Robotic Process Automation Transforms Accounting And Audit Practices
Robotics Process Automation (RPA) is transforming companies’ accounting workflows and audit processes in major ways. As RPA robots (bots) are configured and deployed to handle the time-intensive, repetitive audit-related tasks, as well as processes within the audit cycle, the effect is more reliable results and a more efficient team of auditors and accounting professionals. The CPA Journal explains that “auditing has historically incorporated many computer-dependent tools and processes, which were often interlinked by many manual steps and keystrokes. A new set of overlay software has emerged, however, that combines these disparate actions into a single smooth automated process.” RPA is that valuable software that enables more simplified, streamlined accounting and audit functions—from reconciliations and analytical procedures to testing.
RPA Improves Workflow and Enhances Quality
Many audit and accounting firms have realized the benefits of automating some of the low-value, recurring tasks that are time-consuming and have accordingly exploited RPA to revamp their audit processes. Gartner points out, “RPA automates standard steps in audit engagements like gathering all data, including prior audit findings, during the risk assessment phase.” As such, RPA is best suited for audit transactions or activities that are rule-based and standardized. Software bots can copy and paste information; import, export, and then integrate data from multiple domains; and/or transfer files, with greater speed and accuracy than a human ever could. The return-on-investment (ROI) for adopting RPA technology is palpable: audit workflow is improved, and output quality is enhanced. In addition, auditors relinquished from mundane tasks have more time to focus on higher-value work that requires human judgment and analysis.
Reconciliation and Cross-referencing
The audit of revenue is just one example where RPA is beneficial, but it also proves useful in the audits of other financial statement accounts. Tasks that would normally be conducted by an employee or audit clerk, like reconciling or cross-referencing preliminary data (e.g., invoices and sales listings) between several systems or applications, can be done by bots. As such, audit services, tax firms, and accounting corporations are utilizing RPA software to upgrade key actions within their audit and accounting processes. Accounting Today reveals, “Deloitte is making use of RPA to help its auditors and clients with their financial statements.” Since bots can collect massive amounts of data, cross-index it with other sources, and then dispense results securely in pre-defined formats, each audit step can progress quicker and smoother than before. In their book Robotic Process Automation and Risk Automation: The Definitive Guide, Mary C. Lacity and Leslie P. Willcocks describe how Royal DSM, a Dutch multinational company “ was able to reform processes thanks to RPA. “Intercompany reconciliations could be done all the time with robotics rather than just during the month-end close when the humans used to do them.” The authors noted that in some instances, whole steps can be eliminated thanks to the comprehensive capabilities of RPA.
Internal Control Testing
Not only can RPA bots extract data from client systems, but they can also be configured to run tests on all the information with a level of precision not possible with human data entry. Additionally, since bots can run 24/7 without interruption, it saves employees countless hours. PwC says, “Through automated testing, internal audit can test full populations of data rather than sampling and management can have greater confidence that controls are designed and operating effectively.” Bots can also be developed to generate an alert when errors or anomalies are detected.
Accenture’s Internal Audit team has also adopted RPA technology as part of its risk assessment and efforts to re-engineer some of its processes. The company published its case study affirming that “Internal Audit developed a proof of concept to automate the testing of Sarbanes-Oxley information technology general controls (ITGCs). The bots reduced testing time by more than 80 percent.” Besides the advantage of the time saved, the company reported the RPA software boosted accuracy in test results. Accenture also revealed its plan to further extend RPA tools for testing of additional controls and operational activities for Internal Audit.
Analytical Procedures
Since internal audits don’t just involve the pulling of data and entering it into spreadsheets or databases, but also the analysis of that data, RPA bots can be programmed to assist in this integral phase. Internal Auditor asserts, “Data analysis could be performed with trends noted and ready for management review. After an audit is completed, a bot could send the audit report to stakeholders, consolidate management responses, and follow up as due dates approach.” Bots can log into systems, apply query searches, extract work papers or reports from previous financial periods, import info into legacy applications to compare it with current records, and even produce alerts when discrepancies are identified. When bots carry out the amassing, comparing, consolidating, and formatting of data, auditors can concentrate on evaluating the results and making judgments that require human insight.
Everyday Tasks
Within all the stages of audits and accounting functions, RPA can assume everyday tasks: sending emails to team members, dispatching notices when due dates are missed, populating templates, tracking and monitoring progress, validating data is complete in document fields, and transferring and saving files to pre-determined directories or databases. To keep up with the technology- and data-driven times, accounting and audit professionals have leveraged RPA tools to fine-tune processes and workflows. Though RPA can overhaul audit and accounting functions and outputs in substantial ways, experts do advise starting small at first with automating low-risk activities. As audit and accounting teams continue on a path of digital transformation, accruing lessons learned, more opportunities for RPA will become evident to resolve issues and boost productivity. Team members will learn to evolve with the technology that improves operations and, ultimately, makes their jobs more meaningful. Vendors that provide Information Management services in conjunction with reliable, validated products, can make the RPA implementation organized and effective. For more information on how Tagence can accelerate and enhance your audit and accounting processes with Information Management and RPA solutions, visit tagence.com.