In the last article, I had mentioned about the need for digitalization in Audit and why and how enterprises are moving in that direction.
Here, I wish to present my views on What are the benefits of Digitalization.
The most important and compelling reason for digitalization undoubtedly is enabling the "Audit Team" to keep abreast with the "Auditee" who is or has already advanced technologically.
What other benefits can be expected; well there are many. Some are Tangible and some others are Intangible, some have Financial Impact and some have an Economic Impact, some are realised in short term while some others can be redeemed in Medium to Long term, some have a Direct Impact while some have an Indirect or Cascading Impact. What is definite is that there are benefits and they are numerous. Let's list some of them down; the ones that are most striking.
The efficiency of the Audit team will drastically increase with digitalization. The Auditor is no more spending time on multiple data entry of the same observation, he is gets more organised, he has lot of information, he has a place to turn for information and the list goes on. While the Auditor is more efficient, the central audit team is also saving time; they are jo more spending time in collation excel files, they do not need to spend time in standardizing Auditors' comments; They can now spend time in analyzing the information which is collated and standardized (at point of origin) and organised by a digital tool; only to DECODE and present the information to the CAE (Chief Audit Executive) and to others concerned.
This directly leads time save and all of us know that TIME =MONEY!
Digital Evidencing saves a lot of cost as any and every evidence from an audit is collected and stored digitally; directory impacting the cost on storage and retrieval as both become extremely simplified. This also increases the possibility of Evidencing. Imagine Picture, Video and Audio evidences, and Geo tagging being available to substantiate the finding of an Auditor! and that too with no compromise on the data while being saved on his phone or camera and being shared through social media such as WhatsApp hitherto. The authenticity of an Audit Finding increases multifold with such a tool.
A digital tool would enable Real-time or Near Real-time (if it works offline) reporting. Think of a risk being identified in a quarterly audit that takes a month for completion (Audit Cycle for all Auditees) which further takes 2 to 3 weeks to get compiled and presented to the concerned. From the point of Identification to reporting it continues to be there for close to two months!! Real time reporting enables quick corrective action which transpires to Indirect and Economic benefits depending on the nature of Risk.
Audit Findings more commonly known as Issues maintained and tracked manually result in issues falling out of tracking mechanism over a period. The risk that is inherent stays there and continues to cause Financial or Reputational loss. Digital tracking if issues with a window to close them digitally and a trigger based reminder and reporting mechanism can be made possible by a smart solution. Efficient and Effective tracking of issues result in better Controls which again have multiple benefits.
The above mentioned are only a fraction of the benefits digitalization can bring in. Common repository for Policies, Process Manuals and Guidelines, Knowledge Sharing, Training, Effective Planning, Ease of developing Audit programs, automated scoring and rating, are a few more which ay end at possibly reduced need for printing and saving stationary and storage related costs. No wonder the CAEs across Industries are moving towards digitalization. All that is needed is Identification of a suitable tool and Effective implementation. More on that, in the next article of the series.