December 11, 2025

What Are Automated Controls For Audits?

Deirdre Dolan

Sr. Director of Product Marketing

Increasing trust with AI for audit and advisory firms.

Automated controls allow audit and advisory firms to test complete transaction populations instead of samples, monitor controls continuously instead of periodically, and redirect practitioner time from repetitive verification to complex risk areas requiring professional judgment. These capabilities address the testing capacity constraint that prevents firms from handling additional engagements without proportional headcount increases.

Automated controls are IT-dependent application controls that operate within information systems to process transactions consistently without manual intervention. They ensure transactions are properly initiated, authorized, recorded, processed, and reported, executing these functions without human error risk while generating comprehensive audit trails that support population-level analysis.

This shift represents a competitive advantage as auditing standards evolve. SAS 145 now emphasizes understanding an entity's IT environment and the IT general controls that support automated controls, while regulatory bodies confirm that technology-based automation enhances audit quality. Firms adapting their methodologies early gain capacity to handle more engagements while maintaining professional standards.

What are the benefits of automated controls for audits?

The business case for automated controls extends beyond simple efficiency gains to fundamental improvements in audit capacity and competitive positioning. The PCAOB confirms that technology-based automation enhances audit quality, stating that auditing standards are not precluding firms' ability to use technology-based tools in ways that could enhance audit quality.

Automated controls deliver measurable advantages across several dimensions:

Operational efficiency: Streamline high-volume, repetitive processes that traditionally consume significant practitioner time
Audit quality: Enable more comprehensive testing and better-informed risk assessments through population-level analysis
Capacity expansion: Free practitioners to focus on complex risk areas requiring professional judgment and expertise
Remote testing: Increase coverage of controls and transactions without physical presence requirements
Consistency: Reduce execution variability by standardizing procedures across engagements

These improvements translate directly to competitive advantage. Practitioners gain capacity to handle more engagements while maintaining professional standards, addressing the talent shortage challenge facing most firms.

How do automated controls work for audits?

Automated controls fundamentally change the audit approach by shifting focus from testing individual transactions to validating system-level reliability. Auditing automated controls centers on three critical elements.

Control logic accuracy verifies the system applies correct business rules and control parameters to all relevant transactions.
System reliability confirms the control operates consistently without gaps or failures throughout the audit period.
Output validity assesses how the system processes exceptions and generates accurate, complete results.

Automated controls function through continuous monitoring to validate effectiveness. This approach requires different skills compared to traditional manual control testing. Practitioners evaluate the control mechanism itself rather than repeatedly testing its execution across individual transactions.

What are the types of automated controls?

Understanding control types helps you design appropriate testing strategies and assess where automated approaches deliver the most value. Automated controls fall into four primary categories:

Application controls: These are fully automated transaction processing controls embedded within business applications, including automated three-way matching in accounts payable systems. PCAOB AS 2201 requires practitioners to evaluate whether these controls sufficiently address identified risks of material misstatement.
General IT controls: These are foundational controls that support the continued, effective functioning of automated controls. They enable other information-processing controls to operate effectively through access management, change control, and system monitoring.
IT-dependent manual controls: These are hybrid controls where manual review processes depend on IT-generated information, such as management review of system-generated accounts receivable aging reports. They require testing both the automated information generation and the manual review process.
Preventive versus detective controls: This is a functional classification cutting across other categories. Preventive automated controls include edit checks preventing invalid general ledger codes, while detective automated controls include automated bank reconciliation variance reports.

Recognizing these distinctions helps you allocate testing resources appropriately and understand the dependencies between control layers. Application controls rely on general IT controls, while IT-dependent manual controls require validating both automated and human components.

What are the applications of automated controls for audits?

Audit and advisory firms gaining capacity without adding headcount have moved beyond theory to practical implementation. They test entire populations instead of samples, monitor controls continuously rather than periodically, and free practitioners to focus on complex judgment areas where expertise delivers the most value.

The following applications show how these competitive advantages materialize in day-to-day practice:

Control testing automation

Control testing automation changes internal control evaluation approaches. Instead of manually selecting a sample of 25 purchase orders to test three-way matching controls, automation tests all purchase orders processed during the period and identifies any that failed the control. This population-level testing provides complete control effectiveness visibility rather than inference from sample results.

AICPA-CIMA guidance guidance confirms this approach extends beyond ICFR audits across the entire audit environment, providing methodology for testing automated controls and using those results based on acceptable failure rates.

