Applying professional judgement in modern audit

Organisations that operate in the natural resources and energy sector are no strangers to complexity. Commodity price swings, capital-intensive operations, global supply chains, and ongoing regulatory change have always shaped the sector. What has shifted in recent years is how closely operational decisions, enabling technologies, financial outcomes, and external reporting are now connected, and how quickly organisations are expected to respond when conditions shift.

Management and boards are being asked to make decisions faster, often across multiple jurisdictions and disciplines, while maintaining confidence in the assumptions underpinning reported results. At the same time, regulators continue to place strong emphasis on governance, transparency, accountability, and the quality of judgement applied in financial reporting. Against this backdrop, expectations of auditors and the role of audit and assurance are evolving. While its primary purpose remains forming an independent opinion, a modern audit approach can provide insights, within the scope of the auditor’s role and responsibilities, that boards and management may consider as part of their governance, risk oversight and decision-making processes throughout the year.

Moving beyond a point in time view

Audit has traditionally been cyclical and retrospective, focused on forming an opinion at a single point in time. That foundation remains essential, but advances in data analytics and technology now allow audit teams to build a much richer picture of how risks develop and change throughout the year, or over multi-year periods, rather than only at reporting deadlines. This matters because risk rarely emerges neatly or in a static form. Operational disruptions, cost pressures, production variability, changes in reserve assumptions, technology dependencies, or evolving regulatory expectations often surface progressively and from outside the sphere of control. Technologies such as advanced data analytics, automated exception testing, and the use of structured data sets enable auditors to analyse trends across the full reporting period, rather than relying on retrospective snapshots or the traditional statistical sample-based validation.

Looking across full populations of data rather than relying heavily on samples also helps highlight inconsistencies between operating locations, geographical regions, or systems. For example, more sophisticated analysis of transaction flows across multiple operations, or the review of system-generated control data, can provide earlier visibility into emerging issues. This supports stronger fact-based risk assessment, a more focused audit response, and more meaningful conversations with management and audit committees, which in turn reduce the likelihood of last-minute issues and give organisations more time to respond when conditions change.

This approach is underpinned by an understanding of the IT general controls and automated application controls that support the integrity of source data. Where those controls are designed and operating effectively, they provide a foundation for more reliable data analytics and more targeted audit procedures.

Data provides insight. Human judgement provides meaning

Advances in technology have significantly expanded what auditors can analyse, including financial transactions, operational metrics and nonfinancial data generated by increasingly digital and technology-enabled business models. However, it has not changed what ultimately underpins audit quality. Data can show what is happening, but professional judgement is still required to understand why it is happening and whether it matters.

The outcomes of data analytics can also highlight new or emerging risks that warrant further attention. Audit teams can use these outputs to design and perform targeted audit procedures in response to anomalies, unexpected trends or deviations identified through dashboards and analytical tools.

In asset-intensive industries, many of the most significant accounting judgements sit where data, assumptions and forward-looking estimates overlap. Asset values, impairment indicators, output and costing assumptions, rehabilitation provisions, climate-related assumptions and sustainability disclosures often rely on models, platforms, and data inputs that appear precise but are highly sensitive to judgement.

As data sets become larger and more sophisticated, the risk of misplaced reliance increases if professional scepticism is not consistently applied. Automated outputs, dashboards, or predictive indicators can introduce noise or false reassurance if not critically assessed. The role of the auditor is not simply to process information, but to challenge assumptions, test controls around data integrity, and bring sector experience to bear. Strong audits use technology to inform judgement, not to replace it.

Using technology to respond faster to risk

One of the clearest benefits of a more data-driven audit approach is earlier insight into emerging risk. When anomalies or control weaknesses are identified sooner, organisations have more opportunity to respond with strengthened controls, through their own governance and management processes, revised assumptions, or clearer governance responses before issues escalate.

In the natural resources and energy sector, delays in recognising issues can carry real commercial consequences. Cost overruns, production shortfalls, system dependencies, or reliance on non‑financial data can quickly flow through to financial outcomes if not addressed early. Increased use of integrated operating systems, remote data capture, and digital reporting also means that weaknesses in controls or data governance can have a broader and deeper impact if not identified promptly.

The challenge is not how much technology is used, but how deliberately it is applied to areas of highest risk and judgement. Technology does not remove risk, and it does not change the auditor’s responsibility to exercise professional judgement. It does, however, support earlier identification of issues, more informed decision-making and better-designed audit responses. For boards and audit committees, this earlier insight enables sharper questioning, more informed oversight, and fewer reactive responses late in the reporting process.

Working differently in a global, connected sector

Natural resources and energy organisations operate and increasingly support, activities across borders, time zones and regulatory regimes, yet accountability remains firmly local with boards, management and regulators. Audit needs to reflect that reality.

Modern audit delivery models increasingly draw on shared data environments, remote access to systems and collaboration across specialist teams in accounting, sustainability, systems, and sector knowledge. These technologies support consistency and efficiency across locations, while allowing audit teams to access expertise where it is most relevant.

At the same time, global operating models introduce their own risks. Inconsistent application of judgement, fragmented data ownership and uneven data quality across systems and locations can undermine audit quality if not well coordinated. Technology enables connectivity, but it does not replace the need for clear leadership, sound decision-making, and trusted working relationships across the audit team.

People remain essential

Despite rapid advances in technology, audit remains a people business. Judgement, scepticism and experience cannot be automated.

The sector continues to face skills constraints, while expectations around productivity, efficiency and insights continue to rise. Technology can help automate routine tasks and surface risk more quickly. The quality of these outcomes, however, still depends on skilled professionals who understand both the data and the business context behind it.

For audit firms, this means investing in capability, team depth, and succession planning to ensure quality is sustained over time. A resilient audit model cannot rely on any one individual. It must be built around teams that can adapt as organisations, risks, and regulatory expectations continue to evolve, leveraging the capabilities of available technology as a complementary tool to support the need for data-driven insight and efficient and effective delivery models.

Looking ahead

Audit in the natural resources and energy sector is changing. It is becoming more continuous, more data-informed and more closely aligned with how organisations operate today, while retaining the independence, rigour and professional judgement that underpin trust.

Technology makes deeper insight possible. People make it meaningful.

In a sector shaped by complexity and ongoing change, the real value of audit lies not just in validating outcomes, but in helping boards and management understand the drivers behind reported outcomes to support their decision-making.

Our natural resources and energy team works with organisations across the sector to understand how the audit process is evolving and what a data-informed audit approach can look like in practice.