Financial staement audit is one of the service sectors with many opportunities for growth in the Industry 4.0 era. With the strong development of technology in the current Industry 4.0 industrial revolution, audit firms have numerous opportunities to access and expand the provision of financial statement audit products and services tailored to various customer groups. In addition, state regulatory authorities also have the opportunity to learn effective and advanced financial statement audit operation models from developed countries around the world. All of this contributes to helping the state improve its legal system and standards, meet international requirements, and familiarize businesses with international audit standards and norms.
Table of contents:
Opportunities for the Audit Industry Amidst the Boom of the Industry 4.0 Revolution
Challenges and Difficulties in the Audit Industry
RSM Vietnam – Adapting to Stay Ahead of Challenges
In 2013, the term "Industry 4.0" was mentioned for the first time in a report by the German government. This revolution is considered a historic breakthrough that has the potential to change the way people live and work. It is built upon the foundation of the digital revolution, featuring the emergence of robotics, artificial intelligence, the Internet of Things, and more. Thanks to technological advancements, the future economy is predicted to experience growth, and new markets will expand. However, this revolution is also evaluated as having the potential to disrupt the labor market as machines compete with human jobs, leading to increasing automation and transforming the entire economic landscape.
1. Opportunities for the Audit Industry Amidst the Boom of the Industry 4.0 Revolution
With the strong development of technology in the Industry 4.0 revolution, auditing firms have numerous opportunities to access and expand the supply of audit products and financial reporting services tailored to different customer groups. Additionally, state regulatory agencies have the opportunity to learn from efficient and advanced financial reporting audit operation models from developed countries. Consequently, this has contributed to improving the legal framework and standards to meet international requirements, helping businesses become familiar with international auditing standards.
The establishment of large data centers, or Big Data centers, has significantly benefited data analysis and management in the field of financial reporting audits today. Decisions can be made more quickly and effectively through the collection, analysis, and processing of big data, which will help reduce costs and create a competitive advantage for auditing firms. Auditors can now extract data from the industry's data warehouse instead of manually inputting information as before. This allows decision-makers at all levels, control stations, and stakeholders to benefit greatly. As a result, the reliability and validity of reporting through self-audit or self-check systems have significantly improved.
The execution of manual accounting and financial reporting tasks, such as income tracking, data processing, and calculations, is quite straightforward for AI. However, more complex tasks like analysis and handling of complex situations can be challenging for AI without human intervention. Nevertheless, AI still plays a significant role in the accounting and auditing environment, affecting the efficiency and circumstances of these operations.
One prime example of this is the application of AI in financial reporting audits, where it aggregates data from contracts, identifies related terms for accounting checks (e.g., contract start date, payment amount, renewal or termination terms). This allows RSM's employees to handle tasks more efficiently, providing effective support to clients through the automation of these processes.
Another example is the use of RSM CaseWare to support financial reporting audits, tax consulting, and client support services. Automation is applied to extract data from clients' leasing contracts, and the tool also assists in identifying anomalies and analyzing relationships within the data. This simplifies the tasks of auditing professionals in executing their CaseWare audit work.
However, the rapid development of new technology also brings about new challenges. For instance, when AI, robots, algorithms, or software perform large volumes of work, auditors must assume responsibility for verifying the accuracy of the results, as there is always the possibility of risks during the AI or robot's work process.
2. Challenges and Difficulties in the Audit Industry
Despite the opportunities, challenges persist in the auditing industry. One of the main challenges is cybersecurity and information security risk prevention. Effective measures need to be put in place to protect the software, hardware, and data of both the business and its clients. In the process of adopting Industry 4.0 technology, auditing firms must control changes and ensure the security of their services alongside implementing new services in the digital age. Furthermore, the financial reporting audit market will witness intensified competition from foreign auditing firms. Without self-improvement and continuous development and adaptation, Vietnamese auditing firms may face bankruptcy, dissolution, or a reduction in operational scale due to this fierce competition.
Furthermore, another significant challenge for the auditing industry is investing in equipment to adapt to the rapid development of digital technology. The high efficiency associated with investing in new technology equipment is undeniable, but the cost of investment remains a concerning issue for the entire industry. Additionally, educational institutions in Vietnam still tend to provide traditional accounting education that does not align with the practical needs of businesses. These programs often emphasize theory over practical application and lack depth in practical training. Simulation accounting models are not widely implemented in many educational institutions, limiting students' exposure to real-world accounting practices. Currently, the demand for high-quality practical human resources has not been adequately met.
3. RSM Vietnam – Adapting to Stay Ahead of Challenges
Between the challenges and opportunities brought about by the Fourth Industrial Revolution in the field of accounting and financial reporting, RSM, along with our team of experts, has continuously enhanced our professional knowledge and soft skills to develop ourselves and gain a competitive edge in this era of globalization and digital technology. At RSM, we prioritize our human resources, offering modern training programs each year with content tailored to market demands and trends. Our teaching staff is highly experienced and influential in the field of auditing and accounting in Vietnam.
Secondly, RSM invests in modern infrastructure and specialized auditing software to improve the quality of financial reporting audits. We stay up-to-date with current digital technology trends, regularly updating our expertise, and adopting the latest practical technologies in our work.
Therefore, with RSM's meticulous preparation and investment, combined with our highly experienced expert workforce, we are committed to delivering the highest quality and most efficient auditing services in general and financial reporting audits in particular to our valued clients.
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