WEBVTT - Audit Innovation: tech-driven opportunities for smaller firms 0:00:08.200 --> 0:00:12.559 Hello, my name is Gillian Bowen. This is Small Firm, 0:00:12.560 --> 0:00:13.520 Big Impact. 0:00:19.480 --> 0:00:23.280 We need to track advancement ...keep ourselves ready for the 0:00:23.280 --> 0:00:26.200 new developments. We need to work together to ensure the 0:00:26.200 --> 0:00:29.600 new technologies are implemented effectively and ethically. 0:00:29.920 --> 0:00:33.600 I think one of the biggest challenges is the necessary skills, um, 0:00:33.600 --> 0:00:36.839 within the workforce and also time and capacity. 0:00:42.520 --> 0:00:45.559 It's the podcast giving Chartered Accountants the up to date 0:00:45.560 --> 0:00:49.400 information they need to do their jobs. Each episode I 0:00:49.400 --> 0:00:54.000 share resources, tools and expert advice provided by Chartered Accountants 0:00:54.040 --> 0:00:57.240 Australia and New Zealand and a range of people across 0:00:57.240 --> 0:01:00.600 our profession. So get following the pod in your favourite 0:01:00.600 --> 0:01:11.440 podcast app. Let's start a conversation. Today we have Steven Watson, 0:01:11.440 --> 0:01:15.680 Managing Director at National Audits Group, and Masood Mahmood, Senior 0:01:15.720 --> 0:01:18.759 Policy Advocate in the audit and assurance team at Chartered 0:01:18.760 --> 0:01:22.600 Accountants Australia and New Zealand. The topic: the cutting edge 0:01:22.640 --> 0:01:27.319 advancements transforming the audit profession. We're going to dive into 0:01:27.319 --> 0:01:31.959 the world of advanced technologies in audit, which includes discussing 0:01:31.959 --> 0:01:37.240 how AI, automation and other innovative tools are revolutionising the 0:01:37.240 --> 0:01:43.520 audit process and enhancing efficiency and ensuring higher quality outcomes. 0:01:43.560 --> 0:01:46.120 We're going to look at the opportunities and challenges for 0:01:46.120 --> 0:01:51.240 audit firms, especially smaller size practices, and unpack how to 0:01:51.280 --> 0:01:56.240 stay competitive. And as usual on my podcast episodes, we're 0:01:56.240 --> 0:02:00.850 going to highlight a new CA ANZ resource The audit 0:02:00.850 --> 0:02:05.690 and technology playbook A practitioner's guide. Steven and Masood welcome 0:02:05.690 --> 0:02:07.570 to Small Firm, Big Impact. 0:02:07.890 --> 0:02:10.570 Thanks for having me today. It's great to be here. 0:02:10.730 --> 0:02:11.490 Thanks, Gill. 0:02:11.810 --> 0:02:15.410 Okay. This is going to be a really interesting discussion. 0:02:15.410 --> 0:02:17.290 And to help set it up, Masood I thought I'd talk 0:02:17.290 --> 0:02:20.769 to you first. Can you give us an overview of 0:02:20.770 --> 0:02:24.049 the advanced technologies currently being used in audits? 0:02:24.730 --> 0:02:29.370 Thanks, Gill. Honestly, the audit profession is really stepping up, 0:02:29.570 --> 0:02:35.570 tapping into some amazing technologies. This is transforming into efficient audit, 0:02:35.610 --> 0:02:40.250 smarter insights and greater impacts. Let's start with artificial intelligence 0:02:40.250 --> 0:02:45.130 and machine learning. These are absolutely excelling in predictive analytics 0:02:45.130 --> 0:02:50.410 and detecting anomalies. It's a game changer. Then we have cybersecurity. 0:02:50.450 --> 0:02:54.210 It's massive, huge focus right now with the growing cyber 0:02:54.210 --> 0:02:57.530 threat on the rise, everyone knows why it's important. So 0:02:57.530 --> 0:03:00.570 you need to be having a best tech on your side. 0:03:01.169 --> 0:03:06.410 Next is the Internet of Things. Imagine all smart devices 0:03:06.570 --> 0:03:10.450 talking to each other, moving data in real time. No 0:03:10.450 --> 0:03:14.930 human hands needed. This is like a whole system thinking 0:03:14.930 --> 0:03:19.370 on its own. Then there is robotic process automation, which 0:03:19.370 --> 0:03:26.010 uses software bots for repetitive tasks, freeing human resources for 0:03:26.010 --> 0:03:31.250 a better and useful work. Next, we have blockchain technology. 