Auditing is yet another sector where cognitive technologies can provide substantial value. While most of the audit profession is exploring the implementation of cognitive technologies, human auditors continue to be hired and aren’t going anywhere soon.
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According to Deloitte, audits will soon be “augmented” by cognitive technologies, but it’s unlikely the profession will become fully automated and no longer need human intervention. In fact, it is their belief that automating audits will free up auditors to spend their time using their professional judgement to monitor automated outcomes, reviewing advanced analytics, and better understanding clients.
In “Creating a Cognitive Audit,” Deloitte outlines three important components to establishing a cognitive-enabled audit.
Global Approach to Audit Innovation
The first step towards audit innovation involves forming a team of global members tasked with constantly seeking out and evaluating new technologies for the organization. The team will want to pursue solutions to a variety of projects that will ultimately fuel cognitive-enabled audits anywhere in the world.
While the global team scouts new technologies, the global approach also involves the internal development of a myriad of cognitive tools and applications, including robotic process automation, workflow automation, data, and analytical and visualization tools.
There is also a constant evaluation of whether technologies are responsive to addressing the organizations’ requirements for consistency and quality, which requires organization and reflection.
Best of Breed Approach
Another important factor in creating a cognitive audit is adopting a “best-of-breed” approach to the development of technology components.
There are two approaches to implementing external technologies: using a single developer and adopting only their capabilities, or—the more favored of the two—using a best-of-breed approach and handpicking specific functionality from various developers.
The Deloitte team found that the best fit for their firm’s audit innovation initiatives was using best-of-breed and constantly surveying new technology start-ups around the world from which to adopt components.
This approach is agile enough to allow for easy swapping in and out of new technology features, which is critical considering the rapidly changing state of technology. Another benefit is that various start-ups are well-suited for different solutions, and using this approach means all are at your disposal.
A Five Step Development Process
Complex audit tasks may not be ready for a cognitive transformation, or may take more than one type of cognitive tool to complete the task. Deloitte suggests following a five-step process for transforming a task using cognitive technology.
- Simplify and standardize — Create a simplified procedure for performing the task and do not introduce any new technology to the process. This involves performing sub-tasks and routines in the same way around the world.
- Digitize and structure — Digitize a task using IT tools to collect data and monitor performance. This is the first step towards structuring a task.
- Automate — A digitized and structured task can then be automated; eliminating the need for manual labor. Deloitte points out that this step generally improves cycle time and consistency.
- Advanced analytics and analysis — Once automated, a process can be monitored with advanced analytics, tested with predictive or prescriptive analytics, and external data can be implemented to improve risk assessment and outlier detection.
- Cognitive — Implementing cognitive technologies to make the task more intelligent is the final step of the transformation. With cognitive tools, the task can become more intelligent and perform better over time.
Deloitte believes that separately, each of these steps can prove meaningful and more insightful, but together, these steps make an audit more valuable to all parties and truly transforms the audit process.