Innovative approaches to audit will help Canadian companies better manage risk while strengthening their business
TORONTO, Nov. 12, 2015 /CNW/ - KPMG today released a new report, Future thought: the audit is changing, which discusses how audit delivery will be transformed by new technologies and techniques. The report specifically highlights the role that Data & Analytics (D&A) and Lean in Audit™ (Lean) methodologies will play in helping to evolve the practice of audit.
As companies face increased governance expectations from regulators and shareholders, their boards and audit committees are demanding deeper insights from audits to help them better manage risk and optimize performance. This has resulted in a period of audit evolution over the last decade, with technology playing a key enablement role.
The D&A and Lean approaches are designed to add value to the audit and increase audit quality for companies, but when they are effectively integrated the qualitative analysis and quantitative understanding allows for better insights. This enhanced methodology can provide companies with increased value in their audit.
D&A multiplies auditors' access to data – When a D&A strategy is employed, the result is that more financial statement data is accessible for analysis. This not only enables invaluable benchmarking of a company's performance against industry peers, it also can increase the speed of analysis of company information and make it possible to perform continuous audit, from quarter to quarter. This provides audit committees with even more confidence in the quality and accuracy of their audit since their auditor can provide a more granular analysis which can help improve compliance, potentially uncover fraud, and ultimately strengthen their business.
Lean in Audit™ adds value to process – Lean in Audit™ is a disciplined, process-oriented methodology that helps enable auditors to engage directly with company stakeholders and includes extensive process mapping to achieve a detailed understanding of the financial processes and opportunities for improvement. Through this approach, companies can better identify potential risk, particularly gaps between functions and hand-overs among processes, which can occur in today's complex organizations with intricate business processes and elaborate functional and operational structures.
The report discusses how D&A and Lean are significantly changing the kinds of conversations companies can have with their auditor. These deeper discussions can ultimately help companies identify and address risk, improve audit quality and efficiency, and empower them to make the best business decisions for the future.
"Since the global economic crisis, heightened regulatory and shareholder interest means that corporate boards and audit committees are seeking more from their audit. They want auditors to have a stronger understanding of their complex businesses and internal processes so they can spot issues earlier and make crucial decisions to help improve performance, quality and efficiency."
Doug King, National Data & Analytics Leader, KPMG
"Our report findings mirror the growing interest among clients for value-added audit services that provide greater insights into their business. Uncertain Canadian economic conditions mean that companies want to capitalize on the deeper, richer information now available to help maximize their efficiency and adaptability."
Lee Alfrey, National Lean in Audit™ Leader, KPMG
About KPMG's Future thought: the audit is changing report
This report is based on insights from KPMG partners and senior audit professionals with KPMG Global Audit, KPMG in Australia and KPMG in Canada, based on their application of leading technologies and processes to serve clients at KPMG member firms.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member firms around the world have 162,000 professionals, in 155 countries.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.
SOURCE KPMG LLP
For further information: Tonique Bedeau, National Manager, Communications, KPMG in Canada, 416.777.3241, [email protected]