0:03:31.690 --> 0:03:36.610 This ensures secure and transparent transaction. This is like a 0:03:36.610 --> 0:03:42.810 tamper proof digital ledger. Lastly, big data and analytics are 0:03:42.810 --> 0:03:48.090 truly amazing for uncovering trends and patterns in huge data sets, 0:03:48.130 --> 0:03:53.570 giving us deeper insight into business operations. Bottom line, auditing 0:03:53.570 --> 0:03:56.370 is moving fast and it's leading the change. 0:03:56.420 --> 0:04:00.460 Mhm. Mhm. Okay then Steven to you from your perspective 0:04:00.820 --> 0:04:03.980 how are these technologies that, the ones that Masood's talking about, 0:04:03.980 --> 0:04:06.260 how are they transforming the audit process? 0:04:06.380 --> 0:04:09.060 Um I might just talk about the, I suppose practical 0:04:09.060 --> 0:04:13.300 technologies from a client communication and management perspective and how 0:04:13.300 --> 0:04:18.659 they have really transformed the audit to and client relationship, um, 0:04:18.660 --> 0:04:21.740 and allows things to be really streamlined, um, and to 0:04:21.740 --> 0:04:24.940 be able to get access to the client data in 0:04:24.940 --> 0:04:28.460 real time, um, instead of a static data set. We're 0:04:28.460 --> 0:04:32.179 able to access that data and look at the data sets, um, 0:04:32.300 --> 0:04:35.900 turn unstructured data into very structured data so that we 0:04:35.900 --> 0:04:39.739 can analyze that and determine our audit techniques and processes 0:04:39.980 --> 0:04:45.380 quite efficiently. We've also adapted the use of artificial intelligence 0:04:45.380 --> 0:04:49.700 when it comes to Gen AI, and how that's being 0:04:49.700 --> 0:04:54.980 used in the audit assessment from a risk perspective, but 0:04:54.980 --> 0:04:58.299 also a planning perspective and allowing our auditors to really 0:04:58.300 --> 0:05:03.140 understand the client at their environment and how they can 0:05:03.140 --> 0:05:07.460 determine the specific risks to address as part of the 0:05:07.460 --> 0:05:08.740 audit process. 0:05:09.060 --> 0:05:13.020 Mhm. Okay. All right. So then Masood, back to you 0:05:13.339 --> 0:05:17.420 in in what ways have advanced technologies improved the quality 0:05:17.420 --> 0:05:19.820 and accuracy of the output? 0:05:20.940 --> 0:05:26.100 It's fascinating, Gill, how audit has evolved over the years due 0:05:26.100 --> 0:05:31.140 to the advanced technologies. First off, smart software, AI and 0:05:31.140 --> 0:05:36.100 machine learning, it's helping to reduce the manual errors instead 0:05:36.100 --> 0:05:40.700 of human combing through endless data manually, AI can analyse 0:05:40.700 --> 0:05:45.140 massive set of data, instantly spotting patterns and red flags 0:05:45.140 --> 0:05:48.340 and variations. So this would have easily slipped through the 0:05:48.339 --> 0:05:53.780 cracks before. We've got optical character recognition technology, which is 0:05:53.779 --> 0:05:58.310 transforming the messy, time consuming data entry task. So we 0:05:58.350 --> 0:06:03.670 don't need to retype scan documents and it doesn't stop there. 0:06:03.990 --> 0:06:08.430 Data analytics tools are giving auditors real time insights into 0:06:08.430 --> 0:06:12.670 client operations, not just surface level checks, but deep dives, 0:06:12.710 --> 0:06:16.750 strength in fraud detection and risk assessment. AI and machine 0:06:16.750 --> 0:06:20.789 learning tools even learn from their data over time, meaning 0:06:20.790 --> 0:06:26.150 their accuracy keeps getting sharper every time on every engagement. 0:06:26.510 --> 0:06:29.670 On top of that, as Steven mentioned, Gen AI and 0:06:29.670 --> 0:06:34.670 natural language processing tools are transforming research and compliance work. 0:06:35.150 --> 0:06:39.750 This will help us to access the standards, regulations and 0:06:39.750 --> 0:06:44.510 best practices. Is now faster and more precise. And let's 0:06:44.510 --> 0:06:49.550 not forget about the cloud technology. With real time teamwork 0:06:49.550 --> 0:06:53.630 and data sharing, we are cutting down on miscommunications, lost 0:06:53.670 --> 0:06:57.030 files and version control issues, all of which takes so 0:06:57.029 --> 0:07:02.310 much of time. So better tool, sharper insights and stronger outcomes. 