Question

Express your opinion regarding how robotic processing automation (RPA) will affect accounting and auditing professionals. at least 300 word

Answer 1

Robotic Process Automation is the technology that allows anyone today to configure computer software, or a “robot” to emulate and integrate the actions of a human interacting within digital systems to execute a business process. Robotic process automation is playing a larger role at companies, including in the accounting and finance area, but many executives feel more needs to be done, according to a new report.

The report, from the consulting firm Protiviti, found there’s a large gap in who involves accounting in creating RPA business cases, with 74 percent of companies who are “leaders” in RPA involving finance and accounting, compared to 42 percent of intermediaries and only 20 percent of beginners.

A lot of RPA initiatives often start with accounting said Angelo Poulikakosa managing director at Protiviti. “Accounting contains a lot of processes that are high-transaction, repeatable, well structured, rules-based processes that lend themselves to robotic process automation. A lot of times RPA initiatives also start with accounting because accounting oftentimes rolls out to a CFO, and it catches the CFO’s attention that you can have a ton of cost savings through the use of RPA.

With some of the finance organizations that you see fit within corporate headquarters and those organizations are utilizing RPA, a lot of times their role isn’t really taken over by a bot, but their role might change based on the impacts of implementing RPA,” said Cassie Putnam, a director at Protiviti. “A lot of that will be some of the exceptions handling, so as a bot performs a process, there’s going to be areas of that process that need some subjectivity or judgment, and so that accounting person or finance person may be responsible for performing an action based on results coming from a bot and then passing that back off to the automated process. There’s still that element of needing that knowledge and skillset that you have with your accountants to some extent. You’re never going to get a full, 100 percent automated process with a U.S. finance and accounting organization. There’s usually some complexity and judgment that’s involved with those processes that you will need that skillset for.”

Auditing would seem to be an area where RPA might come in useful, but Protiviti hasn’t seen much evidence of that yet. “I think in audit there’s actually not a ton of high volume, repetitive work that lends itself to RPA, where the driver would be reducing headcount,” said Poulikakos. “I think in audit there’s a different lever that RPA can be used for, and that is reducing the cycle time in performing certain types of auditing or performing certain types of control testing. It can also be used as a lever to evaluate a larger population of transactions. Auditors oftentimes take sample-based approaches to review documentation, to review accounts. Whatever they’re reviewing, they’re always taking these statistical samples, and they’re doing that because they have time constraints. There are certain types of audit tests and procedures that might lend themselves to RPA, so an audit department that can identify those now can use RPA as a way of looking at the full population of transactions, or if not the full population, just a much more significant amount than the traditional samples that an auditor would look at.”

“I also allow them to initiate that review more frequently than they have in the past as well if it is automated,” Putnam added. “It’s something that if maybe they were looking at it twice a year, they could go back and look at it every quarter or even monthly if they wanted to.”

The study found several benefits associated with the motivation to invest in RPA. According to the survey respondents, they included increased productivity (22 percent), better product quality (16 percent), a strong competitive market position (15 percent), customer satisfaction (12 percent), greater speed to market (11 percent) and trimming costs (3 percent).