Engine B’s approach to audit tech
In the previous two blogs in this series, Engine B’s Franki Hackett explores the reasons why audit needs to modernise, and why Common Data Models (CDMs) and Knowledge Graphs (KGs) are such powerful tools for audit. In her latest article, Franki digs deeper into Engine B’s approach to audit tech and examines why Engine B’s tools are different from any other offering in the market.
Purpose driven audit tech
Engine B is a purpose driven company which means we exist to solve the problems in the market that are plaguing the profession. This month we’ve seen news of yet another investigation into yet another high profile audit failure. In this case, it’s an entity where profits were serially misstated, and cash was being appropriated. It serves as another example of the same story we’ve heard time and time again.
What we don’t hear though is how hard it is to do a high-quality audit that delivers the assurance shareholders, markets and regulators want. Managing the volumes of evidence and digging through it to identify and address risks, is harder now than ever before. Audit firms of all sizes face obstacles which feel almost insurmountable in modern audits, and the individual attempts of each firm have not been successful in overcoming them. That’s because individual firm efforts can’t be successful in solving structural market issues.
And that’s where Engine B’s comes in.
Design based on experience
Engine B was designed to solve these problems across the audit market. We know from first-hand experience what the pain points are in audit, and why quality is so hard to deliver. We know that audit quality won’t be possible until every auditor has fast, easy, reliable access to client data in a useable format. If you have to spend 60% of your audit time preparing and matching up data to other evidence, you can’t possibly focus on significant judgements. And if you don’t have data until late in the audit cycle, you can’t get a well-evidenced view of the risks.
Audit tech tackling pain points
Our Audit CDM and Knowledge Graph are specifically designed to reduce or eliminate the most painful points in an audit in a way which opens up the market to competition. Engine B is focused on providing a consistent form of data to enable tech firms to develop a broad variety of tools and audit firms to buy or build the solutions which work best for them and their clients – even if they don’t have enormous technology budgets.
Our aim is to free firms from the difficulties of delivering high quality audits and reignite competition in the market. Data is crucial to information and information is central to evidence. It’s only by creating a level playing field of access to data that firms can demonstrate their value to potential clients and derive the assurance that everyone in the market wants and needs from audit evidence.
Working for all audit firms, regardless of size
Our commitment to making the audit market better is built into Engine B, and as required by the Competition and Markets Authority, we consider every audit firm, from the Big Four to the very smallest firms, when building our tools.
Our Audit Common Data Model is open-sourced as we believe that some things are too valuable to be proprietary and need to belong to the profession as a whole. It’s why, if you work with us, you’ll see our commitment to audit quality and audit understanding built-in from the beginning. And why we have worked collaboratively with auditors in the designing of each of our tools. We develop tools in collaboration with customers to make sure we’re meeting your needs, and we bring our own internal expertise, to make sure we’re speaking your language.
We’re also committed to driving the profession forward, which is why we invest in cutting-edge research into technologies which are currently only theoretical, in the hope that we can accelerate their journey into the hands of auditors on live engagements.
The uniqueness of Engine B’s audit tech
When designing our Going Concern tools, we went back to basics to consider how this tool will make audit easier and opinions safer, rather than solely thinking about what the auditor is trying to achieve.
Currently, Engine B is building a complete ISA 315 workflow, which enables auditors to identify the relevant risks in their audit on the basis of internal and external data and benchmarking against other companies. The evidence about the entity, its controls and its environment are presented in a logical sequence, enabling auditors to see the impact on the statements and the assertions. For the very first time, auditors will receive a holistic assessment of the company’s liquidity, solvency, governance, and risks. We’ve linked together numbers and text from a wide variety of sources and synthesised them in the Knowledge Graph, so the auditor can understand the relationships between different evidence areas.
Deploying Engine B’s Integration Engine to extract data into the CDM, and then the Going Concern tool on top would mean the auditor can go straight into audit planning with client data for the year-to-date, ready to compare to a variety of structured and unstructured external data. This means auditors can plan their audit armed with the best possible evidence of potential risks, and identify any potential going concern problems quickly and effectively.
The possibilities are endless
Technology alone isn’t going to fix all of the problems with audit. There are difficulties around training, staffing, organisational structure, culture and client readiness which need to be overcome. But what Engine B can do is remove the pain of getting the most basic and precious resource of audit ready, by preparing the data. This will rebalance some of the problems in the market that have led to stagnating quality scores and loss of trust. If audit firms have equal access to data in a useable format and a choice of tools for analysis, there’s no end to the innovation, efficiency, and quality that’s possible. The rest is up to you.