Understanding the impact of technology

in audit and finance

icaew.com/itf
UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Foreword

This paper has been produced based on comments from the breakfast briefing jointly organised by
The Institute of Chartered Accountants in England and Wales (ICAEW) and the Dubai Financial Services
Authority (DFSA), on 13 December 2017 at DFSA.

The briefing was introduced by Ian Johnston, Chief Executive, DFSA, and concluded by Michael Armstrong,
Regional Director MEASA, ICAEW. The keynote address was given by The Right Honourable the Lord Mayor
of the City of London, Alderman Charles Bowman.

ICAEW is a professional membership organisation supporting over 149,000 chartered accountants worldwide.

DFSA is the independent regulator of financial services conducted in or from the Dubai International
Financial Centre (DIFC), a purpose-built financial free-zone in Dubai, United Arab Emirates.

THE PANEL DISCUSSION WAS MODERATED BY:

Anthony Hobeika, CEO, MENA Research Partners (MRP)
Anthony has spent his career in analytics, consulting and strategy across the MENA region
and has worked in a number of positions within the banking sector and the wider financial
industry. Anthony leads MRP’s practice in tackling the region’s knowledge gap and has a
vision that embraces human capital and technology in capturing the infinite world of data.

THE FOLLOWING PANELLISTS PARTICIPATED IN THE DISCUSSION:

Marcus Freeman, CFO, Chalhoub Group

As the Chalhoub Group CFO, Marcus reports to the co-CEOs and is in charge of the finance and
accounting competence centres of the Group. He is responsible for all financial and accounting policies of
the Group, ensuring robust internal control and timely and pertinent analysis (activity, projects) as well as
the development of finance and accounting talent throughout the Group (over 200 professionals). Marcus
is also actively involved in strategy formulation, the Group Merger & Acquisition activities and internal
audit which is out-sourced. Before joining the Chalhoub Group, Marcus held senior finance roles in the
LVMH Group. Marcus qualified as an ICAEW Chartered Accountant in 1993.

Steve Drake, Partner, Middle East Leader – Risk Assurance and Capital Markets and Accounting
Advisory Services (CMAAS), PwC

Steve is an ICAEW Chartered Accountant and has worked as a capital markets specialist for more than
20 years, with the last 10 years based in the Middle East region. Since early 2017 Steve has taken an
additional leadership role running the risk assurance practice for the Middle East alongside CMAAS.
Steve has assisted companies with listing aspirations, preparing them for all aspects of their listing
needs throughout the listing process and beyond. Before joining the Middle East firm as a partner in
July 2007, Steve worked in geographical locations as diverse as Japan, South Africa, Middle East, US,
UK and Continental Europe.

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Khurram Siddiqui, Partner, Global Robotics Leader and MENA Digital Leader, Financial Accounting
Advisory Services (FAAS), EY

Khurram is responsible for developing innovative solutions around robotic process automation
(RPA), data analytics, blockchain and similar innovative technologies for the CFO and wider finance
community, globally. Over the last 15 years with EY, Khurram has also played a key role in leveraging the
power of data analytics for delivering financial audits at EY. In this role, Khurram has worked closely with
audit executives and audit methodology experts at EY. Before joining EY, Khurram worked for Arthur
Andersen, Ducont.com and Nettlink in technology consulting and hands-on IT/data strategy roles.

Hisham Farouk, CEO and Global Board Member, Grant Thornton

Hisham is the CEO of Grant Thornton in the UAE. He is a dynamic leader with a professional and academic
footprint in the US, UK and across the Middle East. With over 18 years of professional and commercial
experience he has led high profile advisory engagements for some of the largest groups and family
businesses in the region. Hisham also works closely with numerous financial institutions in the UAE, mainly
advising them on regulatory and compliance matters. He sits on various boards, mentors a number of start-
ups and works closely as a mentor with REACH and Endeavour, a global not for profit organisation which
supports multi-million dollar SMEs. He actively supports the young leaders of tomorrow through various
initiatives including working with the government sector to support emiratisation and develop UAE
nationals.

