Companies are deploying advanced technologies, like the cloud and artificial intelligence (AI), in a variety of ways. With AI, for example, organizations are finding ways to be more productive, increase speed to market and better engage with customers. These technologies are also increasingly being deployed in the finance function, a trend that is ultimately transforming finance and the audit for the better.
To learn just how finance executives are leveraging advanced technologies today, Forbes Insights, in partnership with KPMG, surveyed 250 senior finance executives under 40 in every major industry. The survey found that 56% of these executives believe their organization is “advanced” when it comes to using advanced technologies in their financial reporting function, and 39% say their organization’s use is “limited but increasing.”
If advanced technologies aren’t already essential to conducting business, they will be shortly. At least half of the finance executives surveyed say workflow automation, visualization technology, data and analytics, and AI are essential now or will be “must-haves” within two years.
Given the state of play and how quickly technology is advancing, it’s no surprise that auditors are now expected to leverage technologies like the cloud and AI. More than 74% of respondents say their auditors use advanced technologies, with 94% reporting that auditors’ use of these technologies improves audit quality.
When looking at which technologies auditors leverage the most, the cloud comes out on top at 91%. Data and analytics is the second-most-cited technology (73%), followed by visualization (62%), AI (56%) and workflow automation (55%). Others include natural language processing and robotic process automation, cited by 45% and 30%, respectively.
With these technologies, companies are seeing a range of benefits, the biggest being increased visibility into end-to-end processes and controls, which was cited by 30% of respondents. Young leaders are also better able to identify data outliers and anomalies (14%), gain real-time insights into areas of heightened risk or control weakness (12%), and do quarterly and year-end reporting much faster (11%) with the help of these technologies.
The Importance Of The Cloud
In the survey, no other technology is as highly rated as the cloud. Two-thirds say the cloud is essential in business, and another 18% say it will be a core technology within 24 months. In fact, it is for all intents and purposes “commonplace,” says Kelli Murphy, Senior Manager of Accounting, Operations and Finance at General Assembly, a leading education organization. “The cloud is at a place in time where it’s reliable, and the proper controls are in place from the third-party service providers that are offering it and utilizing it as their platform,” she explains.
That doesn’t mean the cloud should be leveraged without proper vetting of systems and providers. Reliance on third parties to host financial reporting data is a top concern when using the cloud, as indicated by 28% of respondents. Executives are also worried about privacy breaches or unauthorized access to their organization’s data (21%). Despite these concerns, however, finance leaders are generally comfortable with the cloud, with less than 1% saying their company has no plans to use the technology.
Challenges Remain, But Opportunity To Improve Audit Quality Is Clear
When asked about the greatest challenges in using any or all advanced technologies in support of their financial reporting processes, 41% said insufficient data was the largest hurdle, followed by an inability to effectively and efficiently access digital data (30%). Other challenges include insufficient infrastructure to support advanced technologies (9%), insufficient resources (7%) and inadequate initial assessment of implementation scope (7%).
Despite these challenges, few dispute the potential of these technologies. In fact, only 1% of respondents don’t currently use or have any plans to implement them in their business. This makes sense given how these tools can improve the audit.
As Bill Tomazin, Managing Partner, West Region and National Audit Solutions at KPMG US, says: “The age of the smart audit is dawning, with data and advanced technologies enabling auditors to more consistently and effectively deliver high quality audits while gaining broader perspectives and insights into client data, systems and records. What is clear, across all generations, is that financial executives are looking for opportunities to drive more effective business models and optimal professional experiences for their people. Advanced technologies provide an opportunity to realize success.”
This article originally appeared on Forbes