Regardless of industry, organization size or geographic location, advanced technology is playing an increasing role in corporate financial reporting and external audit.
But there is a disconnect between actual and aspirational goals, according to a new Forbes Insights and KPMG survey of 261 senior financial executives.
Dealing with the Digital Revolution
While the vast majority of those surveyed agree enhancing their technological capabilities in the financial function is a priority, only 26 percent think advanced technologies will be a “must have” capability for their organization in the next one to two years.
Fifty-five percent estimate advanced technology will be a “must have” in three to five years. However, “Given the speed of technological advancements, the latter may need to reconsider their sense of urgency on this issue,” the report warns.
Three KPMG executives — Shaun Budnik, US Audit Innovation Leader, Marc T. Macaulay, US Cognitive Technology Audit Leader, and Roger O’Donnell Global Head Data and Analytics, Audit — authored the report.
As Isabel Witte, vice president and controller of Siemens Healthcare Diagnostics North America, explains, “Beyond financial reporting, technology is an enhancement for identifying market trends, process improvement and other metrics that help us run our business and serve our customers better.”
Advanced Technologies Improve Performance
Advances such as cloud-based applications, robotics, workplace automation, and cognitive technology help organizations better manage information by recognizing patterns, identifying outliers and anomalies, and performing predictive analysis.
Cognitive systems, meanwhile, use a range of highly advanced capabilities to process data, including natural language processing, artificial intelligence, machine learning, text analysis, image recognition and voice recognition.
To stay relevant, organizations and their external auditors must constantly look ahead, the report explains.
Subjective Measures of Performance
But how an organization defines “advanced” is highly subjective. “Some people may be comparing themselves to industry peers or are using current technologies in ‘advanced ways,’ but are not necessarily using ‘advanced technologies,’” Witte said.
For example, many companies are using predictive analysis (77 percent) and workflow automation (75 percent). But far fewer are using robotics (38 percent) and natural language processing (35 percent).
“As the digital revolution marches on, it presents both new challenges and opportunities for organizations and their financial reporting processes. While most organizations are sensitive to this new dynamic on some levels, some are lagging behind the pace of change,” the report concludes.
“Despite the very real challenges, disruptions and costs associated with introducing advanced technologies, many companies must accelerate their efforts, not just for regulatory and compliance reasons, but to remain nimble and competitive in today’s environment. Joining the digital revolution cannot wait until tomorrow.”
Need help with your digital transformation? Contact CMTO Chris.Spears@arke.com for more information.