Audit Data Gathering in Ten Minutes or Less
Whether you were the auditor or the management in charge of an audit and even if you’ve tried to forget it, I’m sure you remember your first audit. Do you remember how long it took? A couple of hours? A few weeks? What was it like for the audit team to get all the data together? A picnic, right? I could be wrong, but I’m going to guess that’s not likely.
Imagine a world where it only takes 10 minutes to gather company data. Imagine putting standards and processes in place that could provide you with the data you need today. You may think that’s impossible, but we’ve seen it done. Whether it is for internal analysis, external audits, or company oversight, it is becoming increasingly important to obtain data on demand. With the help of the AICPA’s new, non-authoritative audit data standards, this is now possible.
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Audit data standards are non-authoritative, uniform standards developed by the AICPA’s Assurance Services Executive Committee’s Emerging Assurance Technologies Task Force. The newly-released base standard, general ledger standard and accounts receivable subledger standard seek to increase audit efficiency and facilitate automation and enhancements in the analysis of business information.
In a pilot, run by Hewlett-Packard Company, internal audit staff was able to whittle a two-week data gathering process down to a mere 5-10 minutes. By mapping their general ledger data maintained in their enterprise resource planning system to the audit data standards, HP was able to shrink the data gathering timeframe down to the time it takes to check your morning email.
This blog post provides details and a background on audit data standards and, in this video from the AICPA’s spring governing Council meeting, I explain more about the HP pilot program’s success.
The AICPA and its task forces, like those driven by the Assurance Services Executive Committee, are committed to developing new technologies that will contribute to the effectiveness, timeliness and efficiency of the audit process. Those task forces include the Continuous Assurance Working Group, Audit Data Standards Working Group and Sustainability Assurance and Advisory Task Force. Audit data standards are just one piece of the puzzle but with the right innovative thinking and change management, the end result could revolutionize the audit process, open the doors to new service offerings and change the way CPAs work for the better.
If the future of data gathering is shrunken down to 10 minutes, what could be next? The possibilities are endless…
William R. Titera, CPA, Partner - Professional Practice - Auditing, EY. He is the Chair of the AICPA’s Assurance Services Executive Committee and is the current chair of ASEC’s Emerging Assurance Technologies task force.