Developers can leverage advanced analytics tools to streamline and improve software, compliance, and internal controls auditing. Several novel solutions solve existing pain points, suggesting their effect on audit processes could be permanent.
How Advanced Analytics Enhances Audit Processes
Whether auditors review contracts, financial statements, code, or internal controls, their traditional techniques are tedious — and inherently inaccurate to some degree. Take sampling, for example, where they test a database subset.
It is not uncommon for sampling portions to be trivial compared to the total population. For example, while testing 500,000 Amazon transactions may seem significant, it only
Advanced analytics tools like artificial intelligence, complex event processing, and data mining enable 100% population testing because of their rapid processing capabilities. They eliminate the need for sampling, thereby reducing bias and error risks.
These tools can also enhance fieldwork, risk assessment, document reviews, and report drafting. Autonomous technologies like AI are particularly beneficial since
Examples of Successful Analytics-Based Auditing
The Internal Revenue Service (IRS) recently leveraged advanced analytics for its audits. Since
The U.S. Government Accountability Office reports that the IRS
Many leading accounting firms have also seen success. For instance, PricewaterhouseCoopers has
Similarly, Ernst & Young uses natural language processing (NLP) technology to minimize the need for manual contract reviews. It detects anomalies during review and explains its findings, minimizing the risk of material misstatements. A human-in-the-loop
Deloitte developed an AI-powered chatbot named DARTbot
Klynveld Peat Marwick Goerdeler — one of the largest global accounting firms — partnered with Mindbridge, an AI platform, to increase audit explainability. Its advanced rule-based and machine-learning technology
What Technology Can Be Used to Improve Auditing?
While many notable case studies revolve around financial, compliance, and consulting applications, this approach is also relevant for software auditing. Developers can leverage cutting-edge analytical tech to improve accuracy, explainability, and speed.
1. Data Visualization
With data visualization, developers can convert databases into graphics, charts, and tables, enhancing vendor collaboration and providing clarity to auditees. Since tools like AI can process unstructured data, they are not bound to text-based format.
2. Complex Event Processing
Since complex event processing analyzes numerous systems simultaneously in real-time, developers can detect software abnormalities swiftly. Consequently, pinpointing the source of issues becomes much more manageable.
3. Artificial Intelligence
AI tools can accelerate most auditing processes because of their autonomous and rapid processing capabilities. Developers can even use generative models or algorithm-powered chatbots to rewrite code or suggest solutions for errors.
The Benefits of Leveraging Advanced Analytical Tools
Developers using advanced analytical tools benefit from being able to audit in real-time. Moreover, they can comprehensively review entire populations instead of sampling data. These benefits contribute to a more accurate, precise, and quality assessment.