5 steps to lowering financial auditing costs (Part 1) – Acting as a maturity model for your organization
This is part one of a blog series about lowering financial auditing costs.
A 2021 study by Gartner revealed that 62% of companies polled expect their external audit fees to increase this year. Luckily, focusing on audit control automation can significantly lower the resource needs for audits. Today, many organizations still use manual auditing procedures, the most cost-demanding and insufficient approach for medium or large-scale enterprises as financial reporting processes have become more complex and require higher external auditor costs.
These costs incurred to the companies are mandatory and regulated either by compliance laws or the organization’s foundational procedures. Naturally, these requirements come at a price. To combat this, part 1 of this blog series reveals the first two steps that are essential for organizations to reduce the audit complexity implemented acting as a maturity model.
Step 1: Organize your existing data and processes
Your business has lots of structured and unstructured data to audit in various systems that impact customers, your business’s financial accuracy, and overall information governance posture. But these structured and unstructured data sources can have errors, and timely resolution of these errors at scale is not easy. As you have brought together various data, systems and processes, you have likely provided some form of automation and people processes to compensate for business errors such as clerical mistakes. But the scope of the problem is too big to rely on manual efforts or periodic batch processing. All of this impacts your business with increasing costs and dissatisfied customers, mistaken financial reporting, failed compliance, and even business fraud. This contributes to the vast cost increases as noted by Gartner.
To reduce costs – or avoid an increase at all – it is recommended taking a careful inventory of the key systems, processes and people in your financial management lifecycle. Prioritize the pressure points that can best improve auditing automation processes, ensuring stakeholders agree on these priorities.
Step 2: Economize the most impactful opportunities
In the economize step, you want to provide initial implementation of the priorities noted from the organize phase. Often, this means implementing tools to continuously monitor your information landscape to discover, verify, validate and auto-recover from data inconsistencies. You want this solution to offer near real-time visibility so data quality, reconciliation and content analysis can scale to current and future business demands. Further, the solution should provide user experiences tailored to financial management and compliance use cases so human operators can efficiently make judgments and confidently move on. Lastly, you want the solution to provide an audit of all activities to answer future customer, executive or regulator questions as to what happened when, and why.
To help you economize, there are tools out there that are purposely built for such use cases that can also solve complex and data intensive procedures. A key point in this phase is to focus on automation that addresses the top concerns identified in the organize step.
Rocket’s Audit & Analytics Services can streamline auditing
Financial auditing is essential but may seem arduous for organizations amid manual or unstandardized processes. Rocket’s Audit & Analytics Software can offer a path to organize and economize auditing.
With swift deployment process, you will have full quick access to a solution that can strengthen auditing with automated audit and business rules. To discover more about Audit & Analytics capabilities and benefits you could achieve, download this brochure.
Tune in for part two of this series, where we will dive into rest of the steps to cut down costs and continually improve financial auditing.