Question

How will Drone/ Sensor technology impact financial statement auditing? Pros and cons?

Answer 1

We are spending a lot of time talking about, and thinking about, new technologies and their impact on the accounting profession. As accountants it's important we embrace the opportunities technology brings to the industry and how we can use them to enhance the role we perform, rather than seeing technology as a threat.

Drones are an emerging technology have been in the news over the last few months, and not of course for positive reasons. However, drones can potentially be used to improve efficiency in accounting. As an example, PwC have recently completed their first stock count audit using drone technology. They used a drone to capture images at a coal reserve in South Wales, and then the images were used to measure the volume of the coal, and therefore the value of the coal based on the measurement of volume.

The traditional method for measuring the volume involved physically climbing over the coal reserve using a two metre GPS tracking pole to measure data and then estimate volume. As a comparison, using the drone meant that accuracy levels were increased to above 99%, and also there was a reduction in time taken of 85%, as the traditional method took 4 hours to take the readings, whereas the drone managed it in half an hour. With this particular example, there are a range of benefits in using the drone; time-efficiency; accuracy and also benefits in health and safety as the need for someone to climb over the coal pile is removed.

This is a great example of how technology can enhance our productivity. However, we need to remember, that technology doesn’t just work on its own! It produces data that needs to be interpreted and translated into beneficial information for a business. As accountants, we should strive to keep abreast of how new technologies work and how they can be used to enhance efficiency, and then develop the skills needed to interpret and present the data, so that we are able to continue to add value to the business.