Introducing continuous auditing
Continuous auditing is the holy grail of the global financial system. Imagine a world where all companies are constantly in compliance, where any issues such as fraud are raised immediately, and where advanced algorithms ensure that financial figures – and by extension, companies themselves – can be trusted, always.
What’s more, investors and other stakeholders would not have to wait until after the financial period (sometimes months afterwards) to know if the figures are legitimate!
There have been numerous barriers to achieving continuous auditing. From legacy solutions to a broken system. Some of these key barriers are starting to fall, driven of course by technology.
We’ll look at this future, including products that are available right now that make this long hoped-for reality possible today.
The future: continuous audit
In the past, a hybrid manual/software solution has been used by most companies to keep their records. This could include physical binders filled with contracts, some invoices that are uploaded into the ERP, and some transactions that are completely digital. To make things more complicated, many ERP systems are heavy, slow-moving software solutions that are merely improvements of software from the 1990’s.
Today, agile, purpose-built software solutions can be plugged into ERP systems, and offer continuous audit capabilities.
Advanced AI-enhanced algorithms have the capability to ingest massive amounts of data, perform continuous analysis on this data, check for compliance, recommend remediation, and even generate journal entries and disclosure text.
Instead of waiting until year-end in order to collaborate with the auditor, a controller can check in with the auditor, in real-time, once a report or contract is finalized. This can also happen automatically – where auditors get a status report that all is fine, and only get alerted when something rare or problematic occurs.
Trullion is a world leader in advanced AI-enhanced automated accounting software. By developing its product, it currently offers two ways that companies and audit firms can experience the benefits of continuous audit.
1. Audit firms can manage their clients’ leases in Trullion
Audit firms that have Trullion enabled can manage all of their clients’ leases, for example, in one easy to use platform. Here, they can access source documents, check calculations, and know that leases are compliant with the latest financial accounting standards. The same goes for consulting companies who are assisting with compliance and value-adding activities, thanks to the rich insights that can be generated from the platform.
2. Organizations can give their external auditors access to Trullion
Companies themselves can implement Trullion – which has a range of incredible benefits for controllers, CFOs, and the company as a whole – and then give their external auditors varying degrees of access to the system.
Auditors can review reports, calculations, documentation, and more – all in real-time. This takes massive pressure off the controller and the auditor when the “audit” rolls around, as much of the work has already been done!
Continuous audit benefits
There are tremendous benefits to continuous auditing. These include:
- Shorter audit cycle
- Improved transparency
- Reduced close time
- Increased, timely collaboration between the auditor and controller in order to fix problems, avoid restatements, and prevent costly errors and fraud
Moreover, the audit process is built in, inside the platform. You can track the audit, including comments, with a 360º audit log trail.
Continuous audit is here already
A recent real-world example illustrated this. Morgan Hoffmann, Group Financial Accountant at Bradken, recently trialed giving their auditor, EY, access to their reports on Trullion.
“It has made our life so much easier – if EY wants to look at a contract, they can go in and help themselves rather than us having to pluck out contracts and showing them how the schedules are built, the accounting entries and things like that. They can know how to look themselves. Then if they’ve got any questions, just come straight back to us.”
This illustrates the unbelievable power of continuous auditing to change the way companies perform accounting duties over the course of the year, the way the audit works, and the relationship between companies and their external auditors.
One source of truth
At Trullion, we’re building one source of truth. A truth that’s always accessible to all stakeholders – including, crucially, external auditors – in real-time.
Continuous audit is changing the way companies and auditors work. It’s not a pipe dream, nor does it belong to some utopian future. It’s here, right now. Contact the Trullion team to find out more.