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A Case Study
Although audit practice has been improved over the last 30 years by the incorporation of office software such as MicrosoftExcel and Word, working paper software such as CaseWare Working Paper, and audit tools such as Audit Command Language (ACL) and CaseWare IDEA, a massive amount of manual, repetitive, simple, and rule-based tasks are still taking up much of auditors' time. Examples of such tasks include audit data preparation, file organization, integration of data from multiple files, performance of basic audit tests in Excel, copying and pasting data, and manual annotations. These tasks are not only time consuming and rule based; they are also prone to error. To further improve the efficiency and effectiveness of audit practice, auditors need to rethink methods and leverage newer technology.
Robotic process automation (RPA) is software that interacts with other application software at the user interface level (i.e., in the same way as a human) and is used to automate processes that are structured, rule based, and repetitive, as well as those with machine-readable data. RPA can automate tasks that are executed across different software applications. Kevin Moffit et al. ("Robotic Process Automation for Auditing," Journal of Emerging Technologies in Accounting, Spring 2018, http://bit.ly/2JKLCee) proposed that RPA can facilitate audit process automation. This article uses a case study of an accounting firm's employee benefit plan audits to demonstrate how RPA has the potential to improve audit quality.
Potential Applications of RPA to Audit
Automation is not a new concept in auditing. The innovation of RPA is that it offers the ability to connect otherwise unintegrated automated audit activities. For example, because RPA is an overlay software that resides on the presentation layer-that is, the layer of code that translates the program data into something a user can understand-it can be used to automate audit evidence collection activities. Much of the audit evidence comes from a variety of sources and can be burdensome for auditors to collect. RPA can streamline audit evidence collection, and potentially preparation activities, by taking standardized data and combining it from different sources into one audit workpaper; as a result, RPA can execute audit tests that have been preprogrammed in other software applications, such as Excel or CaseWare IDEA (Moffitt et al.). In...