The most common reactions to the word “audit” are fear and anxiety. Even with standard annual compliance audits, it’s hard not to worry about auditors going over your money with that proverbial fine-toothed comb and asking embarrassing questions. But an audit can and should be an active process that gives you confidence in your company’s financial health. So, besides keeping your organization in compliance, how can auditing improve organization performance?
The main goal of any audit is to ensure that shareholders get the peace of mind they desire. The audit focuses primarily on identifying any issues that may affect the company’s shareholders’ current and future invested capital.
Strengthen weak links.
Many organizations need to be made aware of weaknesses in their internal operations. Financial statement audits provide an in-depth analysis of systems and processes and are, therefore, very effective in highlighting deficiencies and weaknesses. Audits detect errors and recommend changes companies can make to reduce risks and vulnerabilities. This applies not only to current vulnerabilities but also helps identify potential future problems. Examples of risks that can be identified and minimized include fraud, employee error, health, and safety issues, loss of key personnel, failure of IT systems, and loss of suppliers.
Audits identify opportunities to improve business performance by highlighting actions that could be completed more efficiently. The systems and processes implemented by management are evaluated in the audit, and recommendations for improvement are made to the manager/manager.
Provide valuable information.
Research shows that managers increasingly use audit results to inform business decisions, providing independent information to assess business performance. Audit reports include objective analysis, recommendations, and insightful comments. It is a remarkable opportunity to gain an outside perspective on how your organization works and can be used to help the organization achieve its goals.
Top Trends To Follow For Audit Firm’s Better Performance 2023
Over the last many years, we have evolved to become acutely aware of how quickly the unexpected can upend our assumptions. Undoubtedly, uncertainty, everything from inflation and macroeconomic volatility to geopolitical uncertainties and regulatory shifts has dominated discussions across all industries and regional organizations.
However, some emerging trends in accounting have gained momentum in recent years and will almost certainly continue to accelerate in 2023. As accounting executives look to the year ahead, here are three forecasts about the auditing trends change that will reshape the audit function and why organizations should respond to these trends sooner rather than later.
Your technology strategy will become your people strategy.
Recruiting and retaining talent is one of the biggest challenges a CFO will face, and understanding employee needs can help alleviate this challenge. For many, the answer is meaningful action, and CFOs know technology has a big part to play. A global survey of 260 CFOs encountered that almost half (48%) plan to invest in technology to simplify finance tasks. Even more surprising, nearly all (99%) of those prioritizing technology believe that technology updates will become more critical to attracting and owning employees.
For auditing, finance, and accounting teams, doing meaningful work means more than manually compiling data or managing legacy spreadsheets day in and day out. Technology can automate these manual processes, freeing employees to focus on more value-added outcomes, such as identifying trends in data to help businesses understand the “why” behind the numbers. This will become critical in a job market where skilled finance workers enjoy permanent bonuses. According to figures, 82.4% of public finance and accounting firms’ hiring managers say retention is a significant challenge. Investing in technology that automates core processes and simplifies the user experience is essential to producing and maintaining a professional and agile finance team.
The journey to zero-day closure will increase the adoption of accounting automation through artificial intelligence and machine learning.
Traditionally, reconciling financial statements (whether monthly, quarterly, or annual) at the end of a reporting period is a labor-intensive process that can take weeks to complete. But arduous and prolonged downtime doesn’t just drain resources; it drains them. It also slows down data analysis and the speed at which information gets into decision-makers hands—a critical weakness in today’s highly uncertain and rapidly changing business environment, where actionable information can quickly rot.
But one of accounting’s most ambitious goals is to change that: Zero-day closing of the books at any time with intelligent automation and always-available and up-to-date information, dramatically accelerating the pace of internal reporting and data analysis. No wonder 86% of CFOs, according to Gartner, said their goal is to achieve faster real-time settlement by 2025. Over half of the respondents have deployed investments such as public ledger technology and workflow automation.
While closing zero-day vulnerabilities is the ultimate goal, every step toward that goal—such as automating manual data entry for invoices or creating manual logs—improves day-to-day processes that truly enhance the finance function. My team is currently working on a zero-day shutdown. With artificial intelligence and machine learning in our system, we’ve gained nearly 100% billing accuracy and cash flow automation, and we’re now doing a meager percentage of manual journal entries. When exceptions do occur, they occur quickly so we can handle them before they affect shutdown.
Auditing will increasingly play the role of a partner in enterprise value creation.
In an increasingly demanding and interconnected business environment, top management understands that real-time, data-driven decision-making is more important than ever. While accounting and auditing have traditionally been considered a purely digital profession focused on historical data, technology, and transformation have repositioned accounting at the heart of strategic decision-making and value creation. Auditing and Accounting executives, for example, play a key role in driving an association’s environmental, social, and governance (ESG) strategy by using technology to analyze surface data and insights and influence ESG investment decisions.
Whether highlighting the financial impact of strategic and operational decisions, identifying red flags and inefficiencies, or assessing opportunities for reinvestment or improved performance, technology enables accounting teams to uncover information in real time and analyze the drivers behind the data. Our value as accountants or audit firms in UAE is increasingly reflected in our ability to share knowledge and collaborate with other small business dubai functions to guide strategic planning and decision-making.
The trends reshaping the accounting and finance industry are not entirely separate from the increased economic uncertainty and volatility in the businesses in which organizations operate today. In many ways, the imperative to improve adaptability and flexibility has accelerated the profound changes that are taking place across the organization in how accounting, contribution, and collaborative work is made. For those working in accounting and finance, this year looks set to be an exciting and far-reaching one.
At VVAS, auditing is more than just a job; we are the top-notch audit firm in UAE that strive to improve the firm’s performance with perfect auditing. This is an opportunity to gain insight into a client’s business—a powerful lens that reveals the industry’s current state and provides insights to identify future goals. Audits can improve institutions, increase trust, and help the multi-trillion-dollar capital market system operate more confidently.