0:07:03.230 --> 0:07:06.430 I like that aspect as well. Of cutting down the 0:07:06.430 --> 0:07:09.150 manual are bits and pieces that people are having to 0:07:09.150 --> 0:07:12.750 do then. So, Steven, can you share some specific examples 0:07:12.750 --> 0:07:16.710 or case studies perhaps where this technology has made a 0:07:16.710 --> 0:07:17.990 significant difference? 0:07:18.030 --> 0:07:20.750 Yeah, I certainly can. I can probably give you two examples, 0:07:20.790 --> 0:07:24.790 and it's really driven by the data from the revenue 0:07:24.790 --> 0:07:29.590 of our clients. So one example is an alcohol retailer 0:07:29.990 --> 0:07:33.990 and it's basically a marketer across a group. There's 2800 0:07:33.990 --> 0:07:38.350 outlets across Australia and them getting access to their point 0:07:38.390 --> 0:07:42.990 of sale data on a timely basis, which drives their revenue. 0:07:43.270 --> 0:07:46.150 It gives them the insights and the tools that they 0:07:46.150 --> 0:07:50.510 need to be able to reconcile their revenue data and 0:07:50.510 --> 0:07:53.320 also make decisions based on that from our perspective as 0:07:53.320 --> 0:07:58.320 an auditor, um, looking at the controls surrounding that data, um, 0:07:58.320 --> 0:08:02.160 and the timeliness of it, because they basically moved from, 0:08:02.560 --> 0:08:05.400 I think it was six weeks to reconcile their data 0:08:05.440 --> 0:08:09.080 after month end to basically three days, um, just because 0:08:09.120 --> 0:08:12.400 the technology that they've adopted. And I probably just wanted 0:08:12.440 --> 0:08:15.640 to put a point there in terms of emphasising, um, 0:08:15.640 --> 0:08:18.560 the auditors really working with their clients so that the 0:08:18.560 --> 0:08:23.080 client data is as clean and accurate as possible. Uh, 0:08:23.080 --> 0:08:27.600 another example is a roadside assistance service. Um, and they're 0:08:27.600 --> 0:08:32.559 basically dealing with a mountain of data. Um, previously they 0:08:32.960 --> 0:08:35.760 once again, it took them probably four weeks to reconcile 0:08:35.760 --> 0:08:41.080 that data after year end and basically just a matter of hours, um, 0:08:41.080 --> 0:08:44.160 after after year end. So what that gives the auditor 0:08:44.160 --> 0:08:48.079 is a lot more confidence, um, in the data coming through. Um, 0:08:48.080 --> 0:08:49.840 and we can rely on that a lot more and 0:08:49.840 --> 0:08:52.920 spend time elsewhere um, in terms of the audit process. 0:08:52.960 --> 0:08:55.720 What's the tech they're using power BI. 0:08:56.520 --> 0:09:00.440 Okay, so Microsoft Power BI in the example of the 0:09:00.440 --> 0:09:04.479 alcohol retailer they invested, I think it was around $14 0:09:04.480 --> 0:09:07.400 million over a 4 to 5 year period about ten 0:09:07.400 --> 0:09:11.480 years ago. Basically that whole project had to be scrapped 0:09:11.480 --> 0:09:14.160 because the technology advanced that quickly. Wow. They could get 0:09:14.160 --> 0:09:17.280 access to Microsoft buy off the shelf. 0:09:18.160 --> 0:09:23.280 Wow. Hopefully no one crashed while listening to that, those figures. 0:09:23.280 --> 0:09:27.120 So there are risks then that that come through with 0:09:27.160 --> 0:09:30.360 using tech. And and especially as things evolve so rapidly 0:09:30.360 --> 0:09:32.640 as you've just talked about there, Steven, what are those 0:09:32.640 --> 0:09:36.360 key risks associated with the use of advanced tech in 0:09:36.360 --> 0:09:40.120 audit and and perhaps, perhaps keeping in mind that there 0:09:40.160 --> 0:09:44.000 there could be automation bias or overreliance on the technology? 