RPA in audit is a necessity. Gartner reported that the global revenue generated by Robotic Process Automation (RPA) software will reach 2,9 billion dollars in 2022. This raises the question of what the potential for RPA in audit could be. Considering the high number of repetitive tasks, shortage of financial auditors, and need for innovation, there are many opportunities for RPA and auditing.
Despite the enormous potential, many companies still struggle with how to get started. In this article, discover 7 insights on how to audit with RPA to make your work day that little bit smoother.
How to audit with RPA
1: Think the business case through
Before developing the audit RPA, make sure there's a strong business case. This is one of the most common pitfalls. To set up effective audit RPA, there's a minimum of data elements required for the process to be more efficient than a manual process.
Inefficient audit RPA example:
A robot fills in a client-specific questionnaire that is based on professional judgment and client knowledge. To fill in the questionnaire, input data from the auditor is required. The robot sends out a survey that needs to be filled in by an auditor. As you can imagine, this leads to frustration for the auditor and the process is less efficient than when an auditor fills in the questionnaire directly.
Efficient audit RPA example:
The robot fills in the client-specific questionnaire based on the information that was already included in the previous year's audit file or publicly available information. This saves the audit team time as no interaction with the audit team is needed, which brings us to the next lesson...
2: Minimize interaction with the audit team
Aside from the audit team, where can the audit RPA solution retrieve input that is needed for the process? Too much interaction between the RPA solution and the audit team could result in:
- A higher turnaround time – an advantage of RPA is that it runs 24/7. The best argument to limit the interaction with the audit team is it leads to a higher turnaround time. Due to working hours, leave, or simply a busy calendar, the reply is often later than necessary.
- A dissatisfied audit team – extensive interaction with the audit team will annoy them. Receiving emails from a robot is more commonly considered spammy, irrelevant, or low priority.
Interaction with the audit team should only take place when specific decisions are required that only they can make. And preferably limit the number of interactions to one certain moment, for example at the start of the process. Include all relevant decisions in this first and only moment of contact. Also, predefine what should happen if the audit team does not reply promptly.
Another option would be to let the entire process be executed by the audit team. For example by setting up a template to extract data from forms automatically. The template is set up centrally. However, the automated solution is run by the audit team themselves, therefore directly covering the needs of the auditor.
3: Involve stakeholders early
When developing the audit RPA concept, identify and include the relevant stakeholders as early as possible to set up the business case, structure, and concept.
Stakeholders that are required to be included from an early stage are audit team members from different levels, a methodology partner, an IT specialist, an implementation manager, a project manager, and a learning manager.
Another key stakeholder is the auditor. Including audit knowledge in the process of setting up the concept of the RPA solution is essential for a successful product. It leads to a solution that better fits the needs of the audit team. This will ultimately lead to higher usage and adoption.
Including industry knowledge is not only preferred for a successful setup but is also needed from a regulatory perspective. For RPA in audit, the solution needs to meet auditing standards and other regulatory requirements.
4: Responsibilities must be clear
Even though involving all stakeholders will lead to a better RPA solution, there's a fear that no one will have a complete overview of the product that's being developed. It's recommended to assign a product owner that is responsible for the final product. The product owner will work closely together with the project manager that is overseeing the progress of the product.
One of the risks of setting up an auditing RPA solution it's often thought that 'the robot will fix it’. However, auditors should always use their expertise to check whether the work has been performed correctly. When brainstorming the concept of the RPA solution, don't forget the review process. Make sure the reviewers are well accommodated in performing their review, this too will lead to a higher appreciation for the RPA solution and ultimately higher usage and adoption.
5: Map out all exceptions
Once the basic constructs of the RPA solution are set up, map out the exceptions that might occur in the process.
Every RPA solution has a ‘happy flow’ (the perfect flow that you wish every audit file or audit procedure would follow). However, the reality is normally more rigid. Involve auditors from multiple levels, disciplines, and industries to find out how files are built up or how certain procedures are being performed.
Let’s take the documentation of auditing the account operating expenses as an example. There are at least 50 correct ways you can document that procedure. Brainstorm with the group on the most common exceptions and how the RPA solution should address those.
Remember that great minds do not necessarily think alike. By involving more opinions, the audit RPA solution will be better deployable and therefore more useful.
6: Test, test, test
Even though the concept of the RPA solution is flawless, it’s important to test, test, and test it. This will make the RPA solution more robust. It’s important to see how the RPA solution will respond in different scenarios. You'll most likely come across multiple occasions where the RPA solution is not working as you were expecting. It's better to address this at the testing stage, update the design, and test again.
7: Celebrate and communicate successes
The first time the robot runs successfully. Celebrate and communicate. The first time the robot handles a specific exception. Celebrate and communicate. Milestone reached. Celebrate and communicate. A lack of communication is one of the main reasons auditors do not embrace change.
Transparency is key. Especially with tools like an RPA solution which can sometimes feel like a ‘black box’. This also means being transparent about situations in which the robot did not work perfectly. Being honest about what an RPA solution can do in an audit, but also about what it cannot do, will add trust to the RPA solution. Also, it will make the role division between the robot and the auditor clearer: always review the output of the work performed by your digital colleagues.
What's the potential of RPA in auditing?
Altogether, there is huge potential for RPA in audit as long as it’s set up and implemented in the right way. I see the implementation of RPA in audit as a necessary step to transform the audit and make the profession more sustainable for the future.