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APPLICATION OF ROBOTIC PROCESS AUTOMATION IN ACCOUNTING
In the previous article, we have seen how RPA works and also the advantages RPA provides in reducing errors and giving best quality work. In this article, we will see the various fields in accounting to which RPA can be applied in order to use it more effectively and achieve the maximum advantages of it.
Enlisted below are a few areas in which RPA in Dubai can be applied:
- Reconciliation and Analytical Procedures
- RPA for Dual-Purpose Audit Tests
- RPA-Based Audits
- Process understanding
Now let’s see how RPA accentuates the above mentioned processes in detail.
- RPA in Reconciliation and Analytical Procedures
Reconciliation and use of analytical procedures is a major aspect in the audit of revenue. RPA in Dubai comes into play here by assisting auditors while logging into a client’s secure file transfer protocol (FTP) site to retrieve related audit evidence. Such evidence might even include the listings for current and prior year sales and the trial balance. Using this data, RPA can easily calculate the total sales per the listing and compare it to the total per the trial balance within fraction of seconds. If the amounts as per listing and trial balance match, RPA can subsequently compare the total revenue amount from the current and prior year. In case of difference, RPA can also generate an alert if the difference exceeds the materiality threshold.
- RPA in Dual-Purpose Audit Tests
RPA can be used for Dual-Purpose Audit Tests. This means they can be programmed to calculate whether the difference in price and quantity across sales invoices, sales orders, and shipping documents, and to generate alerts for sales transactions that contain differences in price and quantity. By automating these procedures, auditors can use their time effectively to more value-added activities, which will inherently increase audit quality. Also, with the help of RPA software, auditors can obtain a better understanding of the client’s business operations and be able to more precisely assess the risk of material misstatement.
- RPA-Based Audits
RPA is a form of process improvement using technology automation. When applied to auditing, RPA can be used to not only replace manual and mundane audit tasks, but in addition, motivate the re-engineering of audit processes. The decision process to assess whether RPA is a good fit, public accounting firms can refer to the RPA implementation roadmap suggested by K. Moffit, A.M. Rozario, and M.A. Vasarhelyi in “Robotic Process Automation for Auditing,” Journal of Emerging Technologies in Accounting, forthcoming. According to this, RPA consists of three main stages of implementation beginning with process understanding, moving on to audit data standardization (ADS), and finally the execution of automated audit tests (i.e., audit apps).
- Understanding the Audit Process Although, a large number of audit processes may be a good fit for RPA theoretically, the audit processes that would benefit the most from RPA are those that contain defined audit tasks. Defined audit tasks are those that are repetitive and time consuming and that do not require audit judgment. Public accounting firms may identify the audit processes where RPA can add value by considering expert knowledge, such as that of revenue audit leaders, and by calculating the actual hours spent performing audit tasks. Furthermore, where similar audits are being done, the most important factor to justify automation is the number of times a firm would need to perform a particular function.