Making most of the operational functions automatic, leaving the crucial responsibility of the process evaluation phases to human intervention: this is the world record achieved by Rsm with Raffaele D’Alessio and Nts Project

It is a world record, and Italian success, signed by Rsm Spa auditing company together with Nts Project, a specialized and highly qualified software house. This is an unprecedented software that manages to perform most of the operational functions included in the process of auditing a corporate balance sheet automatically in full autonomy, leaving  just the evaluation and final stages of the process to the human intervention of the responsible qualified auditor.

A turning point, a leap forward in terms of efficiency and productivity potential that will set an example throughout the audit industry worldwide. "We are proud of it because we have invested in financial resources, but above all, study and professional effort", explains Mr Rocco Abbondanza, managing partner of Rsm, "and because at this moment the other operators in the sector are also unable to do the review with such a massive contribution of augmented intelligence, as we like to define what many others call artificial intelligence».

Increased intelligence

But, what's it about? Let's try to understand it better, also and above all, from the point of view of that wide range of companies - only in this 2020 more than 80 thousand more than before - which by law must certify the budget and fear, or feared, of having to take over for this yet another prohibitive cost of a mandatory fulfillment. "To explain myself better, I would like to recall what usually happens today in the traditional auditing processes, which have not changed for a hundred years," says Abbondanza. And he explains: «Currently, the one in charge of the auditing process goes to the client's administrative offices and spend one, two or even three weeks there, to examine the basic documentation. Needless to say, it is a dispersive, repetitive, modest quantitative work. It's basically a long collection of documents. " Reasoning on how to overcome such a sterile and slow practice, Abbondanza has set up a dream-team within Rsm, made up of Mr. Raffaele D'Alessio - ordinary professor of auditing at the University of Salerno - and Teresa Puca. "Two true visionaries," as he defines them. D’Alessio has the peculiar characteristic of being a true computer expert, and he had already worked with the Nts Project, a design IT boutique focused on creating unique software, customized to the needs of customers. Hence they undertook the challenge. "And that it has proved to be a team of true champions," sums up Abbondanza. So how does this software work? Firstly, it connects - with maximum technological flexibility, it can perform on any client! - the accounting system of the company whose financial statements are to be audited. It reads the data and begins, using specific artificial intelligence algorithms, to do what is usually done manually - on excel sheets, and therefore with the error possibility of a manual process - by the auditors. Of course, the system also acts remotely, a precious prerogative of these times. «Let's say that the company must send the e-mails to confirm the sales - Abbondanza illustrates - Those who usually read: “Dear customer, we understand that your balance is 100 euros. Does it also appear to you?”. Dozens if not hundreds of certified e-mails must be filled in and sent by hand. Therefore, our system directly and electronically sends these verifications to the customer as well as to the supplier. And it saves a lot of time and prevents mistakes for the human team».

The work of the software

The software reads the accounting books, evaluates to whom it is necessary to send the emails, sends them, and the customer is invited to flag a yes or no according to the balance that is proposed. A lot of time is also saved in checking banking issues: by interacting automatically with the credit institutions, the new software not only checks on the balance of the counterparties, but it communicates directly with the risk centers.

"Another consideration is easily understood by every entrepreneur - continues Abbondanza - Today invoices are all electronic, what sense does it have to collect them in paper form to examine them, when on the SDI we can see both the invoices issued and the relative acceptances? The auditor's mission is to accept the authenticity of the turnover, but it is no longer forced to be satisfied with a sampling, since everything can be verified automatically and analytically. Is it clear which reinforcement of anti-fraud prevention is prompted our innovation? It introduces unbeatable algorithmic protections ».

Yes, because the daily reality of the audit work is that, in case of suspected fraud, the auditor usually asks the company management for clarifications and documents, and ultimately he must use – or even better: make use - of what had been provided to him in response, especially when the possible fraud is complex and it involves an advanced counterfeiting rate. So, there are anti-fraud algorithmic protections. "The Enron case - underlines Abbondanza – was brought to light thanks to the use of software to verify a specific financial statement data set".

Methodological metamorphosis

Needless to say, this methodological metamorphosis involves series of changes to the auditors' activity – surely challenging in the initial phase in which they will be included in the daily work, but offering a very advantageous perspective. «Yes, from our point of view, all this helps and qualifies our work - argues Abbondanza - It allows us to make the best use of human resources, with a unique organizational flow. The machine guides the processes, starts from the acceptance, takes the budgets, compares everything with the regular sector parameters. In 20 seconds, it generates a complete 30-page report about the client company… It illustrates its positioning, lists its competitors. It also allows the customer to look at oneself in a critical perspective on the context ... instead of simply saying "everything is in place", the review output is articulated and authentically customized, it is not the usual report similar for everyone. That remains, it is a legal obligation, but our system goes far beyond ».

But there is more. This increased intelligence shock that is introduced into the auditor's profession fits perfectly into the process of evolution and renewal of the profession itself. New generation auditors will no longer take care of checking invoices and their bank reconciliations manually. They are expert analysts for the various business sectors they deal with. They go from one role (and one activity) comparable to a commodity, to another, definitely characterized as a specialty. From serial-counter to specialist ... From auditor to full consultant. «Without prejudice to the crucial institutional role of the auditor - observes Rocco Abbondanza - the future of our role will begin when the entrepreneur sees us no longer as just a possible censor ready to shake the red paddle in front of the financial documentation, but as one to convene when making and sharing crucial decisions for the future of the company ".

It will not be easy or automatic: and those who know the reality of the profession from within, as well as that of companies, know well that the evolutionary process has just begun. But on the right foot, at least from Rsm Revisione. «We will need to live a humble and deep training phase - adds Abbondanza - that we will build together, to take confidence and control of the new working dynamics and learn to change the working plan, parallelizing the activities, but also entering into this new more valuable role and budgeting everything according to new parameters ».

All of this will already begin to be seen in the corporate financial statements that, by April, companies must one way or another approve and therefore must first obtain the auditor's certification report: "It will be a test season, but it has already started. And in the meantime, we are thinking of a completely new way of dealing with this joint in the life of the company ", says Abbondanza," starting the review work with a completely new approach".

The new frontier

For Rsm Revisione, everything fits perfectly with the new "global audit methodology" that the group has adopted worldwide, in the initials Orb. "It is the new frontier - Abbondanza concludes - that will make unprecedented commercial alliances possible for auditors, despite a category called to an unprecedented industrial challenge, with 80 thousand new customers to be certified for the first time this year. Our software, which fully adheres to the Orb methodology launched by Rsm, is a way of bringing all the most advanced technologies to the service of auditing and to the best use of what remains the most important audit tool: i.e. the preparation and passion of each professional and auditor in doing their job. Our new software puts more and more data at the service of audit professionals than is available so far and in seconds. It will prepare, I repeat, reports of dozens of pages tailored to the needs of our customers. It will be the best answer to those who believed that the audit was a "commodity": on the contrary, the audit must, in compliance with its role and the rules of independence, give added value to our customers ".