The views expressed in this briefing paper are not necessarily views shared by ICAEW or DFSA.

‘Data analytics is increasing the accessibility

of data, however human intervention is still
required to filter the data and to communicate
and advise clients effectively.’
Hisham Farouk

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Introduction

Developments in artificial intelligence (AI),

The CFO role is no longer limited to oversight
data analytics and blockchain technologies of finance and preparation of historic accounts;
are having a significant impact on audit technology now allows access to vast amounts of
and finance. data which, if analysed appropriately, can offer
an extraordinary view of the organisation,
Globally, companies, the audit profession, allowing the CFO to play a central role in the
professional bodies and regulators are increasing advancement and execution of strategy.
their focus on the impact of technology. There
are clear benefits that technology can bring
Going beyond the confines of company
from operational efficiency to financial inclusion
data allows auditors to collect and analyse
and greater insights. However, alongside these
broader industry data sets that were previously
benefits comes a range of risks, many of which
inaccessible. This enables auditors to better
are still not fully understood.
identify informational outliers, and increases their
ability to generate business insights and focus on
Technology is changing the way business is business and financial reporting risk.
conducted and data is analysed. There is an
increasing focus on data management; ‘Know
Disruptive technologies are also having a
Your Data’ (KYD) is the new buzzword replacing
profound impact on the skills required of
‘Know Your Client’ (KYC). Artificial intelligence,
auditors, finance and accounting professionals
blockchain and data analytics are game
and regulators which has implications for
changers for both the finance and accounting
educators, recruitment policies and staff
sector and the audit profession, transforming the
development needs.
roles of both finance professionals and auditors.

This briefing paper explores the diverse range

The advent of cloud computing and cloud
of opportunities, risks and challenges that
storage has opened up the possibilities of
technology brings to audit and finance functions.
collecting and analysing data on a previously
unimaginable scale. Advances in technology are
changing the day-to-day business operations and
transforming firms’ business models.

Know Your
Client

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Know Your Data

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Evolving technologies

ARTIFICIAL INTELLIGENCE (AI)

Artificial intelligence (AI) refers to machines undertaking tasks which require some
kind of ‘intelligence’, which typically refers to things such as learning, knowing,
sensing, reasoning, creating, achieving goals and generating and understanding
language. Recent progress in AI has been based on techniques such as machine
learning and deep learning, whereby algorithms learn how to do things, such as
classify objects or predict values, through statistical analysis of large amounts of
data, rather than through explicit programming.

BLOCKCHAIN
Blockchain is a foundational change in how records are created, kept and
updated. Rather than having one single owner, blockchain records are
distributed among all their users. The success of the blockchain approach is in
using a complex system of consensus and verification to ensure that, even with no
central owner and with time lags between all the users, nevertheless a single,
agreed- upon version of the truth propagates to all users as part of a permanent
record.
This creates a kind of ‘universal entry bookkeeping’, where a single entry is shared
identically and permanently with every participant.

CYBER SECURITY
Cyber security covers measures that protect networks, systems, devices and
data from attack, unauthorised access or damage. Good practices in cyber
security also cover a wider range of activities to monitor IT environments,
detect intrusions or breaches and respond to security failures. Organisations
face many challenges in building effective risk management around cyber
security, including the spread of cyber risk across all organisational activities,
the external nature of many of the threats, and the pace of change in the risk.

DATA
Data is at the heart of all economic activity, including the accountancy
profession. Recent technology-driven improvements to data capabilities
include the ability to access very large amounts of data; new sources of data,
particularly unstructured data such as text and images; and greater emphasis
on speed and real-time data. Different uses of data and associated analytics
tools highlight different aspects of these characteristics. The ability to process
large volumes of data enables analysis of entire datasets, rather than samples,
or examination of more granular data. Linking together data from different
systems, or new data from third parties, can provide fresh insights.

