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ICAEW: Technology Transforms Traditional Auditing and Improves Quality of Risk Assessment in Africa

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Technological advancements are advancing at an exponential rate in Africa and transforming traditional auditing practices. However, as the digital transformation heralds a new era of innovation, especially in improving the quality of risk assessment, a critical part of all financial statement audits, significant challenges remain. This was the consensus of business leaders at a recent pan-African online event organized by the global professional accounting body ICEAW (The Institute of Chartered Accountants in England and Wales) (www.ICAEW.com).

The online event took place on March 30, 2021 and provided an overview of a panel of business leaders who shared their knowledge and perspectives on the future of the accounting profession in a world of technology digital technologies are transforming business models, industries and the workplace.

Discussions focused on the evolution of disruptive technologies in the accounting profession, the ethical implications and the strategies needed to manage the risks associated with emerging applications of the technology. The panelists included:

  • David Matthews, President, ICAEW
  • Chemutai Murgor, CFO and CFO, East Africa, Standard Chartered Bank, Kenya
  • Catherine musakali, Founder of Dorion Associates & Corporate Governance Consultant, Kenya
  • Walter Muwandi, CEO, CCG Systems, South Africa
  • Dr Reynolds T Muza, Senior Partner, Harare Ralph Bomment Greenacre & Reynolds
  • Ede Dafinone, Deputy Managing Partner, Crowe Dafinone and ICAEW Africa Council Member

According to the panelists, automating audit processes, such as data analysis, will lead to greater consistency and provide more opportunities to identify business risks. This will allow for better planning of audit activities, especially during the current global crisis.

The panelists applauded the government’s efforts to support the development of innovation and technology by providing the required digital infrastructure. However, as many African countries embrace digital transformation, panelists agreed that the adoption of disruptive technologies has a major impact on the workforce across the continent and that care should be taken not to render many superfluous jobs.

If traditional accounting has ancient roots, the tools and techniques used by the profession have always evolved. According to speakers at the online event, accountants need to be able to adapt and grow to manage these technological changes, such as the need for increased knowledge of data analytics and cybersecurity, to stay competitive.

Ethics and professional judgment must also play a vital role in the digital age to ensure that accountants continue to build public confidence in businesses and uphold the reputation of the profession. Panelists agreed that it was possible to expand codes of ethics to recognize the role of the accountancy profession in promoting ethical principles in the development and application of technology.

Speakers also highlighted how the rapid growth of technology has automated many elements of accounting compliance, but increased complexity and risk. These elements involve ensuring that a company’s financial matters are handled in accordance with federal laws and regulations. They called for the creation and promotion of standards on how technological tools should be developed and implemented to reduce risks and ensure that benefits, such as reducing the effort required and increasing productivity, are obtained. They also indicated that audit teams need to be properly equipped with experts on different software applications and platform technologies to be able to educate clients on their security strengths.

David Matthews, President of ICAEW, said, “Technology is transforming the accounting profession. Automation technologies, in particular, will change the role of accountants. As the influence of technology in the world of work expands, accountants will need to diversify their skills, and an increased focus on advisory skills will mean that accountants will often find themselves acting as a go-between between experts. technical and customers.

Michael Armstrong, FCA and ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA), said: “In the decades to come, intelligent systems will take on more and more decision-making tasks of humans. While accountants have used technology for many years to improve productivity and deliver more value to businesses, this is an opportunity to reinvent and radically improve the quality of business and investment decisions.

“To realize this potential, our profession must imagine how new technologies can transform our approach to the fundamental business problems we want to solve. Accountants who stay on top of technological trends and who can adapt to accommodate changes will be in the best position to leverage them for future growth. “

Ede Dafinone, Deputy Managing Partner, Crowe Dafinone, said: “The rate at which technological advancements are accelerating in all industries in Africa is astonishing. And the implementation of such technologies presents a unique opportunity for economic development on the continent.

“Accountants have embraced waves of automation for many years to improve the efficiency and effectiveness of their work. However, technology has not been able to replace the need for expert knowledge and decision making. Therefore, we need to recognize the strengths and limitations of this different form of intelligence, and build an understanding of the best ways for humans and computers to work together.

Panelists advised African audit firms to invest in digital initiatives, such as AI, blockchain, cybersecurity, and data capacity development. Investing in these initiatives will equip accounting professionals with the ability to expand their insurance services to address new technological risks their clients face and protect their digital assets.

The webinar was attended by over 250 professional accountants, students and members of ICAEW, as well as members of other professional bodies across Africa including the Institute of Chartered Accountants of Nigeria (ICAN), the Zimbabwe Institute of Chartered Accountants (ICAZ), Zimbabwe Institute of Chartered Accountants (ICAZ). Accountants of Ghana (ICAG), the Institute of Certified Accountants of Kenya (ICPAK) and the Pan African Federation of Accountants (PAFA).

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