As financial institutions increasingly digitise transactions and reporting processes, attention is shifting to the internal controls needed to ensure that faster financial operations also produce reliable and traceable financial information.

Digital platforms can process payments, move funds and generate reports at increasing speed, but the reliability of financial statements still depends on how transactions are recorded, reconciled and reviewed, as well as how errors and unusual transactions are investigated.

The challenge is particularly important where operational systems and accounting records do not align. Differences between customer platforms, settlement processes and accounting ledgers can result from timing differences, omitted entries, duplicated transactions or adjustments recorded in only one system.

Without proper investigation, such discrepancies can remain unresolved and affect subsequent financial reports.

Reconciliation therefore remains an important control even as financial processes become more automated. Beyond comparing balances, significant differences require supporting evidence, clear responsibility for investigation and a process for resolving outstanding items.

Approval controls face similar requirements. Financial institutions need to establish not only that transactions have been reviewed, but also who conducted the review, the information considered and whether the reviewer had the appropriate authority.

Technology is also changing how auditors identify reporting risks. Digital audit methods can be used to analyse transactions and select entries for further examination based on factors such as posting dates, account combinations and other transaction characteristics.

However, identifying an unusual transaction is only the beginning of the audit process. Auditors must still establish its business purpose, examine supporting documents and determine whether the accounting treatment is appropriate.

The experience of Nigerian chartered accountant Ayoola Sikiru Olamilekan provides examples of how some of these controls operate in practice.

While serving as a central pay and accounting officer at the Lagos State Ministry of Commerce, Industry and Cooperatives, Sikiru implemented a reconciliation and tracking system for vendor and subvention payments. According to his CV, the system reduced unresolved payment queries by more than half and also reduced audit follow-up issues.

His subsequent work at Crowe involved examining accounting records and operating practices, assessing compliance with internal control procedures and analysing data for control deficiencies, duplicated processes and possible misstatements. His professional record also includes participation in the forensic audit of the Niger Delta Development Commission.

At Deloitte, where he progressed to senior associate and team lead in the financial services practice, his responsibilities included evaluating control design and operating effectiveness, conducting walkthroughs, assessing reporting risks and supporting the remediation of identified deficiencies.

His work also included risk-based journal entry testing, involving the development of selection criteria, analysis of high-risk postings and investigation of anomalies.

Such processes demonstrate the continuing relationship between technology and professional judgement in financial reporting. Digital tools can help narrow large volumes of transactions to those requiring closer attention, but conclusions still depend on supporting documentation, investigation and review.

The growing use of technology is also creating a need for professionals who can connect analytical tools with accounting evidence and regulatory requirements. Sikiru’s professional record states that he trained more than 40 audit professionals in technology-enabled methods, integrating digital workflows with financial processes and audit procedures.

As institutions introduce new systems, data sources and analytical tools into their operations, effective financial reporting will continue to depend on whether transactions can be traced, discrepancies explained and controls shown to work.

The increasing sophistication of financial technology, therefore, does not remove the need for traditional reporting safeguards. Instead, it places greater emphasis on ensuring that the controls supporting financial information keep pace with the technology used to produce it.