COVID-19 has been a challenge for everyone in business. For auditors, one of the major tests of resilience arose from the need to work from home. How can you audit a company entirely off premises? The experience has given us, and our clients, confidence in our ability to complete end-to-end audit activities on a remote basis, as well as encouraging us to transform further by continuing to invest in our people and technology – including new solutions based on artificial intelligence (AI).

Back to first principles: the characteristics of a quality audit

One of the main reasons we at PwC have been able to rise to the COVID challenge is that we had already been re-assessing the way we audit and whether it would be able to keep pace with increasingly rapid change. That’s what drives us today, and it’s how we’re bringing the audit into the future to give clients deeper insights, save them time and deliver exceptional quality. We subsume the benefits for our clients into six main dimensions (see figure). Here we describe two of the most relevant attributes and the approaches we’re adopting to ensure our audits incorporate them.

People-powered

Even before the pandemic, we realised that new technology alone would not be enough to assure an exceptional quality experience for our clients. Our approach involves bringing the best of humans and machines to the audit. We’ve invested a great deal in digitally upskilling people so that they’re able to combine digital abilities with their audit intelligence. Recent months have proven the value of this blend of people and technology in a fully remote working environment. Without tech, remote audits wouldn’t have been possible. But without people capable of using this tech and interpreting its output, it wouldn’t have been possible to generate insights, recognise patterns, customise the audit – and exercise judgement where appropriate.

Customised

Customisation is crucial to the precision, transparency, efficiency and insight we’ve talked about. To help eliminate busy work and reduce the potential for errors, our auditors build automated workflows and data visualisations tailor-made for the specific client engagement. This takes us full circle, back to people-power: there’s no customisation without a digitally savvy workforce of people who are skilled and empowered to use the latest tech to solve audit and remote working challenges.

Existing software solutions: empowering auditors to address needs accurately

One means of customisation is to use existing software to tailor the audit approach by building suitable workflows and visualisations using software solutions readily available in the market.

These include workflow automation, using a software called Alteryx to combine, wrangle and prepare data for further analysis to automate repeatable tasks and minimise the risk of human error. We also use data visualisation software (PowerBI and Tableau) to explore data, gain insights and recognise patterns, enabling a more risk-based, targeted approach to sampling and providing deeper insights to clients. In addition, our auditors can use the snipping features of our intelligent audit platform DataSnipper to extract data from PDFs, images and other formats, as well as matching Excel data with source documents like invoices and contracts. DataSnipper also enables the consistency and mathematical accuracy of financial statements to be verified.

The next step: artificial intelligence

After the standard software described above, the next step on the audit transformation journey is artificial intelligence (AI).

In Switzerland we’ve already rolled out two AI-based tools developed by PwC: ADAM Automated Document Classifier and Matcher, and ALI Automatic List Inspector. ADAM classifies and analyses client documents intelligently and automates (revenue) sample testing procedures by matching the uploaded documents to the single item of the sample file and summarising the results in an evaluation report. This allows more efficient revenue testing and gives the audit team more time to focus on individual findings, topics and risks. ALI enables higher quality and more efficient processing of checklists of notes to IFRS financial statements. It does this by checking disclosures in IFRS financial statements automatically to a certain extend and learning with each field application. ALI ‘remembers’ the mapping from the previous year, helping us apply it more quickly the subsequent year.

We continue the journey harnessing the power of artificial intelligence (AI) to transform our audits. Award winning first AI modules are the detection of fraud and error with the so called GL.ai solution and our AI approach to auditing Cash with our Cash.ai solution both of which are currently in extended piloting phases. Additional innovations are in the pipeline.