Technology In Auditing

No one would argue that technology is an integral part of accounting. As technology has become more advanced, the more the profession has found ways to improve the efficiency and the accuracy of accounting. The auditing profession has also integrated technology into its operations, but not to the same degree as accounting. Software has been created that allows an audit to be performed solely on an electronic device. The exclusive use of this software to perform audits has been dubbed as performing a paperless audit. In a time where technology is being used so heavily in the accounting world, one would think paperless audits are commonplace in auditing firms. However, most auditing firms do not perform complete paperless audits and believe

As accounting becomes more automated and done more electronically, the easier it is to prepare an audit electronically. Current accounting software allows accounting records and financial statements to be sent and viewed on electronic devices. Therefore, the documents needed for an audit can be linked directly to the auditing software of the company’s auditing firm. The clients’ use of technology in accounting also creates a demand for paperless audits. In traditional paper audits, clients must print the electronic documents needed for the audit. Paperless audits reduce the amount of work and the amount of time clients spends on preparing those documents; therefore, clients want and welcome the switch to paperless audits. Auditors also are not averse to the change to paperless audits. One would think paperless audits, like the automation of accounting, result in significant changes to auditors. However, the implementation of auditing software does not change auditors’ job. Auditing software streamlines the compiling and the organization of information needed for audits. It does not change the analysis of financial information, which leaves much of the auditors’ job the same. The technology behind paperless audits is not complex because of the advancement of technology. Most auditing software is as easy to operate as Excel, and the technology is available at costs that are

An accounting firm in the ‘90s was able to do successfully what firms are hesitant to do today and that was without the advanced technology of today. Habif, Arogeti & Wynne LLP (HA&W) achieved a paperless audit and tax season during 1998. HA&W accidentally made the change to a complete paperless audit because the firm wanted to increase efficiency and save costs. In the year before the switch to a paperless audit, the firm’s employees were working eighty-hour workweeks and spending $40,000 annually on off-site storage of paper files (Phelan 2003). The firm was in definite need of change because it was wasting resources. The solution was to improve the firm’s existing technology that was only used to prepare tax returns electronically at the time. After thorough research, the company decided that eliminating paper was the best way to improve efficiency and profits. A technology committee was established to research, to oversee, and to review the implementation of the new software. The software cost HA&W $200,000 in the scanning of paper documents in addition to the cost of the software, but the lack of off-site storage and furniture for storage saved the company $200,000 annually (Phelan 20003). HA&W is one of the many firms that successfully performs only paperless