Flying vehicles or unmanned aerial vehicles (UAVs) are basically drones that can fly remotely. A drone is usually equipped with autonomous navigation capabilities, high-resolution cameras and infrared rays to scan large areas and determine objects and contents. A drone technology requires vocal interaction, a friendly user environment and a simple and secure user interface to function effectively.
Global Trends
The current Drone Industry Insights reveals that the global drone market size is forecast to reach $54.6 billion by 2030 with the commercial market growing at a (CAGR) cumulative annual growth rate of 7.7%. In terms of classification, the drone technology is being used in many industries including Healthcare and Disaster Relief (Public Emergency Services), Cargo, Courier Services, Intralogistics and Warehousing, Information and Motion Pictures, Insurance, Safety and Security as well as Mining and Quarrying. At the moment, the top industries which uses the drone technology are Energy, Construction and Agriculture. By application method, mapping and surveying tops the list. This is followed by inspection as well as photography and filming. A global total of 7.6 million drone flight hours is expected to be recorded by the end of 2023.
Use Cases
What’s more, in construction, drone technology can be very useful. Thus, it can be used to survey and monitor building sites and report progress, spot defects early on to avoid rework and then show off finished projects. Indeed, drone technology can also help in disaster relief by providing intelligence across an affected area. As of 2023, there have been an increasing number of entrants to the drone space, specifically for wildfire management. Data Blanket is one of such companies based in Washington, USA. The startup company has developed its own software that utilizes Artificial Intelligence (AI) to map the perimeter of wildfires while providing additional real-time information of ground conditions to firefighters on-site. The drones are flown autonomously and are capable of landing on their own. Drones also assist in the physical inspection of assets commissioned over large areas such as DG (Diesel Generator) sets, plant and machinery, telecommunication and agricultural farm equipment, power lines or road networks. In another vein, drones also help in other inspections with regard to regulatory compliance and supply chain management.
Applications in Audit
A drone technology can also be used in the accounting profession in areas concerned with inventory management, revenue recognition, cash flow management and risk management. It can be used in auditing to confirm the existence and completeness of inventories and other assets. This is based on the fact that drone technology can make its way to the remotest of locations and record significant volumes of audit evidence in very short periods with precision thereby enhancing the reliability of such data. As the drone technology produces big data (massive amounts of data), same can be interpreted and assist in making meaningful audit outcomes. An auditor with the expertise can utilize the drone technology to take thousands of pictures and measurements of a site during his engagement with a client in mining. Other observable elements which make the drone technology fit for auditing functions have been highlighted below.
Qualifications for its Applicability
- Drones have great payload capacity for carrying sensors and cameras. They enhance mobility, therefore, they can photograph and physically examine the count of large quantities of fixed assets and inventory.
- Drones are integrated with image processing software including photogrammetry and video content analysis that can scan, process and output audit data.
- Drone captured audit data can be combined with various alternative sources of data such as QR (quick-response) machine-readable codes, handheld bar scanners and manual counts to optimize quality of deliverables, consolidate audit data and enhance the execution speed while ensuring correctness and completeness of data. It allows high quality data acquisition.
- Drones have extended battery life and can be in operation for longer periods to complete the audit procedures within defined timelines.
- As part of safety, health and environmental audits, drones facilitate in the execution of project/ site audits especially involving civil construction and infrastructure development and identifying potentially hazardous environments that can impact health and wellbeing. In relation to that, the technology can be applied effectively to assist in asset verification and valuation.
- Cost Implications: Drones may relatively save money for clients who can use them for mapping, safety monitoring and to inspect bridges and buildings.
- Drone methods allow for storage of long-term data. This is useful to account for physical factors like the weather, light conditions and geomorphology /geographical area for more spatio-temporal analysis (based on the data collected across space and time).
- Reduces the risk of injury (in health and safety) as the need for someone to climb higher ground is removed.
Indeed, the integration of a software based on the use of a drone technology in conducting audit engagements can improve reporting timeliness, reduce travel costs, increase fieldwork efficiency and provide more documentation. For instance, some of the indicative results for process efficiency and optimization in a livestock inventory audit revealed that count times were reduced from 681 hours to 19 hours while error rates dropped from 0.15% to 0.03%. It can, therefore, be said that the use of a drone technology creates higher quality audit documentation and reliable outcomes. The drone technology can also produce accurate data that can be relevant for future forecast and planning. The application of a drone technology in these scenarios makes it faster, safer and more accurate than traditional methods thereby enhancing productivity. Despite, the useful application of the drone technology in several industries and also for auditing, they are prone to the risk of making mistakes just like any other innovative or emerging technology.
Conclusion
In closing, auditors and accounting professionals need to recognize the emerging role of the drone technology in their line of duty because it is here to stay. Its application is crucial and can help a company thrive and maintain a competitive advantage. That said, the technology is controlled by experts, therefore, imperative for auditors or accountants to develop the necessary skills and understand their applications to enhance efficiency and effectiveness. It will always be a welcoming decision to adopt the drone technology to improve auditing processes in those peculiar environments.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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