Financial Audit with DX
We promote the use of technology for future-oriented audits.
DX-enabled audit is a process of ensuring the reliability of a company’s financial reporting and accounting processes by using digital technology and data analysis and efficiently and accurately evaluating financial information.
We are well-positioned to utilize advances in digital technology, including data analysis, in our audit engagements to ensure efficient and in-depth audit procedures.
Our DX Initiatives
- Risk Assessment Procedure
- Fraud Risk Scoring Tool
- Data Analysis Tools
- Risk Response Procedure
- CAAT Tool (ACL)
- Sampling Tools
- Assisting Tools for Working Paper Preparation
ARK’s Fraud Risk Scoring Tool (developed in-house)
We have studied the securities reports of all listed companies and fraud cases for more than the last 10 years, and modeled the likelihood that a company would commit fraud based on the similarities of its financial figures with those of the fraud cases.
By doing so, we quantify the risk of fraud for all listed companies in Japan for each fiscal year.
BI tool and other analysis tools
By using Power BI (Microsoft Corporation) as a BI tool to visualize data and by automatically capturing and visualizing financial figures, an audited company’s status is monitored in a timely and efficient manner. We have also created examples of the use of modern Excel (Power Query, Power Pivot) to conduct more in-depth data analysis.
CAAT tool (Computer Assisted Audit Technique)
ACL Analytics (Diligent Corp) is used as a tool to detect fraudulent journal entries.
Since ACL can automate data processing and extraction through scripts, it efficiently extracts abnormal items from the vast amount of journal data of audited companies.
ARK’s sampling tool (developed in-house)
By incorporating our originally devised sampling method in monetary units, we are able to instantly extract the necessary number of transactions based on the results of risk assessment and the size of the target data.
Assisting tool for preparing working papers (developed in-house)
This is a tool that allows one to record a trail of voucher matches and references between the large numbers of figures recorded, with a single click, conducted as audit procedures.
It is an Excel add-in used for accurate and efficient preparation of working papers.
We are also working to reduce the number of audit man-hours by accumulating efficiency improvements in such detailed tasks.