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Moderator guided discussion

WHAT OPPORTUNITIES DO RECENT

From a CFO perspective, Marcus Freeman
EVOLUTIONS IN DATA ANALYTICS BRING
commented that, ‘The ability of technology to
TO AUDITORS AND FINANCE FUNCTIONS?
allow the testing of entire populations shifts
Against the backdrop of recent evolutions in the perspective on the value of an audit.
technology, Steve Drake proposed we initially Data analytics allows the auditors to provide
consider the concept of ‘what is an audit now?’ both a
and ‘what will be the audit of the future?’. helicopter view of the financials and a detailed
Typically, an audit has looked at historical and complete view of the accounting records,
financial statements and provided an opinion. and as
Steve commented that ‘data analytics is doing a result more insight. There is now more pressure
more than just change the way we will do an for an audit to focus on detecting fraudulent
audit. It will change what an audit of the future transactions, as technology now exists to highlight
will look like.’ As clients adopt new technology any journal entries that are deviating from the
they will be looking to wider assurance services standard process and other anomalies.’
to mitigate risks in their business, beyond the
focus on historical information. Marcus cautioned however, that, ‘In a matter
of time all the global audit firms will be able
to offer similar technological solutions and
Technology is disrupting the audit process by
since the technology itself is not proprietary
increasing automation to drive efficiencies.
there appear to be limited barriers to entry,
Khurram Siddiqui highlighted key areas of
and so nothing stopping smaller technology
change. ‘Traditionally the audit approach was
savvy
a combined risk assessment using substantive
players entering this market to offer these same
sample testing and assessment of controls.
technological solutions. Data analytics can also
Now with technology enabling us to test the
support a CFO in maintaining the internal control
full population of entries and not only a sample,
environment. So, what is stopping corporates
we move away from asking ‘what could go
from investing in audit technologies themselves
wrong?’ to ‘what has gone wrong?’. We have
to mitigate the need for external audits? Both
more certainty and precision with regards the
these factors could see the audit being
transactions, and more transactional evidence
commoditised.’
of control weaknesses. Furthermore, aspects
of judgement are becoming digitised and
continually enhanced in the era of machine Marcus acknowledged that currently corporates
learning and artificial intelligence. Robotic leverage the audit partner relationship as a
process automation (RPA) is already being used source of valuable business advice, but this may
in audit execution, particularly for repetitive become less important as machine learning
tasks like revenue and payroll testing. This is tools provide more detailed analysis of the red
already here.’ line issues in the business and offer potential
solutions. ‘There is a real risk of disintermediation
of the audit profession. Perhaps even judgement
Hisham Farouk commented that the professional
can be commoditised.’
services firms continue to respond to increased
use of technology by their clients. This evolution
started as clients moved to using accounting From a finance department perspective, the
software and ERP solutions, and now another benefits of automation and machine learning are
phase begins, where the profession is beginning already being felt as businesses replace clerical
to connect to those client systems. ‘We are now headcount with machines. Although, Marcus
not only analysing data, because clients have commented that, ‘What is still required in the near
greater connectivity and accessibility of data, but term is better qualified accounting personnel
through machine learning the quality of the data who know how to think, can apply judgement and
we are able to extract is far better, enhancing can analyse and draw insights from data.’
both the efficiency and rigour of the audit
process.’

