I heard an excellent phrase today: always on audit. THAT is how audit's should be. Always on. That term comes from Engine B who is creating a Common Data Model (CDM) for audit. They say it will enable lower cost audits and easier audit rotation between audit firms. In this article, Engine B describes always on audit:
Within 10 years some of us will be performing a highly-automated, always-on, data-led audit. Instead of starting with the financial statements and testing samples, auditors will be using machine-vision to confirm 100% of basic transactions to e-invoices.
Engine B is the fourth organization trying to make audits more effecient through standardization. So, Engine B has their Common Data Model (CDM). Here is v1.1 of that CDM. ISO has their Audit Data Services. The AICPA has their Dynamic Audit Solution Iniative. OECD has their guidance for standard audit files.
All this dovetails nicely with my notion of automation of the record to report process. Perhaps all this will help fix auditing.
It also fits into what Mindbridge.ai is doing with their AI Auditor.
XBRL-based financial reports are part of this equation. Gotta make sure they are properly functioning logical systems.
This article helps you understand the next generation of professional services.