Auditing in the Digital Age: Tackling Data Management Challenges

Introduction 

Auditors need to securely manage complex data sets; this is a critical factor in maintaining professional credibility and client trust.   

Auditors also need to ensure data integrity and compliance in a rapidly evolving digital landscape. 

As an auditor, why should data management matter to you? 

There are two very good reasons why data management should matter: Data Protection and supporting your company to grow. 

Data Protection 

Does the way you currently handle data across your audit team give you confidence you’re not in breach of data protection rules? Are you and your teams compliant with Article 30: Records of Processing Activities, set out in both the EU and UK GDPR? If not, you could face legal and financial consequences (BBC article). 

Supporting your company’s ambitions to grow 

You may find that auditor teams are working across various client locations and data is handled inconsistently. This leads to challenges in aggregating and analysing data, directly impacting audit accuracy and reliability. As an audit or accounting firm grows, these challenges have an even greater impact; expansion brings more data, demanding a more streamlined process for efficient scaling. Without this, a firm's growth and ability to handle more clients or enter new markets can be severely limited.  

In short, the challenge extends beyond technical issues; it's a strategic concern affecting a firm’s credibility, client trust, and growth potential. As a member of the senior leadership of your firm it’s valuable to demonstrate your grip on data management. 

Where do you start?  

The first thing we’d advise is not to rush in.  

It’s important to ensure that you’re aware of the context that you’re working in. We see a lot of examples where individual teams have put ‘tactical’ solutions in place that don’t align to other units of the business. These fixes can help in the short-term but you could find yourself being asked to justify your approach. 

Questions to start your thinking  

There are many ways to design and implement an approach to data management for an audit function. Here are a few introductory questions we recommend considering to get the ball rolling: 

• How do you currently capture data before and during an audit? What effects (good and bad) does this approach have?  

• Which elements of your audit processes create or use the most data?  

• How long do you typically need to store audit data for, and who should have access?  

• Will there be a requirement to share all or part of the data you’re using with other areas of your firm?  

• In a typical client engagement, are there any key meetings / presentations and other deadlines that a better approach to data management could improve?  

• Have your team provided feedback about their experiences using your current methods of data management that could point to improvements?  

• Have your clients fed anything back or logged any specific questions about the way you handle their data? 

These are just examples from our experiences here at Sigma 3 Digital, and it’s certainly not an exhaustive list. However they do point to a range of topics that you will want to address, including data capture & storage, security & governance, access & retention, data sharing, business intelligence & analysis and not least, the ability to demonstrate data protection compliance.  

There is also a wider point about your firm’s corporate knowledge management that a strategic approach to data management will draw out: Do you take a structured approach to learning about your clients and your business for the junior members of your team? In today’s labour market, a company that demonstrates a great approach to development and progression will retain more of its staff and enjoy a better reputation. So how do you structure the information your teams need to learn and grow?   

In practical terms... 

All the above is a bit theoretical, so in practical, tangible terms, here are a few specific examples of what we provide for our clients, within a strategic, end-to-end engagement:   

• Bespoke software for your auditors to capture or check data whilst out with clients.  

• Analysis, including machine learning, of big datasets so you can spot risks for your clients.  

• Automated pipelines, meaning data is loaded and stored properly so you can focus on financial analysis.  

• Automatic and interactive dashboards so you can pick out key messages for your client or your board.  

• Automatic KPI reporting of your team’s progress.  

• Automated first drafts of summary reports making your audits more efficient so you can focus on great client service.   

• Instant security and compliance reporting so you can confidently demonstrate that you’re using data the right way.   

These are examples of what we deliver - you may have specific needs not covered in the above illustrations. There are some common benefits in these items including efficiency and time saved, consistency between different areas of your business and increased accuracy of your outputs, all of which contribute to delivering a fantastic experience to your clients in a way that can scale.   

And finally... 

We ensure that the financial experts in your teams are on board with the digital transformations we create, because we know that technology is only effective if people want to use it. We’ve got a decade of experience in supporting large and growing teams of auditors, financial investigators and restructuring professionals with the technology they need to operate at scale.   

Get in touch today to start the conversation.