Data is critical to the operations of any financial institution. Financial institutions handle huge volumes of documents and supporting information in their everyday business process such as loan applications, account applications and other financial documents. Scanning and indexing these critical data sets with the help of a data entry service helps to streamline the flow of data. Conversion of data into digital format also helps at the time of financial audits.
Financial audits are essential to help businesses function effectively, improve performance and operational processes. Powered by technology and innovation, the audit has evolved into a strategic opportunity that helps inform future business decisions.
Financial audits are not just a compliance exercise, these also present an opportunity to gain knowledge. A survey of 300 executives and 100 audits committee members by Deloitte’s US audit practice revealed that:
- Approximately 79 percent of executives and 91 percent of audit committee members agree that financial statement audits identify opportunities to improve business performance.
- Almost half (46 percent) of executives and even more audit committee members (62%) say it’s at least somewhat likely that they would have missed important insights if the audit had not occurred.
- Companies that regularly capitalize on information received from the audit are more likely to have achieved growth over the past three to five years.
Financial audits help companies to learn new information about their industry and market, discover shortcomings in processes and policies and identify inefficiencies and risks. Increased use of data analytics is helping auditors to manage a much larger population of relevant data, thereby improving risk analysis, with the ultimate goal of increasing investor confidence.
Despite the awareness of the value of what audits deliver, many companies still miss out on the opportunities an audit provides to improve their business. According to Deloitte’s survey, one in three companies rarely or never leverage the information received from their financial statement audits. Almost half of the executives i.e. 45% and 48% of audit committee members said their companies don’t always use information from their audits and do not have processes in place to make use of the insights that can be taken from the audit.
Auditors and their clients have room for improvement by unlocking the full potential of the audit. 79 percent of the executives and 94 percent of audit committee members assert that making financial statement audit findings more transparent within their organization would improve their company performance.
The following techniques can be used by auditors, management and audit committees to ensure that the client derives maximum value from the audit.
- Communication: The communication between management, audit committees and auditors will help ensure that the company is aware of taking advantage of the insights that auditors discover. They can be sure that their insights have been understood clearly.
- Train auditors on judgement and communication: The team should continue to work on improving skills so that they can deliver well and have the ability to communicate effectively, and also take analytics and innovations and share it with the audit committees.
Although many business leaders recognize the expansive value of today’s financial statement audits, many still do not realize its full impact.
Digital transformation of all data with the help of data conversion services makes financial auditing easier. Financial audits can make the organization better, independent, innovative and help it function with greater confidence.