Speed Up your Audits
An enterprise audit exercise can be time consuming and expensive if done in the traditional way. Though it is necessary for the audit team to visit the client premises to examine the documents during the exercise a small change in the method of generating the financial statements, taking feedback from the audit incharge and finalising the financial statement can significantly shorten the time taken to complete the audit exercise.
The current method of commencing the audit begins with the client handing over the Trial Balance as a CSV, XLS or XML file by email or thumb drive to the auditors office. A person from the auditor's team then imports this trial balance into their own application. In our experience in working with auditors we found that importing the trial balance, handed over by the client, into the auditor's application is prone to manipulation or corrruption during transit or transmission.Usually when electronic documents or application are handed over the checksum is verified at the destination to ensure that these documents are not manipulated or corrupted during transit / transmission.
Lets say that we would like to download and install an application on our laptops. When we download the binary installer we also download the checksum. The checksum is a series of alphanuimeric characters that is constructed using a cryptographic algorithm. It looks something like this :
e21205b207c3ff031906575712edab6f13eb0b361f2085f1f1237b7126d785e826a450292b6cfd1d64d92e6563bbde02
After we download the application we should compute the hash and compare it with that issued by the publisher or maker of the application. Most operating systems and programming languages support generation of HASH keys using various cryptographic algorithms. Verifying HASH keys is the fool proof method of veryfing if an elctronic artefact has been tampered with during transit / transmission. However audit personnel being nmon technical skip this important step.
To preserve the sanctity of the Trial Balance when it is handed over by the client to the Auditor we propose that the Trial Balance be uploaded by the client (as opposed to handing over) into the audit application using an API or Application Programming Interface secured over an HTTPS connection. This ensures that the Trial Balance received at the Auditor end is reliable. This mechanism ensures that the transfer can be completed in a few seconds over a broadband connection with reasonable bandwidth.
In our experience with auditors we also found that generating Financial Statements after each correctyion voucher is passed and obtaining feedback from the client and an "OK" from the audit incharge can go on for several iterations that sometimes lastyed for several days. To shorten the time its nice to have a facility for both the client and the audit incharge to view the financial statements on demand, compare versions beforew and after a voucher is passed and provide feedback to the audit team.
Our other finding is that auditors find it quite cumbersome to compare the Financial Statements of previous years and provide print ready formats as it involves several external woirdprocessing, presentation and typesetting tools. To ease this it would be nice to have the facility to generate Financial Statements in PDF, Spreadsheet, Wordprocessor formats.
We feel all these features go a long way in speeding up the audit exercise. As a result we put our learning into a Cloud based application that is buit on a vendor agnostic AB Platform. The AB platform supports Open Banking API standards like JSON, JSON-LD and Hydra.
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