January 24, 2023

What CPA Firms Need To Know About Audit Tools

Audit Tools Are on the Rise: What You Need To Know

As technology continues to permeate all aspects of business, the accounting industry has been open to its advances. The increased use of audit tools in financial reporting significantly impacts firms' preparation for audit-related tasks.

Audit tools are an increasingly popular way for accountants to lessen accounting work. The audit process is so complicated that technology is used to simplify the process, and that's exactly what audit tools do. These tools are designed to help firms with one or more aspects of their jobs, such as organizing data, automating certain processes, or even taking the place of human workers who might otherwise be responsible for manual tasks.

This blog will examine the current trends for audit tools, the different types of audit tools, the top tools in the market today, and other factors in choosing the right audit tools for CPA firms.

Current Market Trends for Audit Tools

Audit tools have been around for decades, but there has been a recent resurgence in popularity thanks to new developments that have made them easier and more efficient than ever before. For example, cloud-based solutions have dramatically lowered the barrier to entry for this technology by allowing users to access it from anywhere with an internet connection—no need for special hardware or in-house IT teams. Another major innovation has been browser-based solutions, which make it possible for any user with a web browser to perform audits and upload reports without additional downloads or technical know-how.

According to a recent article published by the Association of International Certified Professional Accountants (AICPA), more audit tools are being used by CPAs and their firms than ever before. The article was based on a survey conducted with more than 100 companies. Of those surveyed, 88% indicated that their organizations are using one or more audit tools. This increase of 9% since 2011 is significant because it demonstrates that audit tools are not only here to stay, but they're becoming more prevalent in the auditing process.

To understand the implications of this growing trend, CPA firms must first understand why these tools are being used more frequently. The main reason is that today's technology has made it possible for auditors to develop software applications that can be deployed into client environments to capture electronic data from systems. 

The rise in audit tool usage is not limited to large companies. The usage of audit tools is also increasing across small- and medium-sized companies and publicly traded companies with a market capitalization under $1 billion. Third-party vendors started creating audit tools that were easier to access and less expensive than those offered by professional services firms.

Types of Audit Tools

Accountants often rely on several tools to ensure that their processes are above board and keeping up with current best practices. These tools come in a variety of forms and serve very specific functions, but the most common types of audit tools include the following:

  1. Network Security Audit Tools: An important step in any audit is verifying that an accounting firm's network and data security systems are up-to-date and fully functional. Network security audit tools are one of the essential tools available. Audit tools like these also give a firm's clients peace of mind since they can ensure that their personal information is protected.
  2. Cloud Security Audit Tools: Accounting firms also have to rely on cloud-based software to manage client and internal data efficiently, so cloud security audit tools are another important type of audit tool and support system. Cloud security audit tools allow firms to ensure they are always accessing the most recent version of their databases, making it easier to draw accurate conclusions from their data and helping them avoid costly errors.
  3. Information Security Audit Tools: Information security audit tools help accountants and firms ensure that all sensitive data is properly encrypted, guaranteeing that unauthorized individuals can't access it. These data encryption audit tools also ensure that a company's technology infrastructure is up to date to handle the latest financial technology, such as online banking apps.
  4. Information Technology (IT) Audit Tools: IT audit tools are the weapons of choice when gathering data on an organization's IT systems, such as servers and computers. The information gathered through these tools helps determine whether a company's information technology infrastructure is secure and properly configured and whether employees are following compliance policies.

How To Choose the Right Audit Tool for CPA Firms

The choice of audit tool is a significant decision for CPA firms, as it can affect everything from time and cost efficiency to the firm's culture. The audit process is highly regulated and requires a deep understanding of a business's internal systems and processes. 

Here are some guidelines for choosing the best audit tool available in the market:

  1. Identify the current state of the firm's audit process. This area requires a look at the existing processes and procedures; what works well and what areas need improvement?
  2. Define the goals and objectives of the firm. The right audit tool should support these goals and objectives while meeting the firm's other operational needs, such as improved efficiency, increased reporting/audit work quality, etc.
  3. Pay close attention to usability and ease of use in an audit tool. While identifying audit tools that are easy to use and save time, it is just as crucial that they support thoroughness and accuracy without sacrificing either.
  4. Ensure seamless integration with other systems and processes. Confirm that any new or updated tools integrate seamlessly with existing systems so the firm benefits from less redundant data entry and increased efficiency through fewer manual audits.
  5. Watch out for implementation costs and pricing models. Some tools are better than others regarding long-term costs and price per user. It is best to analyze all options available before deciding.
  6. Consider how to train users, implement, and support the team. Some tools require more training than others, but the best audit software packages will be intuitive and accessible even for unfamiliar users. A software solution with a steep learning curve will hurt productivity as users become familiar with it.
  7. Get a demo of software options. Nothing beats seeing a potential audit tool in action before purchasing it! An audit tool demo should allow firms to experience its ease of use, explore its many functions, and test its reporting capabilities.
  8. Set up a pilot project to test engagement and fit. Setting up an actual engagement instead of just trying sample data will give a better picture of how well it works in practice. It also tests out its compatibility with other programs.

The eight tips above provide excellent guidance for choosing the right audit tool that will tailor to each CPA firm's unique needs. Uptake of new tools like these is essential in helping firms maximize their potential in an ever-evolving industry.

How Can Cetrom Help CPA Firms Obtain Reliable Audit Tools?

With the complexity of accounting services, it is essential to have auditing tools to help run the firm. One of the leading providers of cloud-based IT solutions, Cetrom has a long history of hosting accounting software and auditing tools for CPA firms. Whether you need to track your clients, manage your books, or prepare for an audit, we understand your needs and can provide flexible solutions that can grow with your firm.

Cetrom's robust cloud hosting solution allows you to have 24/7 access to all your audit and accounting data from anywhere, on any device. With the help of our cloud hosting services, CPAs can save hours of valuable time that they would otherwise spend on maintaining and updating their servers. That means more time spent on audits—and less time feeling frustrated by out-of-date software.

With Cetrom, all that and more is possible. We offer advanced audit tools and other features that can help you to meet the exacting standards required by today's financial firms—and we work with a variety of reputable vendors so that you always have access to the most up-to-date technology. 

Contact Cetrom today to learn more!

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