26 Following


We are officially in the era of digital transformation where technology has greatly impacted audit processes. This has ushered changes that were hard to imagine as possible about a decade back. While the accounting profession has by and large embraced technology in various processes, it was restricted to the documentation, calculation, stor age and retrieval process. However, this is all set to change as cutting-edge technology dons a greater role in auditing. The clamour for different reporting and financial statements has been growing, and technology has all the right answersv. Taking a leaf out of fintech companies for development of intelligent software Bookkeeping outsourcing company in uk. Processes that will be touched by technology will include those areas where it may be necessary for a machine to understand and use that knowledge to identify complex information. Fintech companies have been able to deploy automated solutions by leveraging the power of AI and machine learning. Auditing will similarly find a greater role for technology, beyond the present functions. For instance, technology has developed to a level where it is possible for AI powered systems to look at all the data of a company that is being audited and identify anything that is amiss. This will help auditors to turn their focus to flagged areas that need more of their attention. Evolving reporting requirements Bookkeeping outsourcing company Present audit reporting helps investors and shareholders understand the financial health of businesses. However, in the context of a data driven world with more and more information available, there is an increasing chorus for auditors to share additional information. Stakeholders are of the opinion that auditors possess more information, than what is actually reflected in the reports. And the demand is for more contextual information from auditors about how a specific conclusion was made or arrive at. Readers want to know how the auditors arrived at a conclusion. This open the floodgates of confusion. Auditors crunch numbers and make conclusions, expecting a reader to do the same is an invitation to chaos. However, technology has the ability to present relevant information in the right form for dissemination, that is in alignment with the overall findings/conclusion. Impact of revisions and penalties corporate secretarial services in ukThe Financial Reporting Council released revisions to International Standards on Auditing (UK)[1], which had more to do with the Code of Ethics. This has great significance for auditors and by extension the companies that are being audited. The changed standards, despite being limited in scope can have implications for stakeholders. This needs to be read in the context of the fines levied by the FRC, on some of the top global auditing firms for misconduct. Even as the dust began to settle over the fines and the circumstances surrounding it, most of the iconic and respected auditing firms commenced an overhaul of their systems and processes, bringing in more technology driven processes to strengthen existing processes. This will be the order of the future, as auditors look towards technology for greater compliance. Moving from sample testing to testing of all transactions In the future, auditors will harness technology to carry out checks of all transactions, and not just rely on a sampling or random check of transactions. While the certainly humungous volumes of transactions may have come in the way of checking out all the transactions in the past or the present, this is all set to change. With the use of the right technology, not only will all transactions be checked, they will be completed at high speed, which means that the process of checking will not add to the time element. And this aspect of checking all the transactions will help auditors to gain more insights about the financial health and other inputs about the organization and the domain it operates. This will be invaluable to investors and shareholders who will now be able to understand reports on the basis of checking all transactions and not just a sample. Sampling has a probability of error, which will be corrected in the future. The need for speed The new techno-social order has turned time on its head. Processes that once took a specific period of time has now been shortened drastically. As a consequence, all other allied processes and procedures are also expected to commence/conclude at proportionate speed. Effectively, this has led to a cascading effect. Audit, resultantly, requires to be concluded faster than ever before. Manual processes do not stand a chance of delivering results at speed or with the accuracy and precision required. While it is impossible for technology, as it stands now, to replace the power of human intuition in tasks as complicated as auditing, many of the tasks that are repetitive or rote in nature need to be entrusted to technology and automated processes to be able to meet the deadlines. Leveraging the power of blockchain for cost effective audit processes Blockchain is the buzzword that will continue to hold sway over businesses well into the near future. And by virtue of being a distributed ledger, blockchain is the natural bedfellow for auditing processes. Auditors need not seek information or wait for clients or third parties to furnish statements, or any documents for verification and cross-verification. Auditors can simply carry out the verifications from blockchain ledgers. With the power of offering verifiable and immutable transactional information, these ledgers will save a lot of time and money, in addition to the assurance of offering information that is accurate and free from errors. This is basically, because the transactions themselves would have been carried out only after fulfilling the criteria or conditions of all –parties involved in the transaction. Analytics only as good as the data that is fed Analytics can be only as good as the data that is fed, which means that standards also need to improve so as to offer data that is of the right standard. While systems will be powered to detect anomalies over entire transaction history, the advantage of perception that is available to the human mind and the logic of perspective will be unavailable to technology driven systems. This will make it mandatory for records to conform to certain standards. The quality of the data and the processes or technology that is available to bring in the data from many sources needs to be advanced so as to prevent gaps in data capture and its use. The need for more regulations and standards Past processes had stakeholders trying to catch up with the regulations and standards. For instance, auditors and organisations had to fulfill or meet the standards and regulations as laid down and the need of the hour used to be a scramble to meet the standards. However, with changes in the way business is conducted, there are multiple issues which cannot be met or fulfilled by existing standards. This turns the whole equation of regulations and standards on its head. Regulations and standards are now expected to keep pace with the developments and evolving changes in the world of business. Till the regulations and changes are in place, auditors and businesses will have to work within the contours of existing regulations which may not be very easy considering the inherent differences among domains. Conclusion: Auditing is a proven facilitator for growth, in addition to meeting the requirements of accounting and financial reporting. While nations have their own set of policies about the size of businesses that need to be audited or not audited, it is a proven fact that auditing is one of the pillars of growth of a business. Technological innovations will assist the acumen of humans to bring about greater accuracy, improved reporting and faster conclusion. Auditing will not be limited to random checks but will encompass the whole history of transactions for specific periods. Contrary to popular belief, technology will not take the place of humans, but will help humans in their deliverables.

