At present, accounts auditing work is involved in a paradoxical challenge, as it is caused by something which offers it great solutions: new technologies.

Every day, companies have available to them new systems which optimise the processes for handling information, increasing their management capacity and reducing organisational structures, but at the same time causing processes to be more abstract and complex.

These new processes have mainly arisen as a response to a pressing need resulting from the growth and globalisation of companies, which must be capable of processing and analysing large amounts of information for expressing the financial reality underlying them. As a result of this, a new difficulty arises when verifying that this expression of the facts is true to reality. This, therefore, is the great challenge which will be faced by auditors in the near future.

All the actors involved, such as developers, accounting regulators, international bodies, associations and auditing firms agree that this challenge is also a great opportunity to improve the efficiency and assignment of resources in auditing work. As regards this point, it is worth emphasising the stage of implementation in which these techniques find themselves, based on the macro-analysis of data and information processes in order to understand the path to take and future possibilities opening up to us.

In view of this challenge, we may differentiate between the foreseeable impact depending on the type or structure of firm in question. Thus, large-scale firms will have no difficulty in developing systems using data analysis in the management applications of their clients since, on occasions, they may use these systems for several auditing works given their high turnover and the size of the companies they audit, so they will be able to make the development of applications and analysis systems profitable more easily.

However, for smaller auditing firms, we find a different scenario, as a single firm will have difficulties in developing an analysis system and obtaining sufficient profitability from it, on only being able to use it in a limited number of auditing works, with the invoicing obtained from them in many cases being insufficient for making these investments. In order to overcome this handicap and for the whole auditing sector to have these new techniques available, it is necessary to develop transversal applications, i.e. of a general nature, which allow themselves to be used with multiple clients and auditing works, by several firms, offering an affordable price since their development and marketing costs can be shared by various companies in the sector.

In short, it should be noted that solutions exist, they just need to be in demand and their development must be possible in terms of profitability.

Having understood the situation and challenge involved in global solutions, we may examine in greater depth the specific possibilities that technology offers us, and find various aspects related mainly to improving efficiency and increasing the confidence in auditing evidence.

Firstly, with the application of big data and data analysis, it is possible to gather audit evidence from a very high percentage of a population, or even all of it, without this involving a greater need for resources, but offering greater confidence in the evidence gathered.

Going one step further, techniques exist which are already being applied, which are related to artificial intelligence or machine learning, and which consist of monitoring accounting transactions in real time, giving the system the chance to “learn” about the usual processes, thus detecting any incongruences or irregular situations arising, for example, from a situation of manipulation or fraud: we may view this as a type of ongoing control or audit of the processes. At this point, it is important to emphasise that the auditor must maintain a suitable level of professional scepticism, as the applications and systems may contain errors leading to mistaken conclusions.

The examples mentioned and the scenario analysed can not be understood without the new focus for the work of the auditor, risk-based auditing, for which these solutions do not involve any problem, as they only offer the vehicle for obtaining evidence and detecting incidents, with the path to be taken being the same: detecting risks and analysing how the company has mitigated them, to eventually verify that the Annual Account are an accurate image of the financial reality of the companies.

To conclude, we cannot forget the regulatory development involving in the auditing profession which, in the future, is likely to be based on the experience obtained from the application of the new techniques, i.e. for a time, techniques will be used without them being regulated by the ISA, with the application being necessary in this case of the professional opinion of the auditor in order to maintain the quality of the auditing work in a new and changing scenario. Furthermore, it will be of great use to train the auditing team members in these new technologies, including profiles with knowledge of computing and programing.

Juan Mª Blázquez Hernández, Auditor at Auren