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

WHEN WILL ADVANCES IN TECHNOLOGY them, and in some cases the human oversight
RESULT IN A REAL STEP CHANGE IN increases with technology.
HOW BUSINESS IS DONE AND WHAT
WILL BE DIFFERENT?
The future is one where humans and machines
From the audit perspective, Hisham reflected work together. Outsourcing repetitive and
that, ‘Technology will continue to eliminate the periodic tasks to machines allows humans to focus
requirement for human clerical and vouching on problem solving, envisioning and strategising,
procedures, which will increase time efficiency areas where judgement plays a key role. So rather
and reduce headcount. However, value will than suffocating the profession, Khurram saw
continue to be sustained from understanding technology expanding and changing the types of
the client’s business model. Data analytics is services provided to clients.
increasing the accessibility of data, however
human intervention is still required to filter the
Describing what the future audit would look like,
data and to communicate and advise clients
Khurram stated that, ‘The way audit is performed
effectively. We can expect the audit being
may change significantly in the future. We are
delivered by smaller technology conversant
moving from continuous control monitoring
audit teams, who use data analytics to
(CCM) to continuous transaction monitoring
understand the business drivers, and also have
(CTM), which happens on the client site, in real-
the wider business acumen to understand both
time, with a copy created for the auditors. The
boardroom requirements and shareholders’
use of blockchain technology makes these huge
psychology, and are able to communicate the
changes possible.’
information appropriately. Machine learning
and artificial intelligence are still not at the stage
where they can replace that human input.’ Khurram also commented on another change
in audit driven by technological advances,
‘Regulators may mandate that an audit sign off
As clients use more technology they are
include further value adds. For example, the way
increasingly taking on more risk, and their
audit firms caveat their work with respect to fraud
stakeholders will require a new suite of
detection is likely to change, since technology will
assurance services to address these new risks.
allow auditors to check every single journal entry.’
So, while demand for traditional historical data-
focused audit services may decline, Steve saw
significant opportunities to develop new real- Marcus agreed that audits would add more
time and forward-looking assurance services. value to corporates if they also encompassed
a forward-looking and real-time aspect, but
questioned whether the larger professional
Khurram commented that, ‘Until recently
services firms are best placed to offer those
bitcoin had been a phenomenon, treated with
services. He raised the question, ‘Is the audit
great scepticism, however now large financial
profession as we know it best placed to mitigate
institutions are talking about how to embrace
these new corporate risks?’ He saw technology as
it and the underlying blockchain technology.
a driver levelling the playing field for small audit
Similarly, the only option for the audit profession
firms or even technology businesses to compete
is to embrace the developments in digital
as equals.
technology’. Khurram considered that ultimately
it is always humans who are the driving force
behind developments in technology. WHAT WILL BE THE IMPACT OF
TECHNOLOGY ON AUDIT TENDERING,
FEES AND COMPETITION?
Before ERP solutions were the norm, there was
a period of concern that the role of human input The evolution of technology challenges the
in accounting was being superseded, however current value proposition of the audit. Moving to
in reality with increasing complexity of systems, offshoring allowed audit firms to cut costs, and
humans continue to be required to manage now automation will enable firms to cut the time

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

required to complete an audit. Within a decade, customers through customisation of the services
an audit will be completed within a fraction of the offered alongside the audit.’
time, given access to real-time data. Audit fees
have typically been charged based on the time
WHAT ARE THE TOP CHALLENGES FACED
taken to conduct the audit, but audit firms will
BY AUDIT FIRMS AND CORPORATES AS
no longer be ‘selling time’. Hisham suggested
THEY ADAPT TO THIS NEW TECHNOLOGY
that ‘The audit profession will need a new value
DRIVEN FUTURE?
model that clients can understand. With the use
of technology, fees will be based on knowledge, Hisham suggested that change management
connecting that knowledge to strategy, will be a key challenge within the MENA region.
mitigating the specific risks of the organisation ‘How is this change management going to be
and becoming the advisory driving force for the supported within these regional economies?
organisation’s board and stakeholders.’ And more specifically, how will audit firms
themselves keep pace with the technological
advances? Traditionally the changes in audit have
Khurram argued that, ‘Clearly where traditional
been led by auditors, but the skill sets required
audit testing work moves from sample testing
are changing. Are audit firms keeping up with
to full population testing, and then from historic
the pace of change or are they reacting to the
testing to real-time testing, there will be a move
requirements of their clients? How as a
away from billing hours to billing in terms of
profession can we think ahead of our clients to
the digital assets being utilised in the form of
help them with their change?’
managed services. The USP of audit firms will be
their ability to leverage the potential of digital
and other value add components that they bring Marcus reflected on the imperative to develop
to the audit which others cannot match.’ digital talent. ‘IT and coding must be embedded
within the education system and can no longer
be seen as niche subject areas. The upcoming
For the professional services firms, the cost of
generations of digital natives are the engine
developing the technology and ensuring that
rooms driving the growth of the future,’ he said.
the technology remains at the cutting edge is
significant. Firms need to maintain this
investment by being able to pass on the cost to Khurram highlighted the need to challenge
their clients. Although clients may push for audit the audit mindset which is less open and less
fees to be squeezed as they see the audit taking transformational than the advisory mindset. He
less time, Steve felt confident about the future of commented that, ‘Technology defines the how of
audit firms, responding that, ‘A business’s change, and humans define the why of change.
profitability and sustainability is driven through Technology should not be feared. Humans
margins. As long as audit firms maintain their drive the change and can put limitations on the
margins there is still a strong financial future for extent and scope of the technology. Subject
them.’ matter expertise lies with humans, based on their
experience and knowledge. It will be the icing on
the cake with the technology sitting underneath.
In response to the charge that technology is not
The biggest challenge is to demystify what digital
proprietary information and that the audit risks
means to your business and how you can get
being commoditised, Steve responded that,
value from it.’
‘Commoditisation is a value perception. Our
global clients derive value from the consistent
high-quality service delivery and professionalism A key challenge for corporates is managing the risk
we can offer as a global audit firm. It is difficult for of data loss, and as a result there is a huge demand
smaller players to provide that level of service.’ for cyber security services. Professional services
firms need to recognise that client risks are
changing and need to continually provide evolving
Marcus suggested that, ‘In the technology
solutions and services to meet those needs.
enabled era audit firms will have the opportunity
to strengthen the relationship with their

