Differentiate with quality
Explore audit innovation with Deloitte AI Robot #4
In the prior issue, we set off from the starting point of Deloitte's Audit Innovation Roadmap with Deloitte colleagues sharing their own experience in audit innovation culture and training. Today, Deloitte AI Robot will take you to the next stop: "Differentiate", show you around the Deloitte Audit Innovation Tools Showroom, and open your eyes to the technologies and benefits of Deloitte's various innovative and digital audit tools, as well as clients' feedback and insights on our audit innovation and digital tools in actual application scenarios from three dimensions namely quality, value and efficiency.
Talent and culture drive innovation; quality builds confidence
As a global leading professional services provider, Deloitte is committed to quality in the innovation process in order to gain trust of our clients, people and markets. In this issue, we have invited Deloitte China Audit & Assurance Innovation Leader Collin Jin as our expert guest to share how Deloitte enhances the quality of a full audit process through innovative technologies. In particular, we will take a close look at how our service teams across China applies various digital tools to perform our audit missions without interruption amid the coronavirus outbreak over the past months to help clients overcome the most difficult challenges.
“The audit industry has a long history which plays a key role in maintaining the steady growth of the capital market. Over the years, Deloitte has persisted in its commitment and continuous pursuit of quality. We are not content with following the rules. Instead, we take the initiative to do what we think is right and are proud of our persistent pursuance of quality and the high-quality audit services we deliver.
In the face of an unexpected epidemic outbreak, Deloitte still deems protecting the public interest as its mission. We remain committed to delivering quality audit, and seek to restore confidence in capital market with our professional excellence. In addition to leveraging the dozens of audit innovation tools developed by Deloitte, we have also accelerated the development of more customized digital tools and solutions based on the actual challenges during the outbreak. They have not only enabled remote audit effectively, but also guided Deloitte's professional service teams in controlling audit quality strictly in conformity to the globally consistent audit standards and procedures.
With the disruptive changes caused by emerging technologies in different industries and sectors, most businesses are actively embracing digital transformation. The increasing level of informatization of enterprises has given rise to various technology systems, digital platforms and massive business data. In the meantime, do audit practitioners have effective strategies in acquiring, processing and analyzing enterprise clients' financial and business data from multiple sources, and effectively judging and responding to their complex business and financial risks?
Deloitte Audit Innovation Tools Showroom
A full audit process in pursuit of excellence and quality
1 Planning and risk assessment
- Accurate identification and assessment of audit risk is the foundation of high-quality audit
- Leverage effective data analysis and AI applications
- Identify high-risk areas in operation and finance, and reveal potential fraud risk
An integrated data analytics platform developed by Deloitte. It enables visualized analysis of financial statements and accounting journal entries with a focus on high-risk journals, and reveals irregular trails, trends and points, making the risk assessment process more reliable.
Anti-Fraud Risk Monitoring Platform
An intelligent application integrating big data analytics and machine learning. It produces risk scores with reference to Deloitte financial index database and regulatory index database defined risk indices, and perceives the market sentiment by gathering and processing public opinions, enabling a comprehensive assessment of the risk level of the enterprise and determination of whether potential fraud risks exist.
2 Control Testing
- Leverage relevant technologies such as process mining
- Fully control the operation of business processes, systems and internal control procedures
Digital Process Mining and Design
Automatically tracks business processes, and visualizes the enterprise's end-to-end workflow through dynamic diagrams and charts. The tool helps enterprises have a more direct understanding of the operation status of the processes, identify abnormal business processes, and perform in-depth analysis of the potential risks in their internal control processes.
Automated Control Testing Tool
Supports the assessment, design, implementation and testing of system controls. Based on health checks and assessment of existing system control environments, ACTT identifies control deficiencies and the level of severity quickly and provides multi-dimensional analytic reports for users to grasp the full picture of the situation of system controls of the enterprise, assess the overall internal control quality and deploy the corresponding audit strategy.
3 Substantial Procedures
- Leveraging big data analytics and data modelling, realize effective identification and predictive judgement of unusual transaction data and financial data to accurately locate high-risk areas
- Use automated tools to reconcile the bank statement and journal entries and uncover related transactions
Regression Analytics Platform
A data analytics assistive tool launched globally by Deloitte. It assists audit practitioners in performing data modeling by using regression analysis to model the relationship between an amount being tested and data expected to be predictive of the amount. It combines proven statistical theory with our audit methodology to identify outliers and potential misstatements.
Large Bank Transaction Testing
Based on the actual business and driven by data. Through intelligent and visualized analysis of bank transactions, audit practitioners may comprehensively visualize all the bank account transactions and identify suspicious transaction parties through indices like transaction frequency and transaction amount. The tool also automatically reconciles bank statements and journals, significantly enhancing the quality of audit of bank transaction reconciliation and allowing more in-depth analysis by audit practitioners.
Related Party Transaction Online Analytics
Leverages data visualization, robotic process automation and third-party data platform. The tool consolidates and displays information such as the enterprise map, shareholding structure and relationship map, and dynamically displays the related party transactions of the enterprise to assist auditors in mining the client's related parties and related party transactions. Through effective consolidation of all data resources and technologies, it enhances risk mining capabilities and ensure audit quality.
4 Conclusion & Reporting
- Cross-check financial statements and notes
- Ensure quality of financial statements and audit reports
Leverages automation and incorporates deep understanding of audit standards. Developed by Deloitte, this tool enables highly automated and intelligent report review process for the engagement team. In addition to significantly enhancing the report review efficiency, Deloitte ReportWizard conducts health check in reports comprehensively and quickly and improves report quality to enhance audit delivery quality. The health check function mainly covers casting of primary statements, tie-out in primary statements, cross reference check against primary statements and notes, as well as casting of notes.
Finance department head from a large Chinese energy company: In a predominantly digital era, businesses are seeing constant changes in both internal and external environments, and new business models, work processes and technological applications are placing even higher requirements for their internal audit. Through audit innovation, businesses are well positioned to effectively respond to the rapid transformation and development of the world, systematically evaluate changes in the work scope, functions and roles of audit in the new era, and develop new concepts, systems and mechanisms, as well as methodologies and approaches for audit. It not only provides more dimensions and perspectives for them to conduct risk control and management, but also helps generate more instructive audit conclusion based on scientific analysis of various information, thus enabling stakeholders of the audit report to have a full picture of the business operation.
As one of the big four international accounting firms, Deloitte leads the world in audit, advisory and other businesses. As we understand, Deloitte's professional team integrates innovative technologies including advanced analytics, RPA, AI and data visualization into various application scenarios of audit projects, and provides systematic end-to-end solutions from planning to deployment tailored for businesses' digital transformation of internal audit.
Disruptive technologies and digital transformation are driving the development of audit towards new levels. We need to be more proactive in embracing innovation, and deliver customized service solutions that are more intelligent and customized for the clients. In face of the challenges and impact arising from the epidemic and future uncertainties, we remain committed to delivering high-quality service for our clients and fulfilling our duties and mission as professional auditors.
Thank you Collin! In the next issue, we will continue with our "Differentiate" session and take you on a second trip to Deloitte Audit Innovation Tools Showroom around value creation.