Opportunity for Accountancy firms and Bookkeeping services to differentiate and steer ahead

‘In the midst of chaos, there is opportunity’ so said Sun Tzu. While the present situation in the world of accounting and bookkeeping services can by no stretch of the mind be likened to chaos, it is easily acknowledged as a state of flux. It is this constant state of change that presents outsourced accounting firms the opportunity as well as the need for differentiating to steer ahead into the future. The options present before accountants are manifold, and the challenge lies in embracing change and implementing it. Here is a roadmap for accountancy firms that can take the service to the next level.

Taking service beyond calculations to offer critical business insights 

The time has come to shake off ideas about accounting. Accounting needs to go beyond mere number crunching and regulatory compliance to offer value addition to clients in the form of business insights. outsourced bookkeeping services While this has been used effectively by large conglomerates, the smaller businesses tend to look at accounting as merely a requirement for tr transaction-basedctivities or for routine accounting. Offering insights to businesses on related areas or aspects, may have been a tough ask a decade ago, before the era of established automation and cloud computing. As processes are increasingly automated, accountants now have the resources to re-focus, and deliver value additions.

Of what real use is technology, if the saved time and resources are not used to deliver greater value to the processes and objectives?.

Embrace technology for solutions that are cost effective and convenient 

Technology has advanced to levels where it is possible to considerably speed up the processes and deliver solutions in a more cost-effective manner. The cloud has opened up the whole accounting services platform to multiple benefits. Advantages of secure storage, easy access, scalability and cost-effective services are a reason for the exodus of sorts to the cloud. The cloud has now become the standard, and not an option anymore. Accounting firms have no choice but to use the cloud for bringing in the twin advantages of convenience and cost-effective solutions. Similarly, the ‘age of the mobile’ and the ‘planet of the apps’ makes it imperative for accounting service providers to offer solutions that can be accessed through mobiles. Accountancy firms can use cloud software’s to manage services like payroll, bookkeeping, and many more.

Early adopters of technology hold the advantage of learning the ropes better and being fully prepared to implement solutions.