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Questions from the audience

THE REAL VALUE OF THE AUDITOR

HOW ARE ICAEW, THE AUDIT
? IS THEIR SIGNATURE WHICH
PROVIDES AN ASSURANCE TO ? PROFESSION AND BUSINESSES
GOING TO DEVELOP THE HUMAN
USERS OF THE ACCOUNTS, AND
CAPITAL NEEDED TO DEAL WITH
ULTIMATELY CLIENTS VALUE WHAT
THE FUTURE?
THAT SIGNATURE REPRESENTS
AND ARE PREPARED TO PAY FOR Hisham commented that at audit firms, where in
IT. SO, IS THERE REALLY A RISK OF the past training was more about procedures and
DISINTERMEDIATION FOR AUDITORS? checklists now it must focus on developing the
business acumen and digital understanding of
Marcus responded that, ‘Assuming regulators
their teams. If we accept that the audit of historic
will still require an audit sign off on the accounts,
accounting information will still be required
the audit profession continues to have purpose
in the future, then there will continue to be an
and value. However, with the passing of time,
accounting technical skill set associated with that.
the regulators themselves will be from a group
For technology to be used effectively there needs
of people who are technology natives, and they
to be a blend of digital and technical skills.
may not value such signatures in the face of
other technological assurance options.’
However, professional services firms are already
adapting to the new circumstances. Firms are
WITH INCREASING USE OF

?
partnering with technology partners like MIT,
TECHNOLOGY, THERE ARE Microsoft and Google, and recruitment is
GREATER RISKS AND THEREFORE increasingly focused on technology specialists as
MORE ASSURANCES NEEDED TO audit firms migrate away from a pure audit focus,
MITIGATE THOSE RISKS. HOW DO to wider assurance services. These are various
WE DEAL WITH THIS RISK? ways of accessing and developing the technology
Khurram stated that, ‘Ultimately the technology needed to deliver value to clients and are an
a client uses will be audited by another set of essential aspect of keeping pace with the changes.
quality assurance technology. In the future,
regulators will require client technology models, All stakeholders need to equip themselves for
composed of robotics and blockchain, to be this new future by considering their specific
audited by another level of code. A script will requirements and developing their own human
come to audit a script. capital accordingly. Marcus and Khurram also
considered it crucial for the regulators to develop
‘In this period of constant change every firm is their capabilities to be in a position to effectively
trying to invest in keeping abreast of technology regulate these sectors in the face of advances
in technology.
developments. As regulation evolves the
landscape will become clearer.’

