"The only way to be future-proof is to understand the past."

Prof. Dr. Rob Fijneman on the impact of technology on auditing.

Interview with Prof. Rob Fijneman, professor of IT Auditing at the Tilburg University and TIAS School for Business and Society as well as Partner at KPMG Switzerland

Prof. Dr. Rob Fijneman

Mr. Fijneman, digitalization is also gaining ground in audit. You’re an expert on IT audits – where do you think digitalization will have the biggest impact?

Digital transformation isn’t just giving rise to new business models, it also has repercussions for financial statements. Digitalization presents auditors with the challenge of having to pursue further development in their own professional field.

We’re entering an era of continuous auditing while technology is becoming increasingly standardized. Yet regardless of the technical advances being made, the human factor remains indispensable. In fact, the changes in their line of business could lead to auditors playing an even important role in society.

How has the use and importance of technology in auditing changed over the years?

Technology was first used to support back-office processes in the realm of finance around 50 years ago. This required an understanding of the technical details, which then evolved into the discipline of IT auditing that is still used today. At this point I should mention that we distinguish between two different terms: audit of technology, also referred to as IT auditing, and audit with technology.

The importance of algorithms and artificial intelligence in IT auditing has grown. Today, audits with technology increasingly use AI as a tool. What’s crucial to recognize is that you’re only future-proof if you understand the past.

What will an auditor’s role look like in the future?

Predicting the full potential and repercussions of AI in auditing is difficult. Modern auditing comprises a great many technology-related aspects. When conducting real-time system audits, auditors already validate new controls during system design and data migration.

Audits now include reviews of cyber governance and any cyber incidents. The use of continuous monitoring tools is being driven by the advanced use of algorithms and approaches like these have since become reality. Data-driven auditing is slowly starting to take shape and has the potential to replace many of the current audit procedures.

What’s more, AI-based solutions help in identifying and assessing outliers.

AI will change auditing in and of itself. What should auditors brace for?

The use of AI really does harbor enormous potential. New technologies like AI could be used to control and monitor activities and to optimize processes. Going forward, defining, and validating the applicable rules will be a key task for auditors.

We rely on tech-savvy financial auditors to play that role, assisted by teams of IT audit specialists. There will be a growing need for integrated teams with members whose skills overlap to some extent.

The combination of qualities offered by financial auditors and technology specialists will define the new audit standard. Audit of IT and audit with IT will move closer together and form the basis for a new era of auditing and a new generation of financial auditors.

Which role do you see AI playing in efforts to combat the shortage of skilled workers?

AI plays a key role in combatting the shortage of skilled workers by helping businesses work more efficiently and optimize their operating procedures. AI makes it possible to automate repetitive, routine tasks while simultaneously enabling extensive data checks to be performed with fewer workers.

AI can also use data analytics and training programs to help businesses identify talents and optimize their employee development. That means AI can help reduce the shortage of skilled workers by allowing employees to be deployed more efficiently. Interaction between humans and technology (AI) will still be necessary, that much is clear.

Auditors and IT audit experts need to work together to review the basic rules governing the use of AI and humans will also have to be on hand to interpret the results. That will let auditors focus more strongly on both exceptions and outliers during their audits, thereby enabling them to achieve better results for society and businesses. A great outlook for our profession.

Dominik Weber

Head of External Communications

KPMG Switzerland

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