Whitley Penn is a large, Texas-based large accounting firm with offices in Austin, Dallas, Fort Worth, Houston, Plano, and Texas City. The firm serves clients in the areas of audit and assurance, tax services, risk advisory, wealth management, forensic litigation and valuation, consulting and transaction advisory services. Founded in 1983, Whitley Penn employs 550 professionals, including 66 partners and around 200 auditors.
The firm identifies its primary mission as "providing an unmatched level of high-quality service" to clients. Audit Manager, Andy Hines, CPA, has been with the firm for nearly a decade. He sees accounting firms facing a number of challenges, including: increased competition among firms around audit prices and services and the need to add more value for clients. Hines sees several keys to firm success in light of those challenges. He explained:
"In the accounting industry, we are seeing a race to the cheapest price—the commoditization of the audit process. We have to find new ways to add value for our clients. We need to create a more efficient audit through technology, so we can do more with less, resulting in a better price while adding more value."
Whitley Penn defined three objectives to help its audit teams deliver the best possible product for clients:
- Find and implement technology that creates a more efficient audit process to control client costs while improving firm realization.
- Enhance audit quality and value delivered to clients.
- Provide a data-driven audit by incorporating analytics.
To achieve these objectives, Whitley Penn relied on audit technology solutions from Wolters Kluwer to refine their audit process. The firm adopted Wolters Kluwer's Integrated Audit Approach, leveraging CCH® ProSystem fx® Engagement, CCH® ProSystem fx® Knowledge Coach, CCH® ProSystem fx® Accounting Research Manager®, TeamMate® Analytics and CCH® Audit Accelerator. Here's how these integrated audit solutions improved the audit process and deliverable for Whitley Penn:
Improvement #1: Integration drives efficiency
To develop a more efficient audit approach, Whitley Penn added Knowledge Coach to its existing Engagement and Accounting Research Manager solutions. Knowledge Coach takes a holistic audit approach and auditors now easily link planning procedures with audit procedures and wrap-up procedures. It is easier to identify risks and see what procedures were performed to mitigate them.
Integration between Knowledge Coach and Engagement boosts audit efficiency. After the first-year investment of three to four hours to plan each client's audit, the audit plan can roll forward in subsequent years, giving auditors the choice to update and keep prior customizations. Planning meetings for existing clients only take about one hour.
Getting data from clients to start the audit was always a source of frustration and delays. "They don't want to pull this stuff for us—it's tedious and time-consuming. Audit Accelerator saves time and stress, both on our side and for the client; I think relieving the stress is even more important than the time savings," said Hines. Instead of waiting for clients to work through a lengthy PBC list, Whitley Penn employs CCH Audit Accelerator to connect directly to the client's ERP or accounting system with the client's permission. The firm pulls what's needed, saving clients and auditors hours—if not days—at the front end of the audit process.
"Seeing the Integrated Audit Approach between Knowledge Coach and Engagement has been great. Realization in the second year of using Knowledge Coach is through the roof. The subsequent procedures have gotten faster as we've pared down audit steps that weren't adding value."
Download the case study to read the complete Whitley Penn story, including how they set up their champion teams to achieve great adoption of analytics across their large staff.
Improvement 2: Knowledge Coach builds accuracy and quality into each audit
Knowledge Coach guides auditors to tailor each audit for the unique risks inherent to the client entity. Hines explains that with Knowledge Coach, auditors "assess the materiality of each audit area and what assertions need to be tested. Then we determine which steps to take in the audit program. We take testing out or add testing in to be consistent with our planning approach."
Any new risk identified by the auditor will flow through the audit program, prompting corresponding alterations to the audit plan. The solution prompts auditors to create linkages between risks and procedures, and diagnostics identify areas that may be over-or under-audited, so teams can decide whether to add or remove procedures. According to Hines:
"Knowledge Coach forced our firm to review our audit process, as well as the procedures for individual audits, to determine whether procedures were relevant. By no longer doing procedures around items that do not present significant risks, or items we could test in another area or through analytics, our realization has increased."
Improvement #3: Audits more data-driven with TeamMate Analytics
TeamMate Analytics is a robust yet easy-to-use audit data analytics solution that provides 150+ tools for auditors within the familiarity of Excel. When Whitley Penn first incorporated TeamMate Analytics into the audit process, they made it available to all but did not tell auditors what tests to use. Adoption was hit-or-miss with this approach; however, the firm quickly identified its power users of audit analytics. They formed "super champions" teams to help other auditors, and Hines used a feature called Expert Analyzers to create standardized test modules to be used across Whitely Penn.
Using analytics improves audit quality by enabling auditors to move away from sampling and test more client data at a 100% level. Hines noted:
"Our audit process is going to change dramatically. It's going to be more data-driven, more analytic-driven. There will be probably less sampling and more testing done at a 100% level than what we've been doing in the past."
Using Audit Accelerator and TeamMate Analytics together empowers auditors to leverage client data and harvest deeper insights, adding value for clients. For example, Hines noticed one of his clients had large drops in gross revenue two months out of one year. Using visualization tools in TeamMate Analytics, he created a graph comparing the trend against the prior year, helping the client identify the trend for further analysis.
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