‘Crucial for the regulators to develop their

capabilities to be in a position to effectively
regulate these sectors in the face of advances
in technology.’
Marcus Freeman and Khurram Siddiqui

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Khurram stated that, ‘Regulators, auditors and ‘Large corporates are like oil tankers who work
clients all have a role to play. The new talents efficiently when the course is clearly charted.
required are all around programming, coding But what if we are not sure which direction we
and leveraging the technology that is around should be moving in? For technology to be used
us. Data security, AI development and robotics effectively there needs to be a blend of digital
will all be transformational and blockchain is just and technical skills. Perhaps a mothership, with
unavoidable – we are living on a cusp of change. smaller speed boats, each given autonomy and
Regulators are working through this upheaval, freedom of execution and headed up by teams
whilst global professional services firms are of younger executives is a better model. Some
aiming to be early adopters of this technology.’ speedboats will fail, but crucially some will
succeed, and the organisation can reinforce the
successes and follow in that direction with the
Current business leaders are overall not
mothership. This is a model to increase agility
conversant with the technology that they are
and incorporate a younger outlook,’ stated
surrounded by and initiatives are needed to
Marcus.
address this. Marcus referenced his company’s
shadow executive committee project, which
consists of business executives under the age Steve commented on the regional governance
of 30, with a one year rolling mandate, giving perspective, where he noted there is a ‘recurring
their opinions on all the issues that the theme where corporate board members tend to
executive committee discusses. This helps to be older, sitting on the board for what they have
ensure that the company perspective is achieved in the past. But are they ready for how
informed by both the older experienced they need to think and adopt technology to drive
executives and also by the technology native the organisation into the future?’ Diversity at
generation. board level is crucial for boards to stay relevant
and offer more continuity of leadership.

‘We are living on a cusp of change.’

Khurram Siddiqui

‘Data analytics is doing more than just change the

way we will do an audit. It will change what an audit
of the future will look like.’
Steve Drake

‘The upcoming generations of digital natives are

the engine rooms driving the growth of the future.’
Marcus Freeman

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

ICAEW: EQUIPPING THE FUTURE PROFESSIONAL

The world is changing and the role of chartered accountants, today and in the future, needs
to adapt to survive. To ensure that ICAEW Chartered Accountants are equipped to deal with
this changing world, we continually review and evolve the key elements of our qualifications
and the resources we use to support our students, members and the wider profession.

THE EVOLVING ACA QUALIFICATION

Rapid growth in technology has automated many compliance elements of accountancy. But
with technology also comes complexity and risk. Accountants need to adapt and develop
new skills to manage these technological changes. The ACA syllabus includes elements of
big data, data analytics and cyber security and ensures students understand the impact that
developments in these areas have on audit, finance and business. In addition, two of the
ACA modules now feature ‘Technology’ in the name of the module: Business, Technology
and Finance, and Business Strategy and Technology.

The commercial environment in which ICAEW Chartered Accountants work is changing.

There is less routine and compliance work and a greater focus on the development of skills
which equip professionals to work with the outputs of automated processes, with other
specialists, and in a changing world. These skills include analysis, interpretation, professional
scepticism, communication, collaboration, adaptability, resilience, and commerciality.
The learning and development of professional skills is embedded throughout the ACA
qualification and ACA training and tested through the Professional and Advanced Level
exams culminating in the Case Study.

BUSINESS AND FINANCE PROFESSIONAL (BFP) DESIGNATION

The professional firms are increasingly focusing their recruitment on technology specialists.
The BFP designation (launched in November 2017) supplements the skills of these recruits
with essential knowledge and practical skills in accounting, finance and business and
supports their ongoing professional development.

ICAEW ACADEMY OF PROFESSIONAL DEVELOPMENT

The Academy reflects ICAEW’s commitment to high quality professional development for
all career stages. The Academy’s approach is to blend commercial, technical and
leadership skills – to develop rounded finance professionals for the future.

FACULTIES AND COMMUNITIES

ICAEW’s specialist faculties and communities lead the way in many professional and wider
business issues by shaping policy, stimulating debate and encouraging good practice.
ICAEW faculties and communities are open to ICAEW members and non-members.

