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International collaboration examines a 21st century auditing philosophy

The College of Accounting Sciences (CAS), in collaboration with professionals and academics from Turkey, hosted a public lecture entitled "A response to digital risks in the public sector". The imperative to host such an event arose from a need to bring together experts from around the world, to share their experience and knowledge of continuous auditing in the public sectors of Turkey and South Africa respectively. The virtual lecture took place via the Zoom platform on 28 May 2021.

Prof Cameron Modisane, from the Department of Auditing, served as a panel member. This is what he had to say about the event:

Prof Cameron Modisane

What was the primary focus of this event/public lecture?

Continuous auditing and continuous monitoring (CA/CM) are perceived as a vision, rather than an actual technological tool, and in that sense CA/CM is in its infancy across the world. This public lecture, which sought to determine possible responses to digital risks in the public sector, was discussed from the internal audit perspective.

Has there been a significant change in the "traditional" audit approach since the beginning of the 21st century?

It is a fact that audit services, in the sense understood today, have shown significant developments since the start of the 21st  century.

In effect, the traditional audit approach is no longer sufficient, and special attention is paid to risk-based auditing activities. After the global financial crisis that emerged in 2008, the entire infrastructure of audit, internal control and risk management systems began to be questioned. The most distinctive feature of this crisis is that it has had an impact on all nations, starting with developed countries with high corporate maturity levels. The priorities of supervisory authorities have therefore changed, and they have started to implement a series of standards and regulations for the effective supervision and protection of all institutions. Compliance with regulations in the public sector has become the top priority of all government institutions and organisations, and all entities affiliated to them. As a result, the tendency to implement information technology (IT) in the public sector has increased rapidly. The need for more flexible and agile audit approaches, based on data analytics and remote audit techniques, has started to increase with the help of digital transformation in the public sector.

How would you describe the technical skills of today’s auditing teams?

Today, the technical skills of the audit team are much more advanced, and increased business intelligence capabilities for analysing data have improved audit tools and techniques. The major themes of this transformation can be summarised as follows: better audit quality, smarter audit approaches through data analytics, improved audit reporting, an increased level of integrity and enhanced internal control infrastructure. Hence, internal auditors, beyond their traditional roles, have simply become trusted data analysers.

How different is the agile auditing philosophy?

By applying an agile method, the productivity and added value of the internal audit function (IAF) can be improved and related costs reduced. The agile auditing approach leads to continuous coordination with auditees, based on providing timely data analyses and executive reports, which are prepared by relying on CA/CM tools and techniques. In this way, auditors will be more flexible, given the mindset and method that IAF employs to focus on the needs of stakeholders. Many information technologies and Information Systems (IS) techniques have to be incorporated into the auditing process, to deal with complexities resulting from the volume of data, the need for rapid decision making, the number of stakeholders involved, as well as visibility and accountability needs. Some of these techniques and technologies include big data and data analytics, cloud technologies, social media, mobile technologies, artificial intelligence and machine learning. These are all becoming essential parts of the auditing function, and they should be incorporated into the auditing process, for better performance.

What is the relationship between Unisa (CAS) and Turkey, and the partners who participated in the programme?

Academics from Unisa in South Africa, Izmir Bakircay University in Turkey, and the Turkey Association for Public Sector Internal Auditors, met in Paris, France, in 2019, at an internal audit conference. The delegation from Turkey had developed a continuous auditing software application for their Department of Agriculture, which they wished to market internationally. We subsequently agreed on a collaborative project to enhance continuous auditing in the public sectors of both Turkey and South Africa. The CAPIA (Continuous Auditing for Public Sector Internal Auditing) project was established at Unisa, to host three doctoral students and three senior academics acting as supervisors. The work of the doctoral students will also be reviewed by academics from Turkey. In 2020, National Research Fund (NRF) funding was obtained to host a delegation from Turkey in South Africa, to work on a project proposal (and the software application) to be presented to the National Treasury, which was also considering funding the CAPIA project. The visit was, sadly, derailed by the lockdown restrictions which were imposed. Instead, it was decided to keep relations going, and to host an online public lecture on a suitable topic. The idea is still to draft a project proposal that will incorporate the doctoral students’ work and present it to the National Treasury for endorsement and (financial) support, in collaboration with Turkey, for the mutual benefit of both countries.

Are any future public lectures in the pipeline?

The event was a success; we had good attendance from both South Africa and Turkey, as well as from North America, Africa and Europe. Many attendees commented on how informative the presentations were, and are looking forward to further global events of this nature. We are certainly planning to present more such events in the future, to expand on the research currently being done on the subject.

The public lecture was hosted via Zoom meetings, with attendees sharing their knowledge and experiences though presentations and panel discussions. Prof Lourens Erasmus (CAS: Department of Financial Governance) also served as a panel member.

* Submitted by Ntsako Mdhluli, Communications and Marketing Specialist, College of Accounting Sciences

** Teaser image: Audit by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Publish date: 2021-06-14 00:00:00.0