PwC uses drone to assist audit in global first

07 January 2019 4 min. read

Big Four firm PwC has piloted the use of a drone for an audit of a client in the energy sector, in a global first for the firm. The unmanned airborne vehicle reduced the amount of time it would take for energy giant RWE to take stock of its coal reserves by more than three hours.

Drones – unmanned aerial vehicles operated by a user on the ground – exist in a legal grey area. Used by the British military overseas and for security purposes at home, more rudimentary drones can also be bought online and used by hobbyists – a growing cause of concern for privacy advocates, as well as airport security. A drone sighting recently brought Gatwick Airport to a standstill at Christmas, while earlier in December, reports emerged that another unmanned vehicle reportedly came within 15 metres of a plane at Stansted Airport.

Autonomous drones are presently illegal and strict air traffic control regulation demands that all drones be flown within their operators’ line of sight, but by 2030 the skies above Britain will likely be a different place. Big Four professional services firm PwC estimates that, rather than today’s chaotic swarm of private toys, there will be a highly coordinated hive of more than 76,000 sophisticated drones performing all manner of tasks. The accounting and consulting firm’s UK drones report confidently predicts that Britain’s new drone economy will employ more than half a million people and eventually be worth £42 billion to GDP.

PwC uses drone to assist audit in global first

In order to tap into the growing potential of this future fleet, last year, PwC’s UK wing established a team of drone specialists in Britain to help clients take advantage of the airborne technology. The professional services firm has a growing network of drone-focused facilities, including a global centre of excellence focusing on the commercial use of drone technology on the continent, as the group bid to help clients extract value from drone data. Now, the firm has trialled the use of a drone in auditing for the first time in the UK.

As PwC looked to assist with a stock count audit for German energy firm RWE at one of the UK’s last remaining coal-fired power stations, the use of the drone allowed the professionals to measure the volume of its coal reserves and work out its value. The trial was done to look at new ways of challenging the traditional method of stock counting, and is part of a wider drive to use emerging technologies to enhance audit quality. 

Richard French, Audit Partner at PwC, remarked, “Coal stock has a material value on RWE’s balance sheet, so we carry out an annual stock observation and evaluation as part of our audit process… While the traditional method remains reliable and will still be used for RWE’s formal year-end financial statements, the drone trial was conducted to explore ways of challenging the traditional method of stock counting. It was a classic example of new technology challenging the old - and based on our results, the potential is groundbreaking.”

In a global first for the network, PwC UK found that the traditional method of manually traversing the coal pile would take around four hours, whereas using a drone reduced that to just half an hour. The drone, manufactured and operated by UK company QuestUAV, captured more than 300 images of the coal reserve in Wales. The images from the drone were used to create a point cloud ‘digital twin’ of the coal pile in order to measure its volume. The value of the coal was then calculated to within 99+% accuracy based on that volume measurement.

Commenting on PwC’s drive for innovation, Hemione Hudson, Head of Assurance at PwC, said, “Technology is an enabler for positive change and this drone-assisted stock count is an illustration of how we are using technology to enhance audit quality and efficiency. Drones are just one of a number of technologies that could improve audit quality in different ways across different sectors. But maximising the benefits of emerging technologies is reliant on having the right people with the skills to interpret the resulting data. We are constantly investing in attracting the best people… to ensure our audit quality continues to improve.”

Elaine Whyte, UK drones leader at PwC, added, “Sectors with large assets in hard to reach areas are the most obvious starting points for expanding this kind of work further - from mining to agriculture and forestry… In this case, drones have allowed us to trial a more efficient service which has the potential to save both money and time, while allowing us to deliver greater insight too. There is also a clear health and safety benefit to using drones for this type of work, without someone having to climb over the coal pile.”