0:09:44.040 --> 0:09:47.400 Yeah, there's certainly security risks over the data. Um, and 0:09:47.440 --> 0:09:49.800 I'd probably recommend that all firms really make that a 0:09:49.800 --> 0:09:53.130 priority in terms of their cybersecurity at the firm level, 0:09:53.370 --> 0:09:57.290 but also make significant recommendations through their audit, management letters 0:09:57.290 --> 0:10:01.329 and communications with relevant boards or management that they need 0:10:01.330 --> 0:10:06.130 to address that cybersecurity threat and bring in consultants, whether 0:10:06.370 --> 0:10:10.490 firms have got those expertise in-house, or recommend outside consultants 0:10:10.490 --> 0:10:13.570 to come in and strengthen the security around that data 0:10:13.570 --> 0:10:18.410 in terms of information bias or from the the technology. 0:10:18.929 --> 0:10:20.810 I think there's got to be a level of professional 0:10:20.809 --> 0:10:24.650 skepticism over the the data that's coming through and the 0:10:24.650 --> 0:10:30.570 information and really questioning the or placing reliance on the data. 0:10:30.570 --> 0:10:33.650 So you really need to look at the controls around 0:10:33.650 --> 0:10:38.010 how that data is compiled, how how it's accessed, and 0:10:38.050 --> 0:10:41.610 basically how it's reported. And over time, you can build 0:10:41.610 --> 0:10:45.610 that reliance up by by looking at those specific controls. 0:10:45.650 --> 0:10:49.450 Um, we would no doubt have some resources on cyber 0:10:49.530 --> 0:10:52.370 security that our members can access. So I will track 0:10:52.410 --> 0:10:55.450 down some links to, uh, bits and pieces that are 0:10:55.450 --> 0:10:57.650 relevant here and put them in the episode notes for 0:10:57.650 --> 0:11:01.410 those listening along. But Masood, building on that, how can 0:11:01.450 --> 0:11:04.450 auditors ensure that human oversight and how can they ensure 0:11:04.450 --> 0:11:08.250 that it remains a priority while also leveraging the new tech? 0:11:08.730 --> 0:11:13.050 Oh, I think it's a very important question. And if I, 0:11:13.090 --> 0:11:17.370 if I, if I think about what Steven has given 0:11:17.370 --> 0:11:21.050 the examples, I think it's very critical to maintain a 0:11:21.090 --> 0:11:25.330 careful balance between, you know, the adoption of technologies and 0:11:25.330 --> 0:11:31.130 the application of human oversight. Auditors must exercise professional skepticism 0:11:31.130 --> 0:11:36.490 and sound judgment when interpreting the outputs of these technologies. 0:11:36.890 --> 0:11:41.490 For instance, while AI is highly effective in progressing large 0:11:41.490 --> 0:11:46.530 volumes of data, it cannot replicate the understanding, critical thinking, 0:11:46.530 --> 0:11:52.580 and context driven ... insights that experience auditor bring. Auditor 0:11:52.580 --> 0:11:57.260 must also be mindful of the inherent limitations of these technologies, 0:11:58.260 --> 0:12:02.900 and ensuring that audit judgments are never unduly influenced by 0:12:02.940 --> 0:12:09.260 flawed or incomplete information. Now, both the IAASB and IESBA 0:12:09.260 --> 0:12:13.339 have recognised the existence of this automation bias as an 0:12:13.340 --> 0:12:18.340 example of unconscious auditor bias that practitioners need to be 0:12:18.340 --> 0:12:25.020 aware of when exercising professional judgment. Additional auditors must adhere 0:12:25.020 --> 0:12:31.420 to highest ethical standards, including confidentiality, confidentiality, integrity, and objectivity. 0:12:31.820 --> 0:12:34.380 And I think with the right balance of technology and 0:12:34.380 --> 0:12:39.059 human insights, the future of auditing is bright and transformational. 0:12:39.700 --> 0:12:42.980 I do love putting an IESBA link in my episode 0:12:42.980 --> 0:12:45.420 show notes. So I will I will get those off you, Masood, 0:12:45.420 --> 0:12:47.820 and will put them in so that they're easily accessible 0:12:47.820 --> 0:12:49.860 for those who are listening along, if they want to refresh 0:12:49.860 --> 0:12:52.340 their memory. Steveen, then what are some of the biggest 0:12:52.340 --> 0:12:56.180 challenges auditors face when integrating this in this advanced tech 0:12:56.179 --> 0:12:57.179 into their work? 0:12:57.300 --> 0:13:00.980 I think one of the biggest challenges is the necessary skills, um, 0:13:01.020 --> 0:13:04.900 within the workforce and also time and capacity, um, and 0:13:04.900 --> 0:13:08.260 to have the bandwidth to have the. 0:13:08.980 --> 0:13:11.179 I think that's a fair word. You've got you've kind 0:13:11.220 --> 0:13:14.220 of got to have the headspace to sit down and go, right. 