Risks and benefits in the digital business environmentAlina Făniță
Companies have responded to the crisis in different ways, but all have risks and benefits. Many have had to automate how they work with customers to mitigate the risks brought on by the pandemic. Other companies have switched to digital processes to make it easier for employees to work remotely. Restrictions have led to disruptions in the supply chain and have led to adjustments in relations with suppliers.
This is why many companies now make transactions and make decisions in real time, which also requires these organizations to manage risks and seize opportunities with speed, accuracy and efficiency. Given the accelerating changes of the last two years, today’s digital age auditors must also adopt a digital mindset.
Risk: Dependence on digital systems
According to a report by the World Economic Forum, “increasing dependence on digital systems” is a growing risk in 2022. The same report says that this dependence has been “intensified by the response to COVID-19”. Digital commerce is estimated to reach a global value of $ 800 billion by 2024, and this growth will bring major operational changes and generate new types of digital risk. Digital products and services are based on a wide range of technological assets – data, software, cloud services, interfaces – that can be weakly controlled by third parties.
Companies that address these digital risks will gain a competitive advantage through better performance and stronger resilience. The question is, “How can we quickly discover these new digital risks and how can we effectively address them?” The answer is through an integrated management approach that links strategic, operational and technological risks to enable informed decisions.
Benefit: Connectivity supports digital audit
Business connectivity is becoming stronger, making data sharing between companies, customers and government agencies a standard practice. As connectivity grows, digital operational, transactional and financial data is increasingly reaching shared networks.
Auditors can connect directly to these shared networks and work directly through a secure online platform, which greatly speeds up the audit process. Customers no longer have to manually transfer massive data files and communicate via email, as all parties involved in an audit can now manage and view their data on a single shared platform or customer portal.
Risk: Coexisting technologies, old and new
Extensive research has been conducted on how risk and compliance management experts could improve their governance solutions to allow for better visibility and understanding of risks. The findings show that the focus on compliance, as well as coexisting technologies, old and new, fails to provide business leaders with the information they need to address the company’s most relevant digital risks.
Thus, it has become increasingly clear that an integrated approach that links operational and technological risks to the strategic objectives of the business is stronger. Business leaders need to explore how integrated risk management technologies can help companies move beyond old, compliance-based solutions to increase their visibility and understanding of digital risks.
Benefit: Processing large volumes of data
Although the large volume of data generated by data sharing platforms may make it more difficult to identify risks, auditors benefit from new approaches to the processing of data and information in various categories of documents. A high quality audit process can process and interpret data in meaningful and consistent ways, helping companies identify anomalies, operational, financial and non-financial risks.
Why is data analysis so important? First, the high processing speed and capabilities of data processing technologies can cover the entire data population. This comprehensive coverage provides even greater assurance on governance and compliance, and auditors are able to do more in-depth analysis to discover new perspectives and areas for business improvement. Data analysis technologies are also able to perform a “continuous audit”, allowing audit efforts to be distributed throughout the year.
Performing a digital audit involves more than just using digital tools and technologies in the audit process. A digital audit requires the adoption of a truly digital mindset. Having a digital mindset means developing new attitudes and behaviors that allow auditors – and clients – to anticipate opportunities, while becoming more adaptable and open to capitalizing on emerging technologies to enhance traditional processes.
Alina Făniță este CEO și Partener al PKF Finconta. A lucrat cu companii multinaționale sau firme antreprenoriale din domenii diverse de activitate, pentru a le oferi servicii de audit financiar, due diligence, restructurări de grupuri, audit intern și alte servicii conexe activității de control intern. Este membră a celor mai prestigioase asociații profesionale din domeniu: ACCA (Association of Chartered Certified Accountants), CECCAR (Corpul Experților Contabili și Contabililior Autorizați din România), CAFR (Camera Auditorilor Financiari) și IIA (Institute of Internal Auditors). A absolvit EMBA Asebuss la Kennesaw State University, a fost trainer pentru cursuri IFRS și este invitată ca expert la numeroase conferințe de business. firstname.lastname@example.org