Integrated audits bring new processes and benefits to traditional audit, AKA Africa's Patricia Stock
Can auditors still add value? AKA Africa will be answering this question at the Finance Indaba Africa.
Corruption is one of the – if not the biggest – challenges facing the South African business environment at the moment. While every organisation hopes that its employees will collectively be honest and ethical, it would be risky to assume that this is always the case. Instead, companies should have in place processes including the technology to support them in detecting fraud, and in fact, in preventing it before it occurs.
“One of the ways to address this in the assurance engagements is through an integrated audit that involves not only fraud specialists, but also IT specialists to ensure that the audit processes are proactive rather than reactive when addressing risk of fraud,” says Patricia Stock, CEO of AKA Africa. “It is possible to carry out an audit in such a way that fraud risk indicators are increasingly identified.”
AKA Africa’s integrated audit methodology does not just focus on the numbers since it incorporates forensic, IT, regulatory auditors and other experts as one team. “We don’t just focus on the numbers since have adopted an approach that enables us to identify systematic and cyber fraud risks areas with a diverse skilled team.”
In the area of procurement, for example, AKA will carry out procedures to pick up the extent of a possible conflict of interest that related parties and employees might have. “For example, we look at a wide scope of companies interest and do a social media audits to see if there is anything that will point to conflicting interests.”
One of the first things that they will identify are business processes that open the organisation up to fraud. They then go on to have a fraud specialist look at unusual transactions that the entity may have entered into. “We look at whether there’s been a breakdown of controls or whether there’s a lack of controls that might expose the organisation to the abuse of their resources through fraudulent activities.”
There’s also a great deal of concern about cyber security attacks. With integrated audit, with audit, IT and forensic auditors working in tandem, Patricia says those risk areas are covered as well. “We find that in the drive towards digital transformation and the automation of processes, many organisations are not considering how the technological advancement might open them up to cyber-crime.”
She says that AKA Africa is taking lessons from the audit scandals that have been encountered globally and have modified their ways of doing things to prevent experiencing the same.
Can auditors still add value? This is one of the topics that AKA Africa audit partner Ilana de Klerk will be addressing at the Finance Indaba Africa on the 17 October.
“More and more through our engagements with clients, we are realising that they want auditors to describe the value that they bring to the table. We have staff members that specialise in different areas, and we’ve intentionally structured our teams so that they can work in different types of services with the objective of ensuring that when they get to the audit engagement themselves, they are able to offer value creation services,” says Patricia.