In the world of auditing, where precision and control are vital, two game-changing forces are coming together to reshape the way audits work: PCAOB’s new standard and the powerful abilities of AI technology. This blog explores how these two elements work hand in hand, especially in the context of controls, and why AI technology is essential for auditors today.
PCAOB’s New Standard: A Control-Centric Revolution
Imagine a world where controls are not just safeguards but crucial pillars. PCAOB’s recent adoption of a new standard, titled “Modernizing Requirements for Auditors’ Use of Confirmation,” ushers in a new era where controls take a central role. This standard amplifies auditors’ responsibilities, putting controls in the spotlight for aspects such as risk assessment, supervision, review, and fraud risk considerations.
Deloitte Poll: Controls Amidst Transformation Challenges
Simultaneously, a recent Deloitte poll conducted in September 2023 unveils the challenges organizations encounter in controlling internal controls, especially during transformative phases.
Continuous Vigilance and Adaptation: A staggering 36.4% of respondents disclosed that they review internal controls more frequently than once a year. This underscores the need for vigilant, real-time monitoring and controls that can adapt swiftly, particularly in response to the whirlwind pace of technological transformations.
Question: Is it feasible for organizations to review internal controls frequently, similar to the 36.4% of respondents, without leveraging technology? The answer lies in recognizing that continuous control monitoring and automated controls are the only realistic means to attain such adaptability and vigilance in today’s swiftly changing landscape.
Skilled Personnel Gap: The Deloitte poll brings to light a concern voiced by 24.0% of respondents: a shortage of staff equipped with the skills needed to effectively implement internal controls aligned with transformation goals. This elevates the role of skilled control practitioners in this landscape.
Question: How can organizations address the challenge of a shortage of
skilled personnel, especially when internal auditors are seeking more impactful
roles? The solution lies in adopting tools like Datricks, which require no
extensive training yet provide internal auditors with the capabilities that
resemble those of data analysts. This empowers them to focus on more strategic
AI Technology as an Internal Control Booster: The Deloitte poll reveals that 35.9% of respondents recognize AI’s potential to significantly enhance internal control environments.
Question: How can organizations strategically embrace AI’s potential to enhance their internal control environments while effectively managing the perceived risks? The answer lies in adopting AI technologies that are designed to integrate seamlessly into the internal control landscape, offering real-time monitoring, advanced analytics, and automation.
The Control Nexus: New Standards, AI Technology, and Auditors’ Reality
Examining PCAOB’s new standard, the Deloitte poll results, and the central role of controls reveals an intriguing story:
Enhanced Risk Control: PCAOB’s standard propels risk controls to the forefront. In a landscape where AI is seen as a substantial risk by 44.7% of respondents, this standard becomes pivotal in addressing these concerns through enhanced risk controls.
Continuous Vigilance and Control: With 36.4% of organizations already reviewing internal controls more than once a year, AI-driven real-time control monitoring, exemplified by Datricks, seamlessly aligns with the standard’s call for continuous control adaptation.
Controlled Skills Gap Bridging: The shortage of skilled personnel, highlighted by 24.0% of respondents, can be mitigated through AI tools like Datricks. These tools empower auditors with advanced control analytics, reducing the impact of the skills gap in control management.
The Indisputable Imperative: Control Through AI Adoption
In the fast-paced world of auditing and rules, AI technology like Datricks isn’t a choice – it’s a must. It’s the key that makes PCAOB’s new standard even stronger. With AI-powered control tools, internal auditors can handle changing control rules with accuracy. As organizations deal with complex control issues during changes, AI is the tool that helps auditors have more control, ensuring top-notch audit quality and integrity in this era of evolving controls.