Robots strengthen the digital workforce
Robot Process Automation: Audit with RPA and audit of RPA
Robots are among us. While they do not resemble how they appear in our favourite sci-fi movies, robots can strengthen our digital workforce and open up numerous new fields of application. The robots can help in the audit process, but they are also subject to audit themselves.
Robotic Process Automation (RPA) makes possible the automation of standardized, rules-based, repetitive processes and, RPA software can be programmed to perform transaction processing and data manipulation and communicate across IT systems, based on a predefined set of tasks and actions. Well-orchestrated robots can be a virtual addition to our audit teams.
RPA robots can perform predefined tasks within the current underlying IT structure, such as processing cash entries, preparing invoices or running master data set-up routines. With their own names and logins, robots can interact with systems and applications in the same way as humans.
RPA has clear benefits. Well-defined processes can be simplified and standardized even further through the definitions and rules that are set for the robot. By shifting tasks to the robot, operating costs are reduced and capacity and flexibility are increased, while the scope for human error diminishes. The tasks of humans in the audit switch to the supervision and review of the robots’ work, and this frees up time for more valuable and complex audit work.
Audit of RPA applications
For our clients, the implementation and use of RPA can be effective in fostering improvements and clarification in processes, through the underlying requirement for standardization. This can add to the effectiveness of risk management, especially when the introduction of robots follows an organization-wide programme with centralized oversight. As robots follow precisely-defined action protocols and procedures, they can also capture and retain required audit trails and automatically report on matters such as exceptions.
For auditors at Deloitte Switzerland, the use of robots by our clients brings the benefit of a reliable, standardised process flow as a basis for the audit. As a plus, relevant data is made available in a reliable and consistent format. This enables us to design a strongly process-oriented audit approach and to put even stronger emphasis on detailed understanding and analysis of the financial situation, as well as to review in more detail the underlying decisions made by management.
Nevertheless, even when our clients use RPA, our audit process begins with a thorough assessment of the risks of material misstatements in the financial statements and designing an appropriate audit response. We seek to understand the automated transactions that have significance for the financial statements and related control activities. Automated processes are also scrutinized to ensure that all items and transactions contributing to external financial reporting are correctly documented. The implementation of RPA by a client directly affects our audit approach and might lead to modifications in the nature, timing or extent of our audit procedures.
In this way we can provide assurance that includes RPA-based processes and controls that are relevant to our clients’ external reporting. As auditors, we apply a comprehensive, integrated audit methodology aimed at addressing risks and detecting possible misstatements with a sufficient level of probability. In this way, we support our clients in the standardization and improvement of processes and controls, through detailed reporting of our findings and recommended changes in their RPA applications. We also address directly risks arising from RPA applications, for example with regard to data security, access rights and underlying settings.
Audit with RPA
Using RPA to perform routine tasks in the preparation and execution of our audits is at the heart of transformations we are introducing into our audit procedures, such as extracting structured data from documents, performing calculations, filling in forms and preparing the basis for our audit documentation.
By automating audit processes, we can spend less time on routine tasks and focus our energy where it really matters. A couple of years ago, we moved to computer-based, paperless audits. This allowed us a further reach through our clients’ data, generating more detailed and valuable insights. As a similar next step, RPA brings strong advantages to our profession, for example when testing large samples RPA can support us in linking documents and inputting the respective data into our documentation.
Deloitte Switzerland is developing the use of robots in audit from single use cases to generally applicable solutions. In early 2018, we formed an Audit & Assurance Technology team to deliver technology-enabled audit solutions to clients and to automate and widen the scope of the firm’s assurance services. Thus we aim to deliver the best possible results for our clients – increasing efficiency, strengthening our focus and creating valuable insights on an ever-growing data base.