Digital innovation shaping the future of audit

Change has already brought us a long way: we established the first cloud-based auditing platform, KPMG Clara, which embeds digital technologies into the audit and leverages the power of emerging technologies such as AI and machine learning.

This helps our auditors see meaningful patterns across a business at a deeper level while at the same time providing a more intuitive and collaborative experience.

Technological innovation is key to our audit. One of the features of the digital age is that no single organization can cover everything on their own – we live in an ecosystem of connected enterprises. Striving to stay ahead can involve drawing on strengths of those collaborators.

That’s why we have alliances with some of the world’s leading technology companies. They allow us to stay at the forefront of digital disruption and also support clients as they transform their finance functions and other aspects of their businesses.

Through these alliances, we are looking to increasingly embed artificial intelligence (AI) and machine learning (ML) as well as predictive analytics capabilities in the audit.

For example, these emerging technologies can enable us to apply learnings from individual engagements to other audits (through benchmarking, pattern recognition, anomaly detection and more). They enable the automation of routine work to free people up for more judgmental work. Their computing power drives smarter and more sophisticated data extraction and analysis, including new digital assets that are set to become much more common such as blockchain and cryptocurrencies.

Then there’s the environmental, social and governance (ESG) agenda that is the watermark that runs through every aspect of KPMG’s work. ESG is really growing as an area of focus for businesses, as well as their customers, stakeholders and investors. Organizations need clear ESG principles and strategies, backed up by transparent reporting on their progress against targets. This is especially the case for decarbonization and the road to net zero. Information and reporting should be credible in order to build trust. There is no room for ‘greenwashing’.

ESG assurance is therefore an area we are heavily focusing on. We’re developing and enhancing our methodology around how to apply our smart technology to ESG areas – so we can provide robust confirmations of companies’ ESG statements, measurements and reporting. We see this as a key element of how we work in the public interest.

Because it’s so new as a mature discipline, ESG assurance is itself an area that demands innovation. We’ll be rolling out training for staff and recruiting new specialists as needed. We’re also drawing up plans for three regional ESG assurance delivery centers to serve clients around the world. We’re giving it the backing and investment that it deserves – in line with KPMG’s broader ESG strategy that makes ESG a focal point for the organization. I have recently written a blog on ESG assurance underpinning a sustainable future. 

The perception may be that auditing moves and changes slowly – nothing could be further from the truth! We’re working at pace to enhance the audit and keep it in step with leading edge technologies in the digital world.

Through our investments in technology; our relationships and collaborations; the resulting empowerment of our people; and a commitment to quality and consistent execution, we’re driving progress in how we conduct the audit. We’re excited about where this can take us.