John Bednarek

John is a veteran of the high-tech scene with over 25 years of experience in senior leadership roles in business development, product marketing, sales, sales enablement, channel marketing, and alliances. John has worked with major international companies from Motorola, Avaya, and Nortel to start ups such as C-Port Networks (acquired by Motorola in 2000) and Vayyoo Inc. (acquired by CafeX in 2017). John takes prides in identifying opportunities in the market and delivering real business results that meet and exceed customers’ expectations. John graduated from Carleton University with a Bachelor of Commerce, Honours.

Audit in the age of COVID-19: A guide

May 26, 2022June 4, 2020 by John Bednarek

a complex amount of data put into a pattern

In today’s world of COVID-19, accounting firms can be pressed by clients for short-term basic deliverables. There are still expectations for getting audits completed as pragmatically as possible per the standards along with the new norm of engaging clients virtually and securely.

I believe this challenge presents an opportunity for firms to re-position themselves for success in addressing this new environment. Humans adjust to new challenges well and this will accelerate the digitization and automation of key accounting processes, including auditing. This automation will not happen overnight but will transition as a step change, where the audit of the future bears little resemblance to the audit of today.

“We believe that the application of artificial intelligence will be immensely valuable in helping companies adapt to these trends. The most successful use cases will be those that seamlessly combine AI with human judgment and experience.”

– The Rise of the AI-Powered Company in the Postcrisis World, Boston Consulting Group

The accounting firms that adjust with speed and agility will be well-positioned to grow today and in the future.

Audit analytics as a competitive differentiator

The topical issues we are witnessing today include ‘going concern’ and financial performance analysis. Tremendous focus is being applied to cash flow, debt management, and yes, business survival. Businesses that are feeling financial stress are seeking additional education and guidance.

Remember, many times clients do not know what they want or what you can do for them. This is a perfect time to make your firm relevant to your clients. You can critically evaluate what is good for your clients and do so by leveraging audit analytics tools to educate them and develop appropriate plans to address their challenges.

Audit analytics builds usable market or industry-specific knowledge, so while you might not be able to sell advisory services directly to your audit clients, having better market knowledge improves your ability to sell this value to other companies and win new customers. Your firm becomes more relevant to their business and you have created a competitive advantage for your firm.

Remote auditing begins with security

It will also be paramount to ensure that the technology and services you leverage are designed to work in a virtual environment securely. Ensure that your audit tools are cloud-based, have primary and backup infrastructure providers that are fully ISO 27001 and SSAE 16 compliant, and use data encryption using NIST-approved algorithms (AES 256). It’s also critical that the vendor has completed the AICPA Security Organization Controls (SOC) compliance and has completed its SOC 2 Type 2 certification against all five trust services criteria.

Audit analytics in action

A MindBridge customer spoke recently about the value of our platform and how it positions the CPA firm for success. They stated that Ai Auditor improves the client-auditor relationship by allowing them to ask better questions and enhance the knowledge of their client business more than traditional tools. The platform becomes the single source of information that leverages the general ledger and provides 100% coverage with its transactional approach.

This positions accounting firms to:

Understand and guide their clients appropriately, especially in the storm we are witnessing today
Critically evaluate what’s good for their clients, including risk awareness and management
Educate clients on their options and provide appropriate advice in making better decisions for their business

Accounting firms can re-invent and position themselves for success in this new world by delivering value-added services primarily driven by what is good for their clients. Your commitment to deploying innovative new solutions, such as audit analytics, and creating a competitive advantage for your firm is critical in today’s world of a virtual practice. Internally, firms and their employees will be inspired with the latest innovations and automations that our platform delivers.

There are risks in making this transition and investment but by working with the right partners and being astute about it, the benefits for your practice will be considerable.

AI Will Not Replace Auditors, but Auditors Using AI Will Replace Those Not Using AI

December 18, 2020March 2, 2018 by John Bednarek

The more things change, the more they stay the same (at least that is what my mom would say). This wisdom can only be partially applied to the world of auditing. With the explosive growth of (big) data, and with an ever more connected, globalized world, the manner in which we approach auditing must change, and it must change significantly. The roles and processes of auditing, and the people working in that area will remain the same, but the way we conduct audits will change to address these new realities.

The good news is that, armed with new technologies such as Machine Learning and Artificial Intelligence, auditors can be empowered to face these new challenges — while potentially delivering better assurances on the state of their client’s business, and providing more value-added services than ever before.

The purpose of this blog post is to look at the role of auditors and how it is changing in today’s new landscape.

Auditing is a process in which one party examines another party’s information to ensure that it is fairly stated (Loughran).

One of the core methodologies of the modern audit process is sampling, which draws conclusions about a data population by examining a subset of the data. The reason that sampling is relied upon is one of cost and time, it would simply be too expensive, or too time consuming to audit all of the data manually. There are inherent weaknesses to sampling however, as human bias and the possibility of erroneous decisions based on the conclusions resulting from the examination of only a sample of data, present real problems.

As my colleague Robin Grosset, CTO of MindBridge Ai once said, “Sampling is a coping mechanism for dealing with large data, because it is humanly not possible to examine each and every transaction.” The alternative is to examine all of the data, which can be onerous and not very practical.

The situation is further compounded by the explosive surge of big data. The International Data Corporation (IDC) says that the amount of information stored in the world’s IT systems is doubling about every two years. By the year 2020, the total amount of data will be enough to fill a stack of tablets that reaches from the earth to the moon 6.6 times.

How can I, as an auditor, possibly provide reasonable assurance that financial data is free from material irregularities, when faced with these new challenges introduced by big data?

You can fight fire with fire in this scenario. The ability to process big data is bolstered by recent technological advancements (i.e. microprocessors, internet, software) and now we can begin to leverage cutting edge technologies such as AI, to address these challenges. According to a report by Forbes, an auditor’s key role is to determine a company’s most significant threats, however traditionally auditors have devoted less than 25 percent of their time to risk analysis.

At MindBridge Ai, we recognized this challenge early on, and have developed a purpose-built platform for auditors to utilize machine learning and AI, along with more traditional methodologies such as business rules and statistical methodologies. Our Ai Auditor platform can ingest 100% of financial data and identify any anomalies. Thus, we improve the audit process by not just making it more complete, but by making it faster and more effective.

What does this mean to an auditor? It means an auditor can be more effective and efficient, while reducing their costs and providing greater insight and assurance to their clients. If any regulators have questions about how the audit sampling was conducted, you can simply point to the MindBridge Ai Auditor platform and show them the algorithms that were applied. An auditor in this scenario can now move up the value chain and become a true strategic business advisor to their clients.

For those auditors who do not embrace AI, their future will be more burdensome, and they will certainly be surpassed by their colleagues who are using AI to their advantage. Such is the cycle of innovation, where relics of the video rental and retail industries serve as a testament to the velocity at which antiquated approaches are being replaced by some more technologically sophisticated alternatives.

As I stated at the beginning, “The more things change, the more they stay the same.” In the case of auditors, we can see that role is more crucial today and the future than ever before. Due to the rapidly changing landscape however, of big data and a connected world, the only way to manage that complexity is with technologies such as AI. For those who do not embrace AI, they will be eventually replaced by those auditors that have embraced it. AI in auditing is here today and is making inroads faster than you may know!