0:13:14.260 --> 0:13:16.060 What do I, what what what do I need to 0:13:16.059 --> 0:13:18.260 learn here? What do I not know? What questions do 0:13:18.260 --> 0:13:18.940 I need to ask? 0:13:18.980 --> 0:13:22.459 Most definitely. And with all the competing priorities and deadlines, um, 0:13:22.460 --> 0:13:25.500 it's it's quite difficult to take the time to invest. Um, 0:13:25.500 --> 0:13:29.140 so I think firms really need to have a clear strategy, um, 0:13:29.140 --> 0:13:32.420 and the capacity, um, so they need to invest in 0:13:32.460 --> 0:13:36.700 more people, resources, um, and bringing in external consultants who 0:13:36.700 --> 0:13:40.699 may have the necessary skills and resources to do it, 0:13:40.700 --> 0:13:45.620 the implementation quite efficiently and effectively. Um, on the skills side, um, 0:13:45.620 --> 0:13:48.030 I think firms really need to change their strategy in 0:13:48.030 --> 0:13:50.670 terms of, you know, what are the skill set of 0:13:50.710 --> 0:13:53.550 their auditors are and probably have more of a mindset 0:13:53.550 --> 0:13:58.709 around it, cybersecurity, but also moving into the ESG space 0:13:58.870 --> 0:14:01.670 and getting access to that data. Um, and, you know, 0:14:01.710 --> 0:14:03.550 how are we going to be able to audit that? 0:14:03.550 --> 0:14:07.589 So really need to look forward, not back, and really 0:14:07.590 --> 0:14:11.830 adapt to the new technology. Another key obstacle, um, is 0:14:11.830 --> 0:14:16.510 really the change management across the workforce. Um, and making 0:14:16.510 --> 0:14:21.910 sure that a positive light is placed on being progressive, um, 0:14:22.070 --> 0:14:25.430 across your team, um, and, you know, continually sharing those 0:14:25.430 --> 0:14:28.710 wins in terms of efficiency gains, um, you know, what 0:14:28.710 --> 0:14:32.110 it looks like in terms of working smarter, not harder. 0:14:32.430 --> 0:14:34.910 Um, yeah. That's right. So giving a clear example of 0:14:34.910 --> 0:14:37.710 the results of actually embracing this because it is hard 0:14:37.710 --> 0:14:40.990 to embrace change that might blow your mind. 0:14:41.150 --> 0:14:42.070 Yeah. Most definitely. 0:14:42.150 --> 0:14:46.150 Um, look, um, Masood then thinking of smaller practices. I mean, 0:14:46.190 --> 0:14:49.870 they they are, um. Hello out there. They are many 0:14:49.870 --> 0:14:53.030 of the wonderful listeners of this podcast. How can they 0:14:53.030 --> 0:14:56.750 overcome these challenges that Steven's talking about? To fully leverage 0:14:56.750 --> 0:14:59.350 the benefits of these new technologies? 0:14:59.910 --> 0:15:03.070 Uh, I think Steven has touched on some of the 0:15:03.110 --> 0:15:07.670 key points in his response. So I mean, by taking 0:15:07.670 --> 0:15:12.790 a strategic approach of technology integration, smaller practices that can 0:15:12.830 --> 0:15:17.510 absolutely overcome these challenges at a firm level, it's crucial 0:15:17.550 --> 0:15:22.830 to establish governance and oversight for acquiring and developing and 0:15:22.830 --> 0:15:28.030 then implementing and then using technologies. That means investing in 0:15:28.030 --> 0:15:32.670 scalable and adaptable technologies, tools that can actually grow and 0:15:32.670 --> 0:15:37.910 evolve alongside the firm. This involves confirming that technology meets 0:15:37.910 --> 0:15:42.670 the requirements. I mean, you just don't blindly bring in technology. 0:15:42.710 --> 0:15:47.840 You should understand and tested the technology, not for smaller practices. 