Audit Automation: Ultimate Guide for Finance

Financial Automation
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Auditing company records and business processes is one of the most important tasks for its CFO and accounting staff. Because the results of audits are so important, the auditing team must aim for, and achieve 100% accuracy with every audit. 

The use of audit automation software can help CFOs meet this requirement while also simplifying the entire auditing process.

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What is Audit Automation?

Why is Audit Automation Important?

What is Digital Audit vs. Audit Automation?

What Are the Types of Audit Automation?

What Are the Benefits of Audit Automation?

What Are Audit Automation Use Cases?

What Are Audit Automation Challenges?

What Are the Steps to Implementing Audit Automation?

Audit Automation May Take Your Business to the Next Level

What is Audit Automation?

Audit automation is the process of using automated tools (usually in the form of computer software) to complete tasks associated with internal audits such as analyses or data entry. 

Originally, the auditing process required CFOs to coordinate the efforts of multiple people manually entering or interpreting, all while under time pressure. 

However, the use of audit automation tools can help CFOs and accounting staff complete this mission critical task in less time, while also increasing accuracy. SolveXia is one of the industry’s most powerful, user-friendly, and cost-effective audit automation software options.

Why is Audit Automation Important?

Auditing is a key function of any company’s accounting team and management staff. Auditing is important because the information revealed in audits is used for so many critical functions including tax filing, annual reports and distributing funds to shareholders. 

Its also critical for fraud detection, and timely and accurate revenue collection and payment of expenses.

Automating the auditing process greatly reduces the likelihood that the information contained in audits will be incorrect or manually manipulated by unscrupulous employees.

What is Digital Audit vs. Audit Automation?

Specifically, audit automation is the process of using automation tools like SolveXia to automate aspects of the auditing procedure. In almost all cases, the ultimate aim of audit automation is to maximize employee efficiency and reduce the possibility of human error yielding inaccurate results.

A digital audit differs from audit automation in the respect that digital audits employ computer software to carry out the entirety of the auditing process. A company may choose audit automation for a specific aspect (or aspects) of the audit process, or they may employ digital automation to accomplish it all. 

What Are the Types of Audit Automation?

Whereas traditional manual accounting audits mostly deal with ledgers and balances, audit automation can leverage the power of software to carry out an incredible array of company functions and research. 

Examples of the types of audit automation include:

  1. Data visualization: Using audit information to produce visual information (e.g. graphs, dashboards, charts)
  2. Predictive analysis: Uses predictive computer programs to assess risk or potential outcomes of given actions based on past data
  3. Robotic automation: Creates a set system of rules designed to simulate human activity to automate repetitive aspects of the auditing process
  4. Machine learning: Leverages data accrued over the course of time to simulate or improve given operations
  5. Artificial Intelligence: Imitates human behavior such as visual cognition, speech patterns and translations
  6. Natural language generation: Interpreting fixed data to create new non-fixed outcomes
  7. Natural language processing: Software that pulls from different data sources to generate fixed data outcomes

What Are the Benefits of Audit Automation?

Audit automation offers company decision makers a quantum leap forward in terms of the overall effectiveness and potential positive outcomes of the auditing process. 

Examples of the benefits of automating auditing procedures include: 

1. Cost-Effectiveness

Quality audit automation software can exponentially improve productivity while at the same time requiring less human intervention. This means increased savings on personnel and office space, both of which are major line items in terms of cost for every company. 

2. Accuracy

The information contained in audits will be used for all manner of mission critical company functions, which include tax filing, regulatory reporting and projecting future earnings. 

Having the process automated greatly reduces the chance of human error or malfeasance producing inaccurate audits or faulty conclusions. 

3. Reliability

Even the most accurate human auditors have bad days, lapses in concentration and other issues that can affect the quality of their work. This is not the case with audit automation because it operates exactly as it is programmed to operate for every audit or function. 

Software doesn’t get sick or need to leave work early during quarterly audits to assist with off-work emergencies.

4. Increased Transparency

The accuracy of audit information, combined with a regular audit schedule, creates a very visual and transparent chain of events, operations, and even cash flow that can be shared with stakeholders, partners or even regulators.

5. Risk Reduction

One of the main benefits of audits is that when properly done, they are instrumental in uncovering errors or evidence of malfeasance by company employees. 

A regular auditing regime in conjunction with internal audit automation can drastically reduce the chance that mistakes or intentional acts of deception will negatively affect the bottom line. 

