The public believes that audit could prevent corporate failure despite scandals about the auditing players worldwide.
According to the latest ACCA report Closing the Expectation Gap in Audit based on its survey of 11,000 members of the public in eleven countries including Singapore and Malaysia,70% believe that audit should evolve to prevent corporate failure.
In addition, 55% of the respondents believe that auditors could prevent corporate failure if they follow the requirements of existing auditing standards, they could prevent corporate failure.
Although some may reasonably argue that such demands are unrealistic, technology may help to satisfy the public demand, at least partly, in the future, ACCA pointed out.
“Technology offers the ability both to improve the quality of audit and to add value to it: audit is moving from being a reactive, backward-looking exercise to a proactive, predictive, forward-looking one, working in real time,” said Maggie McGhee, executive director – governance at ACCA.
As such, it provides an opportunity to help clients by providing timely insights, she added.
“Even in its traditional context, technology now offers an opportunity to produce higher-quality audits that better serve for their existing purpose,” McGhee pointed out.
Skepticism towards AI in audit
While data analytics is currently the most and used by most firms, the audit profession is still at a very early stage with AI and has not embedded it as deeply as could, said ACCA.
‘However, if AI and related technologies are fully implemented, it could raise questions about the auditor’s independence,” McGhee said.
In addition, technology can’t replace everything, she said, adding that the human relationship between a client and an auditor remains important.
On the skepticism towards technology, Simon Grant, group executive international development and Advocacy & Professional Standing at CA ANZ, said: “If we can anticipate the possible impacts of technology and harness it so we understand the benefits to the accounting profession, technological change could then be such an empowering opportunity rather than a challenge for our profession.”