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Conclusion

Given the speed of technological and digital

In response to this audit firms are both recruiting
advances, it is imperative that those in the audit
and partnering with a variety of technology
and finance profession invest in understanding
experts. Audit firms need to invest in digital
and developing these technologies to benefit
initiatives, including AI, blockchain, cyber security
their respective sectors. This is a huge
and developments in data capabilities. These
challenge, particularly in audit, where the pace
initiatives across multiple technologies will equip
of technological change, specifically the move
them to expand their assurance services to deal
from sample testing to 100% populations testing,
with the new technology driven risks that their
and from historic testing to real-time testing,
clients face and safeguard their digital assets.
is spearheading the need to revisit the audit
approach in an unprecedented manner.
Advances in technology open up a debate on
the skill sets that are relevant to the industry
Technology will drive down the time taken to
now and in the future. While it is clear that lower
conduct an audit, as testing becomes more
level accounting and auditing skills can be
automated and conducted on a real-time basis.
replaced easily by technology, human business
Views were expressed around the need to
acumen and communication skills remain
develop new methods for calculating audit fees
crucial. The required combination rests in a
based on the technological resources used in the
blend of human capital resources, incorporating
process and the value added by audit teams who
specialist
derive insight from the data. There will be
technology and digital skills, technical accounting
opportunities for the firms to develop more
and audit skills and professional skills such as
forward-looking assurance services, helping clients
communication, leadership and commerciality.
to manage risk and drive growth. Technological
advances which could lead to the
commoditisation of the audit, and even the While we are clearly on the cusp of a
disintermediation of audit firms changing professional landscape, it remains
by other technology players, were considered unclear exactly where the digital revolution is
potential threats of which audit firms need to heading and regulators are grappling with
remain vigilant. how best
to regulate these markets. In the interim the
professional membership bodies, professional
Technology is directing changes in the way
services firms and corporates need to engage
clients run their businesses, changing their
with technological developments and respond to
business models and processes. Auditors need
the benefits, risks and opportunities they bring.
to stay ahead of these changes in order to
provide relevant advice and support services.

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UNDERSTANDING THE IMPACT OF TECHNOLOGY IN AUDIT AND FINANCE

Further reading

Artificial Intelligence and the future of accountancy

Blockchain and the future of accountancy

Audit insights cyber security

Big data and analytics: what’s new?

Data analytics for external auditors

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Prepared by: Faiza Khan, FCA

15
The Dubai Financial Services Authority
(DFSA) is the independent regulator of
financial services conducted in or from the
Dubai International Financial Centre (DIFC),
a purpose-built financial free-zone in Dubai,
United Arab Emirates.

The DFSA’s regulatory mandate includes asset

management, banking and credit services,
securities, collective investment funds, custody
and trust services, commodities futures trading,
Islamic finance, insurance, an international
equities exchange and an international
commodities derivatives exchange together
with credit rating agencies, registered auditors
(RAs) and designated non-financial businesses
and professions.

In addition to regulating financial and

ancillary services, the DFSA is responsible
for supervising and enforcing Anti-Money
Laundering and Counter Terrorist Financing
requirements applicable in the DIFC. The
DFSA also exercises delegated enforcement
powers under the DIFC Companies Law. These
include powers to investigate the affairs of DIFC
companies and partnerships where a material
breach of DIFC Companies Law is suspected
and to pursue enforcement remedies available
to the Registrar of Companies.

With respect to RAs, the DFSA is responsible

for the registration, oversight and suspension
or removal of RAs and Audit Principals in the
DIFC in respect to their audit of publicly listed
companies, authorised firms, authorised market
institutions and domestic funds.
There are over 1.7m chartered accountants
around the world − talented, ethical and
committed professionals who use their
expertise to ensure we have a successful and
sustainable future.

Over 149,000 of these are ICAEW Chartered

Accountants. We train, develop and support
each one of them so that they have the
knowledge and values to help build local
and global economies that are sustainable,
accountable and fair.

We’ve been at the heart of the accountancy

profession since we were founded in 1880
to ensure trust in business. We share our
knowledge and insight with governments,
regulators and business leaders worldwide as
we believe accountancy is a force for positive
economic change across the world.

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