Automated control testing workflows

Modern audit platforms enable practitioners to test controls more comprehensively during engagement periods by processing complete transaction populations rather than relying solely on manual sampling. Instead of manually testing 25 transactions at year-end, practitioners can configure AI agents to analyze entire populations within defined parameters, identifying all control failures for assessor review.

This approach provides complete visibility into control effectiveness during the audit period rather than inference from limited samples.

Intelligent process automation (IPA)

Firms move beyond automating individual tasks to orchestrating entire workflows from start to finish. Rather than using separate tools for different steps, IPA coordinates complex, multistage processes where outputs from one automated step trigger the next.

Research across the profession shows CPA firms implementing IPA solutions that automate financial close procedures, tax-compliance workflows, and audit engagements in their entirety. This frees practitioner time for higher-value work including analysis, strategic recommendations, and client advisory services.

Software audit tools

Software audit tools are applications practitioners use to perform audit procedures, ranging from data analytics platforms to automated testing software. Both PCAOB and AICPA frameworks govern these tools, requiring firms to implement controls over the audit applications themselves. This creates a meta-control requirement where the tools used to test controls must themselves be controlled through access restrictions, change management, and validation procedures that confirm accurate processing.

Hybrid audit programs

Modern audit programs combine automated steps, manual linkages, and auditor judgment to improve evidence quality and strengthen the audit process. Automated controls might test all revenue transactions for proper authorization, flag exceptions, and route them to practitioners for manual investigation. This hybrid approach leverages automation for comprehensive coverage while preserving professional judgment for unusual or complex situations requiring contextual analysis.

Quality control enhancement

Automated controls improve quality control by standardizing procedures and reducing execution variability across engagements. When testing procedures execute automatically with consistent parameters, firms eliminate the variance that occurs when different practitioners apply manual procedures with varying thoroughness. This standardization creates predictable quality levels and reduces the risk of errors or omissions that manual processes introduce through fatigue, time pressure, or interpretation differences.

These applications demonstrate how automated controls extend beyond individual transactions to reshape entire audit methodologies, creating opportunities for firms to scale capacity while maintaining quality standards.

Manual controls vs. automated controls

Understanding when to rely on manual versus automated controls requires evaluating several operational dimensions. Each approach delivers distinct advantages depending on the nature of the process and the business requirements.

Dimension	Manual Controls	Automated Controls
Speed	Slower execution	Rapid, consistent execution
Consistency	Variable (human error risk)	Superior consistency
Scalability	Limited by resources	Population testing capability
Judgment	Excellent for complex scenarios	Limited flexibility

Research from JIS indicates that Big 4 firms foresee that human auditors are susceptible to replacement, at least in part, by automation using artificial intelligence. However, the most effective audit strategies combine both approaches strategically.

A hybrid approach proves most effective:

Use automated controls for: High-volume, repetitive, rules-based processes requiring consistency; standard calculations and validations; data integrity checks across large populations
Use manual controls for: Judgment-intensive reviews requiring contextual interpretation; low-volume unique transactions; situations requiring flexibility and professional skepticism; complex risk assessments

The goal isn't complete automation but rather optimal allocation of human expertise to areas where judgment adds the most value.

How Fieldguide supports automated control testing

Fieldguide's AI-powered platform assists practitioners with automated control testing through Field Agents that execute multi-step testing workflows within practitioner-defined parameters.

Once assessors map evidence to test samples and configure testing parameters, Field Agents can:

Process complete transaction populations for control testing rather than manual sampling
Extract and validate data from evidence documents
Match evidence to test samples (invoice matching, fixed asset verification, accounts receivable testing)
Document findings with full proof of work and flag discrepancies for assessor review

Since all Field Agent outputs require assessor review and approval, assessors maintain oversight of sampling methodology, requirement mapping, and final determinations. This Therefore, the AI assists with execution within those defined boundaries.

Building your automated controls strategy

The shift toward automated controls represents an opportunity to enhance audit quality while improving efficiency and scalability. With SAS 145 now in effect and regulatory bodies actively encouraging technology adoption, understanding automated controls is essential for maintaining competitive positioning and meeting professional standards.

Start by assessing your current clients' automated control environments and evaluating where your methodology needs adaptation. Consider whether your team has sufficient IT audit expertise or needs external specialist support. Fieldguide's engagement automation platform helps audit and advisory firms build automated control testing strategies that scale capacity while maintaining professional-grade quality.