Rise of Robotic Process Automation

This Tech Talk was a combined effort of Brandon Hum and Hannah Miller

With growing technological advances, many mundane tasks are becoming automated and standardized. There is not a single industry that is immune to the current technology climate, and thus must adapt their practices to remain competitive and efficient, much less relevant. The accounting industry is no exception, as most companies in public accounting have begun to adopt Robotic Process Automation (RPA) within their routine practices.

What is RPA?

RPAs are a type of software that allows for instant processing and analysis of basic or day-to-day transactions. It is typically a mix with artificial intelligence that allows it to have high-level thinking at high capacities. It can be programmed to fit different needs throughout the business, depending on service line, account type, etc. The trick to RPA is that it requires rule-based processes. When an RPA has defined boundaries, it can use applications to process information, change data, and communicate with other systems (Boulton, 2018).

Accounting Application

It is important to note that RPAs are applied differently depending on the service line. In tax, for example, they have a base set of rules and different software that would require a different structure of an RPA. A tax accountant is looking to ensure their client is meeting regulation and providing proper recording, whereas an auditor is doing test work to ensure accuracy and proper representation. RPAs are therefore more suited for audit work because work can be refocused on analysis rather than the simpler tests required.

In this article by the CPA Journal, they outline three main steps for the initial use of RPAs.

●       Process Understanding

●       Audit Data Standardization

●       Execution of RPA-based Audit Tests

Process Understanding is the use of RPAs in the case of repetitive and mundane tasks that do not require high level thinking nor opinions. In this RPA application, it would be required that the tasks are extremely broken down as to not confuse the robot. Audit Data Standardization would have to ensure that data was consistent in terms of its format so the robot would not have any issues reading or understanding it. Finally, in Execution of RPA-based Audit Tests, they would potentially need new software or skills teams that have a higher level of understanding of the new system.

Current Usage

Big four accounting firm Ernst & Young has been ranked #1 by HFS Research because of their innovations and implementations of the system. They have been able to use over 2,000 robots which conduct the work that would equate 2.1 million hours by humans. Currently their focus is developing RPAs for use in telecom and as an automated process mapping tool (Sankaran and Burgess, 2018).

Pros and Cons

RPAs allow companies to perform tasks at a much higher rate, driving higher productivity rates. Many bots are fairly simple to implement, and can be programmed to cover low-value tasks, leaving a company’s human capital with more time to perform more value-added services to clients. In an audit firm, many of the data collection and financial sampling and testing can be handled by a well-programmed bot. This allows auditors to focus on analyzing and understanding the data to better opine on the financial statements to their client (Poulikakos & Putnam 2018).

However, RPAs do come with costs. As automation increases, so does the potential that the company eliminates some of its human capital. Also, it can be difficult for companies without the resources or knowledge to properly implement and scale bots to full cover their needs. A company that tries to program a bot to perform a task without first investing in the proper IT environment needed will not achieve the success it intended. Despite this, with a strong plan, a proper IT environment, and the knowledge base to implement and scale bots between processes, a company can successfully use RPAs to increase its productivity.

Additional Links

For more information about Robotic Process Automation, please see the following articles and video.

1. Robotic Process Automation: How does it work?
2. 7 RPA Training and Certificate Courses
3. What is Robotic Process Automation?

4.     So You Want to Use RPA in Audit — Here’s How You Start

Questions

1. Do you see any potential automation within your future career/industry?
2. Do you think there will be any public lashback over the increased use of robots?

Works Cited

Boulton, C. (2018, September 03). What is RPA? A revolution in business process automation. Retrieved from https://www.cio.com/article/3236451/what-is-rpa-robotic-process-automation-explained.html

Poulikakos, A. & Putnam, C. (2018, September 19). Retrieved from https://blog.protiviti.com/2018/09/19/want-use-rpa-audit-heres-start/

Sankaran, A., & Burgess, B. (2018, November 13). EY ranked #1 in robotic process automation services by HFS Research. Retrieved from https://www.ey.com/en_gl/news/2018/11/ey-ranked-one-in-robotic-process-automation-services-by-h-f-s-research

Vasarhelyi, M. A. (2018, July 11). How Robotic Process Automation Is Transforming Accounting and Auditing. Retrieved from https://www.cpajournal.com/2018/07/02/how-robotic-process-automation-is-transforming-accounting-and-auditing/