The Never-Ending Audit

Can software prevent future Enrons?

NexGen also lets a project manager bring in subject-matter experts from around the world on an as-needed basis, explains Frank Gori, E&Y’s global director of assurance services. “Anyone with user access and a password can engage in the review or creation of work papers in real time,” he says. NexGen also provides online-collaboration software that lets professionals working on an audit project conduct virtual meetings over the Internet.

After some 18 months in development and testing, NexGen is being rolled out to E&Y’s Business Risk Services Group and selected clients. It augments, but probably won’t replace, the firm’s standard desktop auditing tool, called EY/AWS 1.5 (AWS stands for Auditor’s Work Station); small clients — those without multinational operations — simply don’t need the benefits NexGen offers. “For a small client with, say, $20 million in revenue, using a tool like NexGen is like bringing a howitzer to the table,” says Gori.

Similarly, Deloitte & Touche uses two Web-based audit systems. The first, known as ACL Web, is based on a commercial application from ACL Services Ltd., though it has been customized for Deloitte’s auditors. ACL Web addresses a key barrier to automated auditing: incompatible data formats. To help Deloitte auditors get a client’s data into a single format, ACL Web acts as a kind of self-help kiosk, providing lists of questions and terminology so auditors can work with a client’s IT department. The Web-based tool also provides preprogrammed tests that auditors can apply to the data, rather than have to create new tools on the fly, explains John Fogarty, Deloitte’s director of audit methodology, policy, and procedures.

Deloitte’s second Web-based system is somewhat experimental. Developed with software vendor Intacct Corp., it takes the entire automated-audit process one step further by actually embedding the audit system into the accounting system. Among other benefits, this eliminates the need to reformat financial data before it can be audited. Although the current product is suitable only for small and midsize accounting firms, that could change, says Fogarty: “We developed it as something we might use in our own practice.” Nothing blue-sky about that.


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