Effects of Advanced Automation on Accounting Processes
Advancement of technology continues to change the industry at a rapid pace and accounting by no means is an exception. In comparison to a human, sophisticated technologies are capable of performing human activities based on repetitive assignments more quickly and accurately.
Gradually, the accounting practices became way smarter and more advanced. The emergence of streamlined automation solutions is on the path of continuous development which has done away with inaccuracies and mistakes. The problems associated with manual data entry paved way for the birth and development of advanced automation for accounting which indeed brought an amazing revolution in the field of traditional accounting processes.
The emergence of Robotic Process Automation (RPA) is being considered globally as a Holistic Approach to safe and secured accounting automation.
RPA (Robotic Process Automation) represents a dramatic and disruptive change in audit and accounting practice that promises to allow auditors and accountants to operate at a higher level. Leslie Willcocks, a renowned professor at the London School of Economics, defines RPA as a kind of advanced software that mimics the human activity along with carrying out every single task within a process. It can do repetitive stuff more accurately and quickly, even without getting tired like humans.
For the accountants, RPA represents the opportunity to improve the quality of auditing method; indeed, RPA is already emitting its apex ability to enhance business processes and services offered by Public Accounting Firms. Although some fear that RPA might completely replace people with robots, on the other hand, it is better understood that the manpower can then be utilized in several other specializations for more production, accuracy, and perfection of the operation.
Now, let us take a look at some of the most crucial effects of Advanced Software on the Accounting Processes
Robotic Process Automation for Reconciliation and Analytical Procedures
In the process of revenue audit, RPA helps auditors by logging in to a client’s secure file transfer protocol (FTP) site to retrieve relevant audit evidence, including the listings of sales and the trial balance for both current and the previous year. Thereafter, RPA calculates the total sales listing and then compares it to the trial balance. Presuming the amounts to reconcile, RPA analyzes whether the total revenue amount from the current and previous year listings materially vary or not, and ultimately it conveys an instant alert if the differentiation surpasses the prescribed limit.
RPA for Dual-Purpose Audit
RPA can be programmed to calculate whether the price and quantity are different across sales invoices, sales orders, and shipping documents, and to generate alerts for sales transactions that contain differences in price and quantity. By getting these procedures automated, auditors can now reallocate their time to more value-added activities. This will increase audit quality inherently. By availing the benefits of RPA software, auditors ensure a better understanding of the client’s business operations and therefore are able to precisely assess the risk of material misstatement.
Three-Step Approach to advanced RPA Audits
RPA is a form of process improvement using the latest technology; when applied to audit, RPA is not only supposed to replace the old manual and mundane audit processes but also to motivate the re-structuring of the entire auditing processes. As per the proposed roadmap, implementation of RPA consists of three significant stages: (1) process understanding, (2) audit data standardization and, (3) execution of automated audit tests (i.e. audit apps).
Today almost more than 50% of small businesses are using some sort of advanced automated system. Furthermore, about 40% of these small businesses, according to a reliable survey, have automated their accounting dept. with sophisticated online accounting software. As more companies update their accounting operations, their efficiency will enhance incredibly than in any previous year. The modern technology has reformed accounting and, today, it has become easier, convenient, accurate and faster than ever.
Conclusion
Thus, we can see how advanced automation has revolutionized the entire accounting industry. And, in the coming years, a lot of beneficial advancements are on the track in this field which will definitely be a breakthrough in accounting.