Big four firm tips major SMSF audit shake-up
One of the big four firms believes the nature of the SMSF auditing industry and the role of the auditor is set for a significant shift, with change in some cases occurring at “unimaginable speeds”.
Speaking to SMSF Adviser, Lisa Chehab, director for assurance and advisory services at Deloitte, said having a robot perform SMSF audits “might not be too far away”.
“Some organisations have already released advanced machine learning robots which are trained to, read, analyse and predict risks across supporting documentation such as contracts. This will mean that auditors will no longer be spending time reading and trawling through supporting documentation to perform the same analysis,” she said.
Ms Chehab believes that as machine learning robots become more advanced, the industry could potentially see them being linked to material from the regulators, professional bodies and SMSF-related media to predict increased audit risks.
“There is no question that artificial intelligence (AI) will significantly reduce the time it takes auditors to research and perform audit procedures. By freeing the auditor from the more mundane aspects of the audit, AI is expected to be able to enhance audit quality, while remaining cost effective in this highly competitive market,” she said.
“As a result of increasing the use of AI technologies, the role of the auditor will shift towards a focus on exception-based testing, and the provision of greater insights to clients," she said.
Ms Chehab noted auditors are now able to use advanced data analytics as part of the financial statement audit to highlight exceptions and unusual transactions and cover a greater number of samples.
“At this stage, auditors are not able to fully benefit from consolidated electronic data analysis as there are still a number of external providers that are yet to make their data available. However, in the next couple of years we should see many more providers joining the cloud paradigm,” Ms Chehab said.
Ms Chehab also believes the concept of real-time auditing, which has been championed by Deloitte partner Jo Heighway, is becoming a closer reality.
“With the amount of data being made available and the power of data analytics, continuous auditing will free an auditor to think about exceptions and be able to provide insights in real-time or near real-time. This has significant benefits in terms of identifying any compliance issues early on,” she said.