0:15:47.840 --> 0:15:51.880 This might not be possible. And, uh, and that's the 0:15:51.880 --> 0:15:55.040 point where they need to take necessary steps to ensure 0:15:55.320 --> 0:15:58.160 that the audit firm and the audit teams are in 0:15:58.160 --> 0:16:02.120 control of technology being used as they are properly trained. 0:16:02.800 --> 0:16:06.360 And I should also mention here that the International Standard 0:16:06.360 --> 0:16:11.720 on Quality Management also outline a comprehensive framework for managing 0:16:11.880 --> 0:16:15.640 quality within the audit firm. And this will definitely help. 0:16:15.640 --> 0:16:18.760 The other key focus area, as Steven mentioned, is that 0:16:18.760 --> 0:16:22.520 the continuous skill development that's that's the key. And remember that, 0:16:22.560 --> 0:16:25.400 you know, that's the technology change is not just about system. 0:16:25.440 --> 0:16:27.200 It's it's about the people as well. 0:16:27.240 --> 0:16:29.760 Um, now there will be people listening along going, this 0:16:29.760 --> 0:16:31.120 is all well and good, but how do I know 0:16:31.120 --> 0:16:33.680 where do I go to start? And the good news is, 0:16:33.920 --> 0:16:38.640 is that CA and ACCA have developed a guide, a 0:16:38.640 --> 0:16:43.560 playbook that provides practical guidance for audit firms, especially small 0:16:43.560 --> 0:16:46.920 and medium sized practices. So, Masood, with that in mind, 0:16:46.920 --> 0:16:49.480 can you highlight some of the most important insights or 0:16:49.480 --> 0:16:51.320 recommendations from the guide? 0:16:51.760 --> 0:16:56.880 Absolutely. I think the playbook offers several key insights, recommendations 0:16:56.880 --> 0:16:59.800 for specifically for the SMP. And I think that's the 0:17:00.120 --> 0:17:02.600 great way of letting our members know that, you know, 0:17:02.640 --> 0:17:06.760 this is available. The playbook outlines key technology trends that 0:17:06.760 --> 0:17:12.440 are currently influencing the enterprise landscape. It also provides practical examples. 0:17:12.440 --> 0:17:16.120 Some of them Steven just mentioned, and how technologies like 0:17:16.160 --> 0:17:19.600 AI and machine learning and data analytics can be used 0:17:19.600 --> 0:17:23.800 to improve audit outputs and efficiency. And then it talks 0:17:23.800 --> 0:17:28.600 about some of the relevance to the specifically relevance to SMPs. 0:17:28.960 --> 0:17:32.600 And at the end of the the the the the playbook, 0:17:32.600 --> 0:17:35.720 there is a section which is most importantly, it lays 0:17:35.720 --> 0:17:39.320 down the roadmap for the firms to develop a comprehensive 0:17:39.359 --> 0:17:45.250 technology strategy with clear digital transformation. Now this includes, uh, again, 0:17:45.290 --> 0:17:48.610 I mean, Steven mentioned a clear change management program that 0:17:48.609 --> 0:17:53.130 actually aligns with their own technology technology strategy, and it 0:17:53.170 --> 0:17:56.409 involves staff in key decision making processes. You need to 0:17:56.410 --> 0:17:59.810 remember that there will when you are implementing technology, there 0:17:59.810 --> 0:18:02.409 will always be a group which is which is causing 0:18:02.410 --> 0:18:04.450 some sort of a resistance so you need to take 0:18:04.690 --> 0:18:08.770 along those people. Uh, you need to take people along 0:18:08.770 --> 0:18:12.129 with you. Um, on, on, on, on these sort of 0:18:12.170 --> 0:18:15.609 a journey. And, and this highlights the engagement with, with 0:18:15.609 --> 0:18:20.210 your external IT specialist, your vendor, uh, CA ANZ community could be 0:18:20.210 --> 0:18:23.490 helpful because there might be other SMPs who might, uh, 0:18:23.490 --> 0:18:26.449 who would have been on the same journey before. The 0:18:26.450 --> 0:18:31.530 roadmap emphasises the need for robust governance and guidelines to 0:18:31.570 --> 0:18:35.650 manage the ethical and professional implications, as well as, uh, 0:18:35.650 --> 0:18:41.129 the importance of constant skills development. Additional integrating AI ... 