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IFAC Council MeetingNovember 13-14, 2019Vancouver, Canada
Global. Influential. Trusted.
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Technology Panel 2MindBridge AI, Inflo
Manning Elliott, BHP LLPPractical Insights on Technology
Implementation
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Objective - Learning practical insights• On the capabilities of audit data analytics software• About their effective implementation• To help you further support your SMPs/SMEs
Hear from• Audit software firms MindBridge AI and Inflo• Mindbridge AI & Inflo clients – Manning Elliott & BHP LLP
Practical Insights on Technology ImplementationLisa Padmore
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Use the panel’s expertise and experience to better understand:• The capabilities of some of today’s audit technology• The SMP experience• Where to possibly best focus your efforts and resources to best
support your SMPs/SMEs• What else further can IFAC do to support you
Practical Insights on Technology ImplementationLisa Padmore
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Introducing your panel
– James Moffat, Director, Mindbridge AI– Imran Hasan Siddiqui, Manager, Manning Elliott– Mark Edmondson, CEO & President, Inflo– Ellie Dignam, Data Analytics Manager, BHP LLP
Save up your questions – we’re using www.slido.com
Practical Insights on Technology ImplementationLisa Padmore
Delivering intelligence in data
© Copyright 2019, MindBridge Analytics Inc.
QUALITY & CLIENT VALUE
EFFICIENCY
AUDITORS
THE AUDITORS DILEMMA
How AI is transformingaudit & accounting
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Current practices are ineffective in detecting errors
Outdated CAAT tools
Sampling practices
Subjective audit opinions
Limited human capacity Big data
Limited coverage of financial audits
Undetected errors
40% 3%
Fraud caught by mistakes and tips
Fraud caught by analytics
Months to detect fraud
Surge in fraud incidents the last 10 years
16 80%
Current tools and methodologies are ineffective
Source: Association of Certified Fraud Examiners, Institute of Internal Auditors
“Sampling is a human coping mechanism for Big Data”- Robin Grosset, MindBridge Ai CTO
MindBridge Ai Auditor
Traditional CAAT tools are rules-based, with limited coverage:
MindBridge™ Analytics Inc. Confidential
Source: Association of Certified Fraud Examiners, International Institute of Auditors
Financial Loss – Known vs Unknown
Financial loss due to human error or by intent ⁓$4T est.
annually
MindBridge™ Analytics Inc. Confidential
Source: Association of Certified Fraud Examiners, International Institute of Auditors, 2018
What we see & know~$200B annually
How does it all relate?
Artificial Intelligence
1956+
Early artificial intelligence
stirs excitement
Machine Learning
1980+
Machine learning begins to flourish
Deep Learning2010+
Deep learning breakthroughs drive AI
boom (Google Cat)
Supervised learning
Human expert feeds the computer with training
data. From that data the computer should learn
the pattern.
Unsupervised learning
No expert input, the computer identifies
pattern in data and looks for outliers. Particularly useful where the human
expert doesn’t know what to look for.
Reinforced learning
Reinforced learning algorithm continuously
learns from the environment in an iterative fashion.
Let’s get a bit technical
“Machine learning is a field of computer science that often uses statistical techniques to give computer systems the ability to “learn” with data, without being explicitly programmed”
Source: Wikipedia
MindBridge Ai Auditor
Ensemble AI is learning-based, with 100% coverage
Augmenting audit with Ensemble AI
MindBridge Ai Auditor
Value of Audit Insights
Value #1Use of Audit Analytics will Improve Audit Quality• Enable auditors to explore large datasets to assess risk & identify outliers• Will have an impact on the nature, extent and timing of the audit plan• Will help connect more information together to elicit better judgement around complex areas
Will Help Client Better Run Business• Client can be involved earlier, conversations more timely and on-going• Additional insights of Interest to management – perspective on trends & risks• Facilitated better decision-making during risk assessment and the knowledge gain is a significant value-add to
client
Improved Efficiencies = Growth Potential• Technology can automate many routine aspects for the audit, giving the auditor increased time to focus on
challenging matters requiring professional judgment• Audit analytics can identify additional areas of opportunities to grow advisory line of business
Value #2
Value #3
Audit of the Future - Key Drivers
TECHNOLOGY: Artificial Intelligence will transform the audit process with powerful technology to provide deep insight to Audit firms and their clients
METHODOLOGY: The opportunity is to reimagine the audit process utilizing available data – both structure and unstructured
STANDARDS: The Auditing Standards Board NEEDS to pace with the reimagined “Audit of the Future”
NEW SKILLS: Audit professionals will require new skills (data analytics, data science and data manipulation) as low level tasks are automated with technology
Integrating AI into your practice
MindBridge has dedicated resources to ensure a smooth transition:
CPA experts Customer adoption experts
Ai Auditor experts
Get support with technical readiness, change management, and audit methodology
How can we help our people embrace artificial intelligence and think differently about data?