Supporting the transition to the post-Brexit era 

Businesses will need accountants more than ever before as they negotiate new agreements in the post-Brexit era. Meeting the new compliance and regulatory requirements will require the expert knowledge of qualified and certified accountants. This will present the ideal opportunity for accountants to compensate for the possible dip in revenues due to the EU exit. However, the shock of moving into a post EU phase will be softened by the surge in requirements for accountants to help businesses set up shop in the post EU phase. Accounting services need to be fully aware of all the regulations in force and the overarching effects of certain rules which need to be read and interpreted in conjunction with other applicable laws. This expertise will be in great demand and accountants need to be ready to offer complete consultancy and advisory services to businesses.

The inevitable is bound to happen, and it pays to be not just ready for it, but to make the most of it.

Ensuring compliance with data protection laws 

This will not fall into the category of differentiation but will most certainly be mandatory. Privacy laws and data protection regimes are being implemented globally and accountants need to implement the same. As custodians of client data, that is far more important than a business lead, it is the bounden duty of accountants to ensure that the financial information is safe. This means that the use of technology to improve deliverable needs to be chosen with great care. The cloud will be the defacto platform for most services, and accountants need to take care to ensure data protection practices are in place at the cloud hosting service. The new regime of data protection fixes varying levels of responsibilities on all stakeholders mandating the need for strict compliance.

Data protection as a collective and individual responsibility renders it as one among the more comprehensive yet all important regulation that needs to implemented for survival in the new order of digital transformation.

Stay abreast of rulings in tribunals about contract law determinations 

IR35 determinations in the UK have widespread ramifications on independent contractors and the situation is bound to only increase post-Brexit. This makes it necessary for accountants to be aware of the latest rulings in tribunals on appeals filed by contractors who have been determined to be within the IR35. By following rulings on contested determinations, accountants will have a better grasp of the law and its interpretation by the tribunals. This perspective will lend great knowledge in helping contractor clients to negotiate terms with end user clients. A comparison of the interpretation by the tribunals and the sometimes-flawed interpretation by the HMRC will help accountants interpret unique contractual clauses in a more informed manner.

Expertise in IR35 law and its interpretation is more by way of accretion – acquiring knowledge through interpretation of conflicting imperatives in contracts.

Taking a granular approach to auditing 

Auditing has remained an exercise that is most comprehensive in nature. However, despite its comprehensive processes, there are many areas that have been left out of auditing due to the sheer volumes involved. Consequently, random transactions have been verified in the past, during the audit trail. With technology becoming the force multiplier, audit processes should move into the next level covering entire transaction history. And as all the roundtables suggest, investors and shareholders demand more insights the ‘binary’ audit results prepared by auditors. In other words, recipients need to know more about the ‘how’ and ‘why’ of a report. They need to offer insights about how conclusions were made, with background information. All of this means that auditing needs to be more granular than ever before, leveraging all technological innovations to fulfill expectations.

Technology as the enabler of solutions needs to be leveraged to meet expectations of end users of solutions.

Having systems in place for MTD (making Tax Digital) deadline of April 2019 

This is another compliance aspect that needs to be met by April 2019. Accountants who have been offering VAT registration assistance to clients need to offer this service additionally to help clients transition to the MTD scheme. This will also be the stepping stone for the scheme which will cover all taxes in a phased manner over the years. To offer this advisory service/consultancy, accountants need to be on top of their game when it comes to using the right technology and processes to meet the requirements. The need for compatible software and updated records needs to be viewed in the larger context of other data entry requirements and use of the cloud. Utmost security is needed for payroll and data transfer services. Accountants need to offer services that not only meet this specific requirement, but in a manner that will not affect other processes, while at the same time preparing for transiting to the full MTD scheme in the future.

Digitalisation offers benefits; however, significant effort is required for making the transition seamlessly.


Accounting services in the future will be a lot different from the stereotypical notion of services. In addition to the number crunching processes and compliance with regulatory bodies, accounting services of the future need to offer greater contextual information to clients. In a data driven world, where businesses are no more transactional, but relational, the importance of data and insights needs no emphasis. Automated processes and cost-effective cloud solutions will be the differentiators of today, but the new order of business tomorrow. And to be ready for the new order of business, accountants need to fully make use of differentiators today.