CPAs Can Perform Audit Engagements in the Cloud with AuditFileby
While home for Thanksgiving in 2011, brothers Kevin and Steven Bong had a little fun at their dad’s expense. As a CPA for the past 35 years, Gary Bong has had plenty of experience performing audits. But according to Kevin Bong, the outdated auditing software his dad was using while working from home often made him very frustrated.
“My brother and I were taking a look at his work and poking a little fun at the software,” Kevin Bong told AccountingWEB. “There was a paintbrush button on the tool, like in Windows 95. So we asked him what the paintbrush does, and he said, ‘I don’t know, but don’t touch it! You might break everything!’”
When Gary told his sons how much the software cost – a six-figure amount – Kevin and Steven, both computer programmers at the time, agreed there had to be a better way. “We thought that maybe we could build an auditing program,” Kevin Bong said. “How hard could it be?”
It wasn’t easy, but the Bong brothers, along with a team of programmers and CPAs, did build an online auditing solution for accounting professionals called AuditFile, which officially launched last August.
“Our goal was to give the profession a better tool,” said Kevin Bong, who studied accounting and computer programming at the University of California-Los Angeles and spent some time with Big Four firm Deloitte LLP. “Public accounting is a great profession, and there’s a lot of exciting technology coming out for bookkeeping and tax. We really wanted to provide an easy-to-use and enjoyable auditing tool for CPAs, especially the younger ones coming into the profession.”
AuditFile is a secure, cloud-based tool that allows CPA firms to perform more efficient audit engagements. Users can create an audit in a matter of minutes. Real-time dashboards and progress indicators keep managers informed of the audit’s status, while streamlined workflows and approvals keep the audit on track.
“Analytical tracking and workflow is an important element of AuditFile. It links planning, programs, workpapers, and the trial balance in one solution,” said Bong, who is COO of San Francisco-based AuditFile. “We have the ability to allow a lot of information to flow through the entire audit.”
Top Features of AuditFile
Other key components of AuditFile include:
- Intuitive design
- Advanced file cabinet functions with integrated risk assessment and audit programs
- Monitors multiple overlapping due dates
- Tracks and resolves open review comments
- Standardizes engagement requirements throughout the firm
“The program is also customizable. You can customize procedures, settings, and permissions. For example, you can modify the signoffs required for procedures, the staff levels, and permissions for each staff level,” Bong said. “We’ve also really tried to link the audit procedures with the audit program, instead of the procedures being stored in a Word document. With some systems, you’d open up the Word document, maybe there’s 10 to 20 steps, and you sign off in the document. We have a much more user-friendly program to track that. You can attach a workpaper or write a memo directly on a procedure, and it keeps track of who touched it and when. It’s a really much more dynamic workflow.”
The fact that AuditFile is completely cloud-based also sets it apart from other auditing programs on the market, Bong added. Data can be accessed securely from any device and at any location, 24/7.
“AuditFile has virtually eliminated many problems associated with audit and file organization so that we worry much less about duplicating practice aids, missing a critical step, or neglecting to attain a signoff by an audit manager. We do all this while the partners of our firm can work from home, a coffee shop, or in the office,” James Johnson, CPA, owner of Russell, Kentucky-based CPA firm JH Johnson & Associates, said in a written statement.
In building the product, Kevin and Steven Bong enlisted the help of CPAs who provided the brothers with crucial input. “Once we had a beta version ready to go, we got it in the hands of some CPAs who our dad knew. So we had a few really helpful CPAs using and testing the product for about a year and a half,” Kevin Bong said. “We were consistently getting feedback.”
Business Is Picking Up
Since its official launch in August, about 30 firms are using the auditing program – and more are in the pipeline, Bong said.
“Right now, mostly smaller CPA firms have signed up to use AuditFile. They’ve been really helpful and have given us some great feedback, especially on new features we’ll be rolling out over the next couple of months,” he added. “We’ve also received quite a bit of interest from larger, top 200-sized firms.”
After registering for AuditFile, firms have access to a free 14-day trial. Costs then range from $49 to $199 per user, per month depending on the package. During busier times of the year, firms have the ability to add users to AuditFile – or drop users when audit work slows down. “They only pay for what they use,” Bong said.
Last year, AuditFile raised $3 million from several investors – including Banneker Partners, Green Visor Capital, Rothenberg Ventures, and 500 Startups – to boost sales efforts.
“No company has a solution like this,” Stephen Davis, a partner at Banneker Partners, which lead the funding round, said in a written statement. “[Kevin and Steven Bong] saw a real problem experienced by their father and have solved it in a very unique way.”
AuditFile has just started raising Series A funding, which will also help ramp up sales and marketing efforts, according to Bong. There are plans to release an official AuditFile mobile app in the future, he added.
The company is also developing a new data transfer feature for AuditFile, which could involve the input of two California-based online accounting software heavyweights.
“We’re able to connect on a very deep level with Intuit QuickBooks Online and with Xero to really help with the data transfer for auditors; to be able to directly download and import the trial balance, or even the entire general ledger, and be able to do testing on that data,” Bong concluded. “This is something that our customers are really excited about.”