Accountants and auditors coping with an onslaught of new requirements are beginning to regard technology as a critical means of compliance. In fact, some would say it’s the only realistic means to achieve compliance.

Like other areas of the business, accounting and auditing are in something of a transformation as part of a digital mega-trend that is driving technological advancement. The digitizing of information has been going on since about the early 2000s, says Will Bible, audit innovation leader at Deloitte & Touche.

Using a variety of different tools and approaches over many years, companies have been converting their information on products, services, and customers to digital data, developing new processes for how they do business along the way. That sets the stage for the next phase of technological advancement, which is automation and analytics, says Bible.

“Once you have information that’s digitized, how do you connect your systems to business processes so that it becomes automated?” says Bible. Technology is emerging to enable systems to interface with one another—robotics process automation, or RPA, as one example of such automation.

“RPA is essentially coding bots to act as if people were acting in a routine way,” says Bible. “Bots interface with the system like a person to process information systematically from one system to another. It saves people from having to copy and paste information from one system to another.”

A new lease accounting standard has demonstrated for many companies where they could better leverage technology to not just achieve accounting compliance, but to improve their management of leases. At many companies, lease contracts have been signed and managed using various different methods at various locations literally all over the world.

Now companies are using various types of tools to centralize leases into single systems, read the contracts for abstract terms that are important to the new accounting, enter data into accounting systems, and perform the new lease accounting calculations. “Anywhere you have systems that don’t talk to each other, one option is to build a bot to do that for you,” says Bible.

“To enable folks to really utilize technology, you have to get down into the details.”

Dan Sunderland, Chief Auditor, Audit Practice, Deloitte


Cloud technology is another means of interfacing that is transforming accounting processes. Stacey Gilbert, senior vice president at KeyBank, says its cloud solution is proving critical to the implementation of and compliance with major changes in accounting standards.

Public companies adopted pervasive new requirements for how to recognize revenue at the start of 2018, and now they’re sprinting to the finish line to be ready for equally sweeping rules on how to recognize leases in financial statements. For financial institutions, an even more critical change takes place the following year is how to recognize credit losses, adopting the “current expected credit losses” model for projecting and reporting where a company may have risk in its portfolio.

New accounting standards are not only major changes for the accounting office, but they represent major changes for virtually every other area of the organization as well. “The implementation efforts touch so many different areas throughout the organization, it requires a lot of collaboration,” says Gilbert.

A cloud approach connects people throughout the organization and allows them to work together more effectively, accessing and sharing information more efficiently and more confidently. That has been important in assessing the impact of new accounting standards, gathering and sharing data, and documenting every step of the journey.

“As accounting experts, we’re relying on information coming from other people,” says Gilbert. As they rely on that information to develop accounting policies, establish judgments and estimates, and assert proper control over financial statement assertions, accountants need to document that they’ve done their due diligence.

Using a cloud application enables not only the collaboration necessary to establish accounting policies and arrive at critical estimates and judgments, but it also documents the entire process, says Gilbert. “Our auditors want to look at the process, and this is an easy way to evidence the review process,” she says.

Beyond the development and management of accounting policies, KeyBank uses the same cloud platform to track new accounting changes that may be on the horizon, to perform all the modeling and documentation necessary for comprehensive capital analysis and review and to manage certain aspects of its Sarbanes-Oxley internal control reporting, among others, says Gilbert.

Using technology to enhance the SOX compliance process

For the 2017 fiscal year, did your organization utilize technology tools in the testing of controls (for example, robotic process automation) to comply with Sarbanes-Oxley Section 404?



If “yes,” for which of the following processes do you use technology tools in the testing of controls to comply with SOX Section 404? (Multiple responses permitted)


If “no,” does your organization plan to use technology tools in the testing of controls to comply with SOX Section 404 in the future?


Source: Protiviti

Utilizing different workspaces within the platform, various work groups can have access as necessary to specific functions or projects, says Gilbert. As such, it connects hundreds of people inside the organization. “We use it for everything,” she says.

As the Public Company Accounting Oversight Board has come down especially hard on auditors for their review of management review controls, the cloud platform with its documentation features has been “a huge win,” says Gilbert. “Auditors can go in and see all the review that’s been done. It’s much easier for us to package everything together.”

Despite the potential of such applications to automate in a way that improves compliance, not all companies have embraced it as readily. A recent survey from consulting firm Protiviti says time and money spent on SOX compliance continue to rise, but corporate adoption of technology tools to automate the process is still lagging.

Only one-third of organizations, for example, are automating workflow approvals or access controls, and two-thirds are not using technology to test controls to demonstrate SOX compliance. Only 11 percent said they were using RPA, “the holy grail of having real-time, 24/7 monitoring,” says Brian Christensen, executive vice president focused on internal audit at Protiviti.

Technological tools could remove some of the “monotonous, recurring work” associated with SOX, says Christensen, while also providing visibility into larger or even complete data sets rather than samples. The encouraging side of the poll result, he says, is that companies are trying to get there. Roughly half said they are planning to deploy new technology specific to SOX in the next year.

Given the pace of change and the massive new opportunities created by technology, it can be difficult for companies to figure out where to invest their next dollar. The decision should start with an inventory of what’s already in place, both from a systems and data perspective, says Dan Sunderland, chief auditor for the audit practice at Deloitte.

If a company already has a single platform that forms the basis of its Enterprise Resource Planning process, for example, that creates a different set of opportunities and challenges compared with a company operating multiple disparate systems. “Understand how accessible and uniform the data is within the organization, so you can start to see what is feasible to work with in the short run,” says Sunderland.

The analysis can then identify intersections of complex accounting judgments and data supporting those judgements, or areas that are typically most problematic, to identify where perhaps manual steps could be replaced with automated processes, or where data could be better mined and analyzed, says Sunderland.

It’s a difficult process, in part because the business and the external environment are always changing, he says. “To enable folks to really utilize technology, you have to get down into the details,” he says. “What is truly data that I can analyze to inform my decision-making processes and not just data for data’s sake.”