- Entrepreneurial accountants are creating drones as an audit service.
- Drones may save money for accounting clients who can use them for stocktakes, mapping, safety monitoring and to inspect bridges and buildings.
- The global market for drone applications is forecast at US$100 billion by 2020.
Rio Tinto uses them to monitor mine sites, Australia Post wants them to safely and accurately deliver mail, and they may soon play a role in fast food delivery for pizza giant Domino’s. Drones are on the verge of totally transforming the business landscape – and accountants, particularly auditors, need to pay attention.
Dronification, the process of using Unmanned Aerial Vehicles (UAVs), to capture big data and respond to complex environments is becoming part of day-to-day operations across a number of sectors.
Cost savings generated by the technology are opening up opportunities for drone use ranging from environmental surveys which count Koalas to civil engineering projects such as large-scale construction projects like bridges and roadways.
Up close: Drones zoom in on the detail
Drones are already capable of mapping at ground level down to 1.5cm and over territory measuring more than 2sq km - in a single 59 minute flight over 120m.
For accountants, there is the opportunity to use the technology to dramatically speed up some business processes, while automating others. Drones are used now on construction projects from the initial site survey through to building completion. Site surveys which would have taken two or three weeks for humans can be completed in a matter of hours using a drone armed with image capture software.
As a result, demand for the technology is booming; some futurists predict that by 2030 more that one billion drones will be aloft in our skies.
Goldman Sacs and PWC predict a global market of drone applications valued at more than US$100 billion by 2020. The world’s major supplier of drones, DJI, currently exceeds a market capitalisation of US$10 billion.
Drones in business
Within the accounting profession, drone technology is already delivering significant productivity gains in inventory, safety and environmental audit.
A stocktake of a whitegoods storehouse which would normally take two people five hours can be completed by a drone pilot and warehouse manager within half an hour.
Drones are also providing highly accurate site and safety audits, offering the ability to identify corrosion and material degradation in inhospitabable and hard to reach places.
Today in 2017, an audit of an oil rig uses on-board sensors to integrate thermal imagery with potential gas leak measurements and takes a matter of days instead of weeks, compared with previous industrial inspection activities.
In a similar vein, drones are being used in the agricultural and land management sector, where they offer the ability to capture data from large and remote areas. As a result, farmers are able to spot weed contamination or nutrient deficiencies from the air, while firefighters can use the technology to track the progress of bushfires on multiple fronts.
Help clients assess the impact of drones on their own business operations
As auditors and accountants, we’re being asked to imagine a world where drones can both replace the need for an auditor to be physically present, and offer the ability to capture large data sets faster and more accurately than ever before.
In fact, an entire audit business is possible using drones as an audit service (DaaAS).
Accountants who are entrepreneurial may be attracted to the challenge of going beyond inventory counting and auditing to cover structural assessments and statutory risk audits. Establishing a drone business requires an ability to not only acquire imagery but process images for photogrammetry - measurement purposes.
Software processing takes place in the cloud and readily available applications are Airmap, DroneDeploy, Kittyhawk, Pix4D and Skycatch, making data capture a reality from drones, identifying objects in video and generatingthe generation of highly accurate 3-D models for individuals.
However, there are already governance requirements which apply to all businesses which make use of drones. In both Australia and New Zealand civil aviabion authorities allow drones to enter airspace, and drones weighing less than 2kg do not require aviation licensing, unless their being used for commercial, or income-generating purposes.
Drones are a major source of big data and are changing not only the world of accounting and audit, but enhancing business advisory services through new work practices, radically different economies of scale and near real-time service delivery.
Key implications of drone technology for your accounting practice include:
- Consider drone technology in the context of not only your business, but your client use cases. For example, the cost of drones is moving in some instances to be a versatile security CCTV camera, physically securing a perimeter at a special event.
- Drone technology data can help compliment service offerings to make data-driven decisions.
- Ensure the source of any drone data is used in accordance with Australian Privacy Principles. This avoids potential conflicts, as seen in a 2015 New Zealand privacy case featuring the Sky TV drone, which filmed a cricket match but flew close to a private apartment. Most importantly, data collected for audit purposes may not be used for any other purpose without the consent of customers.
- Recognise “there’s no time like the present” as your customers have ready access to the technology and can start solving problems without your involvement.
- Take precautions against threats of hacking, malicious software and compromising data. Hence, when operating expensive commercial drones review insurance above and beyond public liability.
- Help clients assess the impact of drones on their own business operations. Point them towards the drone strategy being adopted by Queensland to entice overseas players with drone-friendly investments.
- Assure drone data as a value add to the operations of a client business. Drones help to generate audit evidence through noting any exceptions or outliers in a time series analysis of inventory video which reflects misplaced or stolen inventory. Alternatively, a drone mounted with a Radio Frequency Identification (RFID) reader captures data directly from tagged inventory and helps perform predictive audits through comparing an existing catalogue of inventory and recognising the complex patterns in data to understand when the next inventory item will move.
Related: Big data accounting - the predictive accountant
The rise of a new accounting paradigm – big data accounting.
This article is part of a regular Working In Business column for CAs working in finance departments within the accounting profession. As part of this column, Acuity is running a series by Suresh Sood specifically looking at the rise of big data accounting and what it holds for the future of the accounting profession. This article was first published in the June/July 2017 issue of Acuity magazine.