engagement team tackled this dual challenge head-on with our firm’s automated funds toolkit, which enables a data-focused approach and the automated testing of entire sets of data. The toolkit is part of our continuously growing suite of industry-specific innovation to support a more consistent and efficient response to risk.

After the KPMG team coordinated data elements and requirements, they were able to automate testing, which ultimately provided significant productivity gains, and shift their approach from sampling to 100% testing, advancing audit quality.

The KPMG team noted that while they faced an upfront time investment, there was no increased burden on the client, and the results spoke for themselves.

With emerging technologies, audit’s data exchange is simpler than it used to be. In just the first year of implementing automated routines, this KPMG engagement was able to conduct 100% testing in the same time as the traditional approach took in the previous year’s audit, and significant time savings are expected in following years.  While this example is specific to the asset management industry, similar solutions are available in other industries – working together with KPMG Clara, they help deliver a better audit experience.

In Action: One KPMG senior manager, engaged in the audit of a company with several entities, knew her client and KPMG team could save hundreds of hours in the testing process by integrating automated data transformation technologies into their procedures to match and map disparate data sets.

Upfront, the KPMG team worked with the client to better understand their process, using those technologies to automate key steps, while troubleshooting exceptions. After just a few weeks, this capability saved time for the client and the KPMG team, which was then able to focus on areas of greater risk, ultimately enhancing audit quality.

Now that the routine is set up, it takes the team less than an hour to run and saves hundreds of hours of manual test work. In addition, the team has been able to share new insights derived through this process.  Next, the team’s goal is to integrate the routine throughout the year, saving time at each quarterly review.

The compounding impact of simple process automation brings consistency and efficiency in audit engagements. KPMG audit teams are using RPA on a widespread basis to deliver these benefits to our clients. 

In Action: In one illustrative example, a team was focused on reducing the time spent on manual tasks, so they invested in automation and data analysis. Working with a complex client and numerous systems, prepping data for testing previously required more than 170 steps. These steps included reconciling data, selecting samples, and preparing client requests, among other detailed tasks.

In order to automate clusters of manual tasks, the team used an advanced RPA development platform to design a workflow of only four steps -- integrating components from sample selection to request preparation. Now, pre-processing drives a more productive quality audit. The client benefits from a more efficient audit with enhanced quality and reduced disruption, and the team is able to focus on higher risk areas.

Looking ahead, with data transformation more automated, efficient, repeatable and scalable, this team, among many others at KPMG, can better handle data from disparate ERP systems. Together with KPMG Clara, this reduces the burden on clients and sets the foundation for future analytics and visualization as well as increased automation capabilities.

KPMG is focused on continuous improvement through innovation to advance both audit quality and our clients’ audit experience. In practice, our teams are doubling down on data analysis to refine risk assessments.

In Action: One KPMG team sought to better communicate decisions and deliver deeper insights to their client. In this instance, they leveraged the firm’s risk dashboard for revenue, which is part of a suite of data visualization tools for risk assessment.

“Some tools focus on automation and efficiency to cut down on workloads, but this one is all about performing a better risk assessment,” says the senior manager on the engagement.

This particular dashboard enabled our client to view dynamic, interactive visualizations of their ledger data, enabling the KPMG team to show patterns and detail insights that affected their risk assessment decisions.

“When we presented this to our client controller, assistant controller, and their internal audit team, they were all blown away.”

Our data visualization capabilities – including several pre-built dashboards – allow our clients to benefit from this capability. And, in concert with KPMG Clara, they will continue to refine our risk assessment, increasing efficiency while enhancing audit quality and delivering greater insights. That makes for a better audit experience.

Our virtual audit room is a new collaboration suite that has transformed today’s more remote KPMG audit experience.  With increased transparency and streamlined communications for our teams, our audits are more organized and efficient for clients while enabling innovation in the audit.

“The vision for the virtual audit room was to get us back to a collaborative mentoring environment, and away from the transactional, 30-minute meeting environment many companies pivoted to while working remotely,” one partner involved in our pilot program said. The virtual audit room technology provides the ability for real time conversations and knowledge sharing, which leads to a well-connected team.  “We also wanted to help establish a strong foundation for how we might enhance our ability to work remotely even after a return to the office. The virtual audit room accomplishes these goals.”

Using technology, our teams are able to increase access to lead partners and enable informal learning in the virtual environment, which is critical for sustaining team culture -- and we collaborate with clients on best practices from our virtual work environment so you can embark on this journey, too.