After the Crisis: Enhancing Our Audit Approach to Build Trust

We have a crisis of confidence in audits in Ghana. That audits matter hit home when some banks failed, and the Bank of Ghana stepped in to rescue the weak banks. The public asked, “where were the auditors”? “Can we trust our auditors”?

We are acting to make sure you can count on our audits. By enhancing our audit approach, we:

  • Boost confidence in our audits
  • Address the complexity of audits
  • Respond to changes in International Standards of Audits.

Complexity of Audits

The economic, technology and regulatory environment is changing. So, audits are more difficult and the risk of giving a wrong opinion is high.

They created current audit methods and tools in the 20thcentury. They are not adequate in today’s business environment.

Global Audit Standards

[1]IFAC is the global body that sets audit and assurance standards. It is updating global audit standards.

It issued an exposure draft, [2]ISA 315 Revised: Identifying and assessing the risk of material misstatement, in July 2018. ISA 315:

  • Promotes a deeper understanding of an entity’s business mode, and risks from applying the financial reporting framework in circumstances of the entity and its environment.
  • Recognizes auditors may use automated tools and techniques to assess risk.
  • Enhances the auditor’s understanding of the entity’s use of information technology (IT) relevant to financial reporting.

Changing our audit approach

Our audit approach must change because:

  • Many businesses use IT.
  • Of proposed changes to audit standards.
  • It makes work efficient.

Giving you a better audit service

This is what we’ve done to give you a better audit service.

  • Investments in training – we’ve enhanced training to include training on data analytical tools.
  • Champions–we cover a wide knowledge base, so we appointed champions to gain a deep knowledge of subjects relevant to our work.
  • Data analytical tools–we now use CaseWare IDEA and MindBridge Ai Auditor on our audits. With these tools we run sophisticated tests to determine patterns, outliers and more.

Data at the Core of Our Audit

We are putting data at the center of our audits. The ability to capture, analyze, and create insights from data is a must have skill for auditing firms. New tech tools enable us to analyze large volumes of data.

As a South African participant at a Grant Thornton/ACCA roundtable discussion on thechanging world of auditof the future puts it, “Not using technology is almost like defaulting on the quality of the audit”[3].

At SCG, advanced technology comes standard with our service, and this allows us to be efficient and collaborate with our clients.

We can run sophisticated tests on the accounting database using data analytical tools. As an example of a journal entry test, we can:

  • Test 100% of journal entries posted.
  • Detect journal entries that do not balance
  • Find gaps in journal entry numbers
  • Unearth journals with an unusual description
  • Identify journals posted at the weekend and more

Data analytics helps us to assess risks better and focus our test to tackle the risks we find. We can be precise and efficient. We also use other audit software to manage our audit approach and working papers.

Value from Your Perspective

What does this mean for you? The changes:

  • Give us better insights into riskso deliver an audit you can trust.
  • Improve our recommendations on risk,internal control and business insight we get from analyzing
  • Deliver an efficient audit.

Audit analytics makes risk assessment and response precise. We can to tell you things you don’t know about your business. To find out how, contact us at in**@sc*.gh or visit our website.

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[1]IFAC – International Federation of Accountants.

[2]IAASB, Proposed International Standards on Auditing 315 (Revised) and Proposed Consequential Amendments to Other ISAs

[3]ACCA, The Future of Audit, March 2016