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The business world is on a constant treadmill. Navigating the ever-changing economies, political and regulatory landscapes, emerging technologies and more makes keeping audits efficient and compliant a challenge for both businesses and their accounting firms. Traditional audits take up a lot of time and resources, which just isn't sustainable in today's fast-paced market.
In this three-part series, we'll delve into the limitations of these outdated methods and explore the game-changing benefits of transitioning to digital audits.
It’s time to assess today’s audits.
Over half of US businesses (52%) find audits stressful, according to Inflo’s 2024 research study.
The main culprit is the disruption that audits cause to everyday business and the extensive preparation time, as reported by two-thirds of respondents (62%), and how manual the entire process is (61%). For more than three-quarters of companies (78%), this resource cost causes ongoing anxiety across the finance team.
In summary: Stressful audits, strained teams
Businesses that haven't embraced digital audits are feeling the pressure. Non-digital users report that audits take staff away from other tasks more than those who have adopted modern solutions (71% vs 50%). Furthermore, nearly a third of organizations (31%) say traditional audits are slow and cumbersome.
The pressure is so high that almost a quarter of US companies (23%) see lower productivity because of manual audits. This puts extra strain on talent retention efforts in an already challenging time.
“It’s no secret that a major talent shortage grips everyone within the audit industry, both across accounting firms and within business finance teams themselves. Traditional audit solutions no longer stand up against the efficiency needs of today’s organizations, meaning audits have become a time-consuming burden for both firm and client.” – Robert Lemmon, Digital Audit Partner, Inflo.
Over a quarter of finance staff (26%) feel burnt out by audits, and 19% have considered quitting because of the experience. This is especially true for junior staff who get stuck with all the time-consuming manual work. Those companies who can't keep good talent could lose out on new ideas and innovation that would help drive the business forward – it’s that serious.
Unfortunately, the concerns continue. Almost three-quarters (72%) of businesses worry their competitors are getting ahead by using modern, data-driven audits. The thought – and reality – of falling behind in the market is driving organizations to call into question the effectiveness of their current processes. This fear makes them question traditional ways, and over half (55%) are interested in an audit solution that can grow with their business.
There is an urgency to act. US businesses are ambitious, with a growing appetite to drive efficiencies and derive the most value out of their investments – all while staying ahead in the market. Audit methodologies will therefore need modernizing to keep up.
While many US accounting firms are fast followers – they wait for others to ‘go first’ - the subsequent delay is having a knock-on effect on the services their clients receive, as well as the recruitment and retention of talent in accounting which is reaching a critical point. So ‘waiting’ is no longer an option.
Accounting firms want to be trusted advisors for their clients, not just number crunchers. That means listening to their calls for better audits and delivering value by providing financial insights and a deeper understanding of their business. Digital audits are the key to achieving these goals.
Stay tuned for Part 2 to discover the steps towards digital audits!
While you’re here, check out the full research report, ‘What Modern US Businesses Want From their Audits'.