At the last TeamMate User Forum, I had the honor to lead an interactive session with nearly 30 CAEs from across all industries. In this session, we had a conversation about Artificial Intelligence (AI) and Machine Learning (ML). One of the most profound ideas from this conversation was that audit departments are likely to skip right over data analytics to look for automated solutions. I’ve struggled with this idea for the past few months since the User Forum. I know very well that audit departments are slow to adopt data analytics, despite the easy to use tools on the market like TeamMate Analytics. So why should I believe that we will make a huge leap that skips over the basics?
The answer hit one night while I was sitting with my 6-year-old son at a coffee shop. He was playing a game on his iPad with his noise-canceling headphones. He has no idea about the 50+ years of computing and video game history it took to get to this point. He does not need to know the progression from Pong to Pac Mac, to Mario, to Call of Duty to enjoy the cloud-based app he’s playing on a handheld device over free Wi-Fi. In just this way, an auditor today should not care about the progression from ledger books, to Lotus 123, Excel, ACL, and TeamMate Analytics. We have the benefit of just using the most recent tools.
So back to the comment from the CAE at the User Forum. We certainly could skip over traditional data analytics in favor of an AI-based, ML enabled continuous monitoring process. Not everyone is ready yet, and the technology is still catching up (albeit quickly). For right now, let’s consider this the future state, best practice for which we need to prepare. What should we do in the interim? It is time for us to think of analytics in a good, better, best format. If you are doing anything, that’s good! From there we can incorporate a better practice, and we can prepare for a best practice that is still to come.
Just like my child will never be expected to care about the Atari I had in 1982, auditors should not spend time deciphering manual test work performed on past audits. We have a better, more efficient, and effective method at our disposal right now, and we have even more sophisticated options coming really, really soon. Let’s strive to do better and plan to be the best!