Forensic auditing tech in a digital future is analogous to Moore’s Law, named for Intel co-founder Gordon Moore. Just as he contended that integrated circuit power would double every two years, new accounting technologies are developing much more quickly today than ever before.
The real-time insights into areas of heightened risk and in internal controls as one of the most important benefits of advanced technologies in financial reporting. To that end, the continuing advancement of audit data analytics will play a major role. As opposed to working with a sampling of transactions, data analytics can examine 100% of transactions at a speed and pace unimaginable two decades ago.
While many businesses more clearly understand the need to be ready for a cybersecurity breach, an internal threat or fraud demands an equal level of preparation. It is vital that organizations approach the challenges they face in a disciplined way by understanding the protection choices they have and deploying the right solutions in an orderly manner. Mission-critical items range from vetting lawyers and forensic accountants to make sure they have no conflicts of interest, to setting up contracts for fair pricing in an efficient, non-stressful situation before fraud strikes.
Why is it so important to care for these details in advance? In the event of a breaking case of fraud, businesses can move on an action plan and not lose any time in those first few hours, when evidence can be compromised. Advance planning can mean the difference between confiscating a laptop right away, or losing valuable time and evidence while thorny details are worked out.
Meanwhile, forensic auditors will want to bolster their own preparation by doubling down on education. Just a generation ago, much of the auditor’s work was done with phones and fax machines. Today, between 24/7 connectivity, mobile technology, big data and massive increases in speed, “slow-down time” is a must. Auditors need to step outside the workday flow and devote time to learning about the latest industry developments through conferences, courses and online research. Advances in auditing that once took decades to unfold have been compressed into months—and sometimes, weeks.