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Global network as driver of innovation in Audit: Innovation creates added value for clients and audit teams
Keyfacts:
- Innovation often start small, but the benefits can be much more far-reaching
- All new technologies in auditing have one thing in common: The goal of ensuring the highest level of quality, increasing efficiency, and detecting potential errors or irregularities even earlier. At the same time, innovation optimizes the processes and user experience for clients.
- A global network like the KPMG-Organization continues to pursue innovative approaches from different directions. Thanks to a regular exchange, options emerge for working on issues together and leveraging synergies.
Technology and innovation are important components of progress – at our clients as well as in auditing. It is obvious: Automation, analytical tools, artificial intelligence and many more components improve efficiency, quality, and productivity. Innovation often starts in a small circle, their use though, can be far more extensive. As auditors, we observe a high degree of innovation at our clients and have to find ways to operationalize the interaction with our modern audit tools, to create noticeable added value.
A global network, such as the KPMG member firms, supports the development and implementation of new bots and analytical tools in Audit services, and actively uses the international exchange as an effective driver of innovation. The diversity of our clients and markets around the globe helps us to learn from experiences and market developments in different industries and geographies, to develop ideas that meet the needs of our Audit practice In addition, consistency in application and implementation of new technologies is necessary for the benefit of our global client base.
Through the implementation of innovative technologies, we from KPMG Germany can oversee our auditing processes in real time and continuously keep our clients updated. By applying globally used analytical tools, we can identify challenges in individual components of one group and specifically address them in our audit approach. Our globally developed technology tools help us to ensure consistency of our audit work worldwide. For this, I work closely with KPMG’s Global Head of Innovation & Deployment, Sebastian Stöckle for example.
Clear vision: Most trusted and most trustworthy professional services firm
„The use cases of innovative technologies are diverse. They reach from specific software solutions that help to reduce manual steps when recording data, to the application of artificial intelligence (AI), to identify indications of fraud in accounting as early as possible.“ – quote by Sebastian Stöckle, Partner, Head of Innovation & Deployment, Global Audit at KPMG International
All technologies have something in common: The goal, to ensure the highest degree of quality, to increase efficiency and to detect potential mistakes or irregularities even earlier. At the same time, the client experience and the user experience are improved by innovation.
Promote innovation: From various directions
A global network like the KPMG-organization pursues innovative approaches from various directions. On one side, there is a clear focus on future trends and innovation on the global level. In doing so, experiences, client needs and ideas for innovation from the individual member firms contribute to deliver a clear vision of the use of technology in audit for now and in the future.
On the other side, innovations can also emerge bottom-up. Employees in our member firms improve their work experience by developing technical solutions or adapting their processes. During regular meetings with our member firms, this is introduced to other countries, which will then utilize the ideas in similar ways, benefiting their clients and employees.
For example, an innovative solution was developed by one member firm supporting the extraction and interrogation of data, not only for standard financial data and information, but also for numerous requirements, that come up in the context of sustainability reporting (ESG). This solution was then globalized and also applied in other KPMG member firms.
A regular exchange between our member firms allows us to create audit tools, that already consider particularities of diverse markets, in the development phase. In the past, for example, one member company developed a special tool for auditing large infrastructure and construction projects and brought in experts from other countries at an early stage to be able to map the special features of clients in all countries.
Thanks to our regular exchange between innovation hubs in different markets, opportunities for collaboration on projects are identified and we create synergies in the development phase.
Important requirement: Uniform system landscape
An important requirement for a smooth introduction of new tools and the fast deployment of innovations across borders, is a globally consistent work environment and methodology. At KPMG, this consistency is already achieved through our global Smart Audit Platform KPMG Clara. The system provides our teams with a worldwide high-quality, standard-compliant audit tool and methodology. This platform is the basis for innovation and helps us to consistently deploy them across the globe.
Regulation provides the framework for innovation in Audit
As a regulated profession audit firms have to ensure that innovations are deployed within the regulatory framework and should be designed to improve the effectiveness of audits. We have to proof to our regulators, that our innovative technology meets the expectations of the standards. This can sometimes be a challenge, when standards originate from a time when paper and pen was used. However, we are all working towards a common goal and that is audit quality. Globally operating organizations face slightly different standards and requirements in different countries. Therefore, innovations must always be developed in a way that provides sufficient flexibility to adjust to those requirements.
In the upcoming years, the fast implementation of innovative solutions will become even more important. Expectations of markets and regulators are high. Requirements for ESG reporting and assurance are introduced in many countries and broaden the responsibility of auditors. However, in this field at most of clients a digital data landscape rarely exists. It is obvious that we will see major developments in this space within a relatively short timeframe. Preparers will benefit from the global expertise and the benchmarking capabilities of their auditors when implementing these systems.
