Issue 5 |September 2017

While constantly contending with the relentless pace of technological change facing the audit profession, value can be derived from pausing regularly to assess client perceptions of the current and future role of the professional auditor.

To put things in perspective, when I was acquiring my accounting education in the mid-1960’s, I accessed the university’s IBM 1401 computer system to process my programming assignments. I sat at a typewriter-like machine punching holes into cards that would form a deck that I fed into a card reader that in turn converted the strategically placed holes into electronic impulses processed by the computer. Now fast forward to 2011. According to an IBM publication issued for the company’s centennial that year, “the IBM 1401 computer weighed about five tons and had about 16 kilobytes of memory. By comparison, modern cell phones are about 10 million times faster.” And that was six years ago.

As the mind tries to grasp the full impact of that last statement, let’s turn to the more familiar domain of surveys and responses. In recent months, both KPMG and Deloitte have surveyed company executives and audit committee members for their insights from interacting with their company’s external auditor. The Deloitte survey focused more on current value from the audit, while KPMG asked mainly about future expectations.

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As was alluded to in the above article, there has been and continues to be a geometric increase in the speed, capacity and pervasiveness of technology, accompanied by a corresponding reduction in complexity for the user. Mobility has been a force and benefactor in these trends, while security sophistication races to keep up. Most areas of our lives are impacted by these developments, and the audit profession is no exception. Since the assurance function is the one CPA-exclusive franchise, forward-looking diligence is a must in order for the profession to preserve the relevance of that distinction.

The multi-national accounting firms, with their wide array of resources, have been proactive in incorporating the new technologies into the audit process as they emerge. To gain insights into these innovative developments, let’s take a look at some of the applications Deloitte and KPMG have added to their set of auditing tools of the trade.

More "Future Looking Audit Techniques...."

IASB – International Accounting Standards Board (www.ifrs.org)

1. International Financial Reporting Interpretations Committee IFRIC 23: Uncertainty over Income Tax Treatments - issued June 7, 2017, “provides requirements that add to the requirements in IAS 12 Income Taxes by specifying how to reflect the effects of uncertainty in accounting for income taxes. The effective date is January 1, 2019.

IFAC – International Federation of Accountants (www.ifac.org

1. Making Regulation Work, Principles and Models for the Accountancy Profession, guidance issued on August 7, 2017, to assist accounting firms “in their efforts to adapt to recent regulatory evolution, and actively influence stakeholders and influencers.”

More "Worldwide Update...."