Shift Mindset
MindBridge Customer Experience
Imran Hasan Siddiqui, CPA
• About Manning Elliott• Our goal• Our journey with MindBridge• Key challenges• Key outcome • Next step
https://www.mindbridge.ai/ai-will-not-replace-auditors-but-auditors-using-ai-will-replace-those-not-using-ai/
The Time is Now - Embrace vs. Replace
THE FUTURE OF AUDIT & ACCOUNTING, NOW
IFAC Council Meeting
Mark Edmondson FCA & Ellie Dignam ACAVancouver 14th November 2019
BUSINESS OVERVIEW
Global customer base. Teams in UK, US and
Australia covering EMEA, Americas and APAC
Organically grown over 4 years – achieved
through strong early adoption by large UK
accounting firms
Exclusively licensed to accounting firms.
True SaaS offering, with heavy focus on service
Partners to enable global network innovation strategies
Partnering with ICAEW to Elevate skills of current and future accountants Facilitate knowledge sharing among accounting firms Removing the fear of the unknown
HOW INFLO WORKS
2 Inflo transforms &validates data
3 Accounting firms review consistent analysis
4 Data and results moved to other technologies
• Audit platforms
• Financial Statements
• Tax computation
1 Clients upload data 100% of systems
HOW INFLO WORKS
DATA INSIGHTS
HOW INFLO WORKS
REQUEST & SHARE
Client Collaboration & Data Ingestion
VERIFY & REVIEW
Audit Sampling
FOCUS & ASSURE
Revenue Testing
ASSESS & SCOPE
Preliminary Analytics & Detailed Listings
INTERROGATE & EVALUATE
Management Override of Controls
INSIGHTS
Ratio Analysis & Benchmarking
HOW INFLO WORKS
AUTOMATING
PERFORMING existing
tasks and activities
automatically to
improve efficiency and
quality
ELEVATING
REPLACING existing
tasks and activities with
superior techniques to
improve quality and
client value
DIVERSIFYING
CREATING new service
offerings to provide to
clients in complement
to traditional services
EXPANDING
IDENTIFYING existing
clients suitable for
these new services or
other advisory services
REDEFINING
PROVIDING a portfolio
of services to clients to
become the trusted
business advisor
Automated audit sample selection
Data analytics across 100% of the population
Analytics-as-a-service offering
Identify tax advisory work across the firm
Continuous service delivery
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“Employment of accounting professionals is projected to increase 10% over the next 10 years, which is faster than average for all other professions.
In fact, there is a growing talent shortage in the industry that has many large and mid-size accounting firms struggling to fill open roles”
Brian Peccarelli, Co-Chief Operating Officer, Thomson Reuters
CUSTOMER VOICE
Ellie Dignam ACAData Analytics Manager, BHP
Recognised Women in Accounting & Tech (ICAEW)Digital Transformation Advocate
Managed the successful roll out of Data Analytics across the audit division with more than 200 staff
My Passion – Impacting Change that will Future-Proof the Profession
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QUICK QUESTIONS
HOW MANY OF YOU IN THE AUDIENCE WORK IN AN ACCOUNTING FIRM?
HOW MANY OF YOU IN THE AUDIENCE PROVIDE AUDIT SERVICES?
IFAC GLOBAL SMP SURVEY: 2018 SUMMARY
TALENT
54%HAVE DIFFICULTY ATTRACTING NEXT GENERATION TALENT
ADVISORY SERVICES
86%PROVIDE SOME FORM OF ADVISORY / COUNSULTING SERVICES
TECHNOLOGY
38%VIEWED TECHNOLOGY DEVELOPMENTS AS A SIGNIFICANT CHALLENGE
YOUR ISSUES ARE MY ISSUES
Clients
Fee Pressure Attracting ClientsRetaining Clients
Audit Quality
Standards & RegulationsInternational Clients
Efficiencies
Talent
Attracting TalentRetaining Talent
Modernising
Technology
Impact on BHP41 new audit clients
in 10 months since implementing Inflo
“The integration of Inflo into our audit processes has given us and our clients a greater insight into their financial data and opened the door to better opportunities”
Tom Bell, BHP Staff
120% increase in 2019 graduate intake
Sunday Times Top 100 Best Places to Work
British Accountancy Awards Audit Team of the Year 2019
‘Really stood them apart from their competitors’ Ian Holmes, Derbyshire Wildlife Trust
‘The fact that BHP can offer this level of audit quality and value means they really stand-out in their market’ Justin Bennett, MB Advertising
‘We asked our American auditors to implement something similar’ John Cassella, Rotor Clip
‘Given the trustees more confidence in the financial running of the Cathedral’ Fran Joel, Sheffield Cathedral
Impact on Clients
OLD VS NEW
OLD VS NEW
OLD VS NEW
Mark Edmondson, FCAPresident & CEO, Inflo
www.linkedin.com/markedmondson
LET’S CONTINUE THE CONVERSATION
Ellie Dignam, ACAData Analytics Manager, BHP
www.linkedin.com/elliedignam
Olwyn Connolly, FCAChief Customer Officer, Inflo
www.linkedin.com/olwynconnolly
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Practical Insights on Technology ImplementationLisa Padmore
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Concluding Remarks
Practical Insights on Technology ImplementationLisa Padmore
www.ifac.org
@InternationalFederationOfAccountants @International Federation of Accountants@IFAC
Copyright © 2019 by the International Federation of Accountants (IFAC). All rights reserved.