6. Increased Efficiency

Using audit automation will also result in increased efficiency due to the speed and accuracy with which the software operates. Getting audits, or specific audit functions accomplished via automation means your audits will get done faster, and more effectively. 

That will free the auditing team up to use their collective brainpower on analyzing the information revealed in the audit as opposed to wearing themselves down collecting it. 

What Are Audit Automation Use Cases?

Lost productivity, company product or revenue are all things audits focus on uncovering. In that sense, the main focus of an audit is to ensure that all company resources are being used to their maximum benefit. That creates numerous different potential use cases for audit automation. 

Some examples of cases where automation can be of particular benefit include:

1. Accounting, Reporting and Tasks Where Accuracy is Critical

The old adage “garbage in, garbage out” means that if you base your decisions and movements on bad data, your decision making will almost invariably yield flawed results. That’s why tasks that require high levels of accuracy like reporting and accounting are a prime automation use case.

2. Manual Data Entry

Gathering data, manipulating data and generating reports are all important tasks that can also be very tedious. 

In general, the more tedious and time consuming a task is, the more likely it is that employees performing it will “drone out” or make a mistake. That’s why audit automation is such a valuable asset. It doesn’t get tired, or bored, when doing repetitive tasks. 

3. Manual Data Processing

The more employees you have manually processing data, the higher the chances of a mistake, or multiple mistakes, will be made. Audit automation software like SolveXia has capabilities that allow you to reduce errors by up to 90% and process data up to 85 times faster than human interaction.

4. Gathering Information From Disparate Sources

Even in companies with highly centralized operations, gathering data from different departments and preparing it for audits can be a difficult task. However, audit automation makes that process much more efficient and accurate by reducing the need for human interaction. 

What Are Audit Automation Challenges?

Audit automation offers many potential benefits, but it is not without its challenges. Anytime you are going from a system of manual entry or a traditional auditing method to an automated system, there are several particular areas where challenges may arise. 

1. Compatibility

One of the most immediate potential areas of conflict is in terms of compatibility with any preexisting software/auditing methods and the audit automation tool you choose. SolveXia’s automation software tools are compatible with hundreds of current apps and programs. This will help to minimize downtime from installation to full use capability. 

2. Onboarding

Ease of installation and usage learning curve are two other potential areas where problems may arise when it comes to switching over to an automated audit management system. This is another area where SolveXia’s technology shines. 

It is a no-code software solution that allows you to automate within hours with their easy to use drag and drop components. SolveXia software also features 100 “data robots” which can handle functions like reporting and deep analytics in a matter of minutes. 

3. Data Storage

Data storage is another potential challenge, but SolveXia runs on a “secured enterprise cloud” that will offer you easy access to your audit reporting and information, while also offering high level encryption to keep that data secure. 

What Are the Steps to Implementing Audit Automation?

Rolling out or implementing your audit automation software is almost as important as the software you choose. It must be an orderly process that takes several factors into account. For a smooth implementation and rollout process, consider the following steps:

1. Determine the scope and strategy of your audit

Figure out what your goals are for your auditing and how you plan to use the information you uncover. This will give you insight as to which process or processes you can automate and why. 

Once you know this, it will be much easier to match your vision to the capabilities of your chosen automation tool. 

2. Develop internal support and control systems

Automation is a powerful tool, but it must still be tightly managed and controlled. You must carefully lay out both the procedures for your auditing and clearly define the roles of the personnel involved. 

These personnel must be adequately trained and fully capable of performing their designated roles.  You must also devise and implement a system for how to handle technical issues such as making changes to your auditing automation procedures.

3. Improvise a compatible standard operating procedure

If you intend to maximize the effectiveness of your audit automation, you must also improvise and implement a standard operating procedure that is compatible with automation. 

The entire point of automation is to maximize efficiency, so you must envision a modus operandi where all the related departments and moving pieces within your organization can coordinate their efforts with the software. 

Audit Automation May Take Your Business to the Next Level

Auditing is not just for bean counting anymore. Audit automation tools like SolveXia have powerful multifunctional capabilities that allow you to do everything from automating compliance audits to running advanced analytics based on the information uncovered in those audits. 

You can also use an automation tool like SolveXia to handle expense analytics, reconciliation, rebate management, regulatory reporting and more. 

You can access this information within a matter of minutes, instead of days or weeks, which is often the case with traditional “manual entry” audits. These insights may allow you to gain new insights to take your business to another level. 

SolveXia offers an incredible combination of power, user-friendliness and potential return on investment. If you’d like to find out how SolveXia can assist with your audit automation efforts, request a free demo today. 

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