0:18:41.170 --> 0:18:45.290 into the audit process, actually position these small firms as 0:18:45.290 --> 0:18:48.290 an attractive workplace and this will solve the other issue 0:18:48.330 --> 0:18:50.449 we have been talking on the on some of the 0:18:50.450 --> 0:18:54.409 other uh, publications through CA ANZ is that, you know, the 0:18:54.410 --> 0:18:57.970 talent shortage. Yes. Uh, overall, I think it's a it's 0:18:58.010 --> 0:19:01.690 a valuable resource for the SMP looking to navigate a 0:19:01.690 --> 0:19:04.210 rapidly changing landscape in other technology. 0:19:04.490 --> 0:19:06.970 I do like a checklist. I do like a plan, 0:19:06.970 --> 0:19:10.250 and I do like clear communication. And so of course, 0:19:10.250 --> 0:19:12.129 there'll be a link to that in the show notes. 0:19:12.130 --> 0:19:14.090 So then a final thought from you, Steven, because we're 0:19:14.090 --> 0:19:15.850 about to run out of time and I, I do 0:19:15.850 --> 0:19:19.130 like to keep these episodes around 20 minutes or less. 0:19:19.369 --> 0:19:21.889 How how do you see all of this being applied 0:19:21.890 --> 0:19:24.290 by by audit firms? And I'm happy for you to 0:19:24.330 --> 0:19:26.250 touch on the sorts of things that they're not thinking 0:19:26.250 --> 0:19:27.850 about that they need to think about. And this is 0:19:27.850 --> 0:19:29.090 why that they should do it. 0:19:29.090 --> 0:19:30.650 I think there really needs to be a focus on 0:19:30.690 --> 0:19:33.369 the client and the relationship, um, and working with the 0:19:33.369 --> 0:19:37.090 client to be able to get robust, um, data coming 0:19:37.090 --> 0:19:38.770 through so that we can actually use that with the 0:19:38.770 --> 0:19:43.740 artificial intelligence and the technology that's available. Um, also through 0:19:43.740 --> 0:19:48.580 the use of better and more timely recommendations with their clients. Um, 0:19:48.580 --> 0:19:51.820 so if the client can be doing something more efficiently 0:19:51.820 --> 0:19:54.820 or effectively, um, then we can obviously do our audit 0:19:54.859 --> 0:19:58.780 much more effectively and efficiently as well. Um, and it 0:19:58.780 --> 0:20:01.859 needs to be a clear, as Masood mentioned before, there 0:20:01.859 --> 0:20:05.899 needs to be a clear investment in additional training and resources, 0:20:05.900 --> 0:20:10.020 especially in the use of gen AI. I know that 0:20:10.500 --> 0:20:14.580 CA ANZ has recently rolled out some specific AI training 0:20:14.580 --> 0:20:17.740 programs which look quite attractive. Um, so I would highly 0:20:17.740 --> 0:20:22.580 recommend jumping on the CAA ANZ website and having a 0:20:22.580 --> 0:20:24.580 look at those courses that are available. 0:20:24.619 --> 0:20:26.180 Yeah, that's a really good point. Steven and I will 0:20:26.180 --> 0:20:29.100 make sure I put a link to those, uh, in 0:20:29.140 --> 0:20:32.459 the episode notes as, as well. Look, before we wrap up, then, 0:20:32.619 --> 0:20:35.740 a final thought from both of you about, um, about 0:20:35.740 --> 0:20:39.659 this space and the sorts of opportunities it really, Um. 0:20:39.700 --> 0:20:42.020 It really presents to the profession. Masood. 0:20:42.500 --> 0:20:46.900 Oh. Thanks, Gill. Uh, I think few few years ago, 0:20:47.100 --> 0:20:51.140 when we published our 2019 report, the use of AI 0:20:51.260 --> 0:20:56.020 and machine learning was in its infancy. Fast forward now 0:20:56.700 --> 0:20:59.020 everyone is using it. It's part of our day to 0:20:59.020 --> 0:21:02.540 day lives and businesses. Yeah. And this tells us the 0:21:03.020 --> 0:21:08.100 the technology is accelerating rapidly. And the technologies we mentioned 0:21:08.260 --> 0:21:13.260 at the beginning of this episode would remain relevant. On 0:21:13.260 --> 0:21:17.660 top of that, the, uh, we need to track advancement 0:21:17.740 --> 0:21:21.740 or keep ourselves ready for the new developments and aware 0:21:21.740 --> 0:21:26.260 the risk associated. I'll just give a little example of 0:21:26.660 --> 0:21:29.940 Agentic AI, which is a new, new thing in it.... 0:21:29.980 --> 0:21:33.740 This is this is, uh, kind of your specific 0:21:33.780 --> 0:21:37.859 hired bot, uh, or an AI assistant tool, which you 0:21:37.859 --> 0:21:41.150 can deploy onto any function and which will work for 0:21:41.150 --> 0:21:44.190 you for the rest of the time until it's deployed. 0:21:44.190 --> 0:21:50.310 So and a very, very recently developed tool. The other 0:21:50.310 --> 0:21:54.629 part is the collaboration between different stakeholders is is absolutely 0:21:54.630 --> 0:22:01.270 critical for the successful integration of these advanced technologies. Audit auditors, 0:22:01.270 --> 0:22:06.550 professional bodies like CA ANZ, technology providers and regulators. We 0:22:06.550 --> 0:22:09.350 need to work together to ensure the new technologies are 0:22:09.350 --> 0:22:13.510 implemented effectively and ethically. At the same time, the audit 0:22:13.510 --> 0:22:16.550 firms have a critical role in developing the next generation 0:22:16.550 --> 0:22:20.590 of auditors, and the next generation of auditors must be 0:22:20.590 --> 0:22:24.990 agile and technological fluent not just the data and analytics, 0:22:24.990 --> 0:22:28.389 but also AI and emerging trend. So I think by 0:22:28.430 --> 0:22:32.590 taking a proactive approach, firms can stay competitive. And with 0:22:32.630 --> 0:22:36.990 this collaboration, this can truly make a difference and it 0:22:36.990 --> 0:22:38.510 will take us where we want. 0:22:39.590 --> 0:22:42.750 So opportunities to be excited about I feel rather than 0:22:43.070 --> 0:22:45.830 nervous about. Steven, what's your final thoughts? 0:22:46.030 --> 0:22:49.670 The key points to take away from this session is 0:22:49.670 --> 0:22:53.550 probably to have a clear focus and strategy in terms 0:22:53.550 --> 0:22:56.430 of the adoption of the future technologies, and have that 0:22:56.430 --> 0:22:59.390 willingness to change and adapt to these new technologies, and 0:22:59.390 --> 0:23:03.830 continually communicating that with your team, but also your clients. 0:23:04.070 --> 0:23:09.950 With the advancements of technology, obviously come efficiencies. Therefore, you 0:23:09.950 --> 0:23:13.710 should have more time to focus on key audit areas 0:23:14.030 --> 0:23:17.270 that necessarily didn't get the necessary time in the past, 0:23:17.510 --> 0:23:21.470 probably with the time savings that you get from, uh, 0:23:21.710 --> 0:23:25.270 in terms of the human intervention, um, can then be 0:23:25.270 --> 0:23:29.669 applied with the adoption of this technology into the to 0:23:29.710 --> 0:23:32.230 the audit process, because it will come at an additional 0:23:32.230 --> 0:23:36.600 cost from a software perspective. Um, however, you can then 0:23:36.640 --> 0:23:39.720 balance that with the savings in your human capital. 0:23:40.320 --> 0:23:43.200 So again, more more opportunities. I like that look. That 0:23:43.200 --> 0:23:46.000 is all. We have time for some valuable insights there 0:23:46.040 --> 0:23:49.480 on the power of advanced technologies in audit. It's clear 0:23:49.480 --> 0:23:53.680 that these innovations are reshaping the audit landscape and offering 0:23:53.680 --> 0:23:57.159 exciting opportunities for firms of all sizes. For our listeners, 0:23:57.160 --> 0:24:00.280 don't forget to check out the guide and other resources 0:24:00.280 --> 0:24:03.600 available there on the Chartered Accountants Australia and New Zealand website, 0:24:03.600 --> 0:24:07.240 and I will put useful links in the episode description. 0:24:07.480 --> 0:24:09.239 As always, if you want to get in touch with 0:24:09.240 --> 0:24:15.480 the podcast, email us: podcast@charteredaccountantsanz.com and follow the podcast in 0:24:15.480 --> 0:24:18.639 your favourite podcast app. We're in all of them. Let's 0:24:18.640 --> 0:24:21.760 start a conversation. Thank you Steven and Masood for being 0:24:21.760 --> 0:24:24.720 my experts on Small Firm, Big Impact. 0:24:24.720 --> 0:24:25.520 Thank you Gillian. 0:24:25.760 --> 0:24:26.520 Thanks, Gill. 0:24:26.560 --> 